More Data Points in the Income Inequality Debate

On the New Geography blog, Joel Kotkin has published an interesting list ranking the 50 largest U.S. metropolitan regions by the percentage of income derived from interest, dividends and rent. Inhabitants of metros that rank at the top of this list earn a higher percentage of their income from their investments than from salaries, wages and income transfers.

Much to my surprise, Virginia metros tend to rank high on the list.

Frankly, I’m really not sure what this data means. I present it to you, dear reader, because it illuminates an aspect of Virginia’s political economy that usually goes unremarked upon.

A higher percentage implies greater wealth — after all, interest, dividends and rents are income generated from stocks, bonds and real estate. As Kotkin points out, older Americans tend to have accumulated more wealth than young people, so areas with large numbers of retirees tend to rank high. That may explain Florida and Arizona, but I don’t think it pertains to Virginia metros.

A high percentage also could signify lower wages, which would appear not to be the case in Virginia, with its top-quintile income rankings, or it could reflect less reliance upon transfer payments, which is a possibility, given the relatively low level of poverty here.


Share this article


(comments below)


(comments below)


One response to “More Data Points in the Income Inequality Debate”

  1. of course if you took the interest/dividends rate and correlated it with income disparity .. would the correlation explain it?

Leave a Reply