Report: Austin most economically segregated major metro area in U.S.

Texas’ four largest cities all rank among most divided by income, education and occupation.


No large metro area in the country is more economically segregated than Austin, according to a new report that underscores growing concerns about the divides in Central Texas and the impact they could have on the region’s economic prosperity.

Previous research found high levels of income and education segregation in the Austin area, but a new study released Monday by the Martin Prosperity Institute found that the region also suffers from a distinct separation between workers in knowledge, service and working-class occupations.

The metro area’s elevated levels of income, education and occupational segregation combined make Austin the most economically segregated large metro and the third-most segregated among metros of all sizes, the study said.

“It is not just that the economic divide in America has grown wider,” the report said. “It’s that the rich and poor effectively occupy different worlds, even when they live in the same cities and metros.”

Denser and more populous metro areas tended to post higher rates of economic segregation, the authors said. Yet a series of studies by the Martin Prosperity Institute, an economic think tank based at the University of Toronto, suggest that a large creative class also tends to exacerbate those divides.

Other metro areas in Texas didn’t fare much better than Austin did: San Antonio ranked third, Houston fourth and Dallas seventh among the 10 most economically segregated large metros in the country, according to the report.

Among metro areas of all sizes, college towns tended to show greater levels of economic segregation. Tallahassee, Fla., home to Florida State University, ranked as the most economically segregated of all metro areas, regardless of size.

The results reinforced a growing body of research that has found high levels of income and educational segregation in Austin and other Texas metros – as well as the impact these separations could have on economic opportunity in these cities.

“These advantages are being compounded by where we live,” said Richard Florida, a director at the institute and co-author of the report.

Economic segregation has gained such an intense research focus in part because studies indicate that where someone lives or grows up can have significant influence on their life prospects. An impoverished neighborhood “almost reproduces disadvantage,” Florida said, while the benefits of an affluent neighborhood tend to compound the advantages of those born there.

A 2013 study by the Equality of Opportunity project found that metro areas with lower levels of racial and income segregation tend to see their young residents climb higher up the income ladder than less-integrated cities.

By one of that study’s key measures, Austin’s upward mobility rate trailed only three other Texas metro areas — Dallas, Killeen and Waco — and it lagged well behind the tech-savvy hubs in Silicon Valley, Seattle and Portland, Ore.

A separate study found that Austin posted the ninth-highest rate of income segregation among the country’s 100 largest metro areas — with divides between Austin’s low-income and affluent residents jumping during the 1990s, when the region’s tech economy and population boomed.

Yet this new study by the Martin Prosperity Institute found that Austin is now equally divided – and perhaps in some cases, even more divided – when viewed in terms of occupational class and educational attainment.

Residents in knowledge-based jobs, service-oriented jobs and working-class jobs — such as manufacturing — tend to live separately, the study found. Austin ranked among the 10 most-segregated metro areas by each of those three measures. Meanwhile, workers without a high school degree were more separated in Austin than in any other large metro area, according to the report.

Those divides have sparked a rising level of anxiety in low-income neighborhoods, Florida said. However, he said, because many of the most economically segregated metros have also posted some of the country’s most rapid economic growth rates in recent years, they have the resources to address the issues — if they choose to deploy them.

“The more I look at this, the more I’m coming to conclude that economic segregation and persistent poverty … are bigger problems than gentrification and housing affordability,” Florida said.

Inequality isn’t new to Austin or anywhere else, but questions of housing affordability in a booming city have made the issues more acute here, said economist Brian Kelsey, principal at Austin-based Civic Analytics.

“The gap hasn’t grown much wider in Austin in the last 15 years, as even the most highly educated have faced stagnant wages,” Kelsey said. “But the effect is cumulative in an environment of rising housing costs.”

Rising home prices and rents have created conditions where only well-educated and skilled workers can keep up, he said, especially in neighborhoods closest to the downtown core.

“While this isn’t unique to Austin, economic segregation is magnified here along race (and) ethnicity lines,” Kelsey said. “Our severe disparities in educational attainment according to race (and) ethnicity give our economic segregation in Austin a particularly pernicious quality.”



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