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The poor more likely to live with the poor

August 1, 2012: 12:01 PM ET

More and more Americans are living in neighborhoods surrounded by people who earn about as much as them ... whether they are rich or poor.

Segregation by income is growing, according to a Pew Research Center analysis released Wednesday.

Some 28% of low-income households lived in low-income neighborhoods in 2010, up from 23% three decades earlier. And the number of upper-income households living in upper-income neighborhoods doubled to 18% over that period.

Pew looked an household income data across census tracts, as well as in the nation's largest metropolitan areas. It defined low-income households as earning less than $34,000 and high-income as more than $104,000.

The growing divide is related to the long-term rise in income inequality, Pew said. That has led to a reduction in the percentage of neighborhoods that are predominately middle class or mixed income.  76% of areas fit this description in 2010, down from 85% in 1980.

Low income households are most heavily clustered in the New York metro area, where 41% of the poorest live in low-income tracts.  Philadelphia, Houston and Dallas are not far behind. Atlanta, however, has the lowest share of low-income people residing in what are considered poor neighborhoods.

On the flip side, Houston and Dallas have the highest concentration of wealthy households. Nearly a quarter of upper-income families live in upper-income neighborhoods in those metro areas. Boston, meanwhile, has the smallest cluster of rich folks living together.

Related: Are you poor if you own a flat-screen TV?

The metro areas of the Southwest, such as San Antonio and Phoenix, have experienced a rapid increase of residential segregation by income in the past 30 years.

One reason for this may simply be because more people are moving to these areas. Low-wage immigrants have settled in these cities, as have higher skilled workers and well-off retirees.

Despite the growth in income segregation, this phenomenon is still less prevalent than racial isolation for some minorities. About 42% of blacks lived in census tracts that were majority black in 2010. But that is down from 58% in 1980. Racial isolation for Asians dropped to 12%, from 17%.

Only Hispanics posted an increase in racial isolation, likely fueled by rapid population expansion. Some 43.5% of Hispanics lived in majority Hispanic neighborhoods in 2010, up from 35% three decades ago.

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About This Author
Tami Luhby
Tami Luhby
Senior writer, CNNMoney

Tami Luhby is a senior writer at CNNMoney and covers income inequality, state fiscal problems, unemployment, housing policy and other economic issues. Luhby previously covered personal finance for Newsday and banking for Crain's New York Business.

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