Quantcast

Urban housing prices may be to blame for record income inequality

Published: Wednesday, Oct. 17 2012 3:41 p.m. MDT

While many blame Wall Street for America’s huge wealth rift, new research suggests that trends in housing prices are largely responsible.

Kristan Jacobsen, Deseret News

Enlarge photo»

The difference in America’s wealth is greater than during the Great Depression, but while many blame Wall Street for America’s huge wealth rift, new research suggests that trends in housing prices are largely responsible, according to Business Insider.

From 1940 to 1969, low-income workers moved to cities with more opportunities, improving their paycheck in the process, a trend that had been on the decline for the past 30 years, according to a Harvard Study by Peter Ganong and Daniel Shoag.

The professors attribute the drop to escalating house prices in urban areas ­— prices that block less wealthy workers from moving to the cities where they could pick up a bigger salary.

Utah’s population grew 24 percent from 2000 to 2010, while Massachusetts only grew 3 percent, despite a per capita income that was 55 percent higher in 2000, according to the study.

While companies are moving to the cities, people with less wealth may need to avoid moving and settle for lower wages in their current home, according to Business Insider.

EMAIL: sparker@desnews.com

TWITTER: @SeanRParker

Get The Deseret News Everywhere

Subscribe

Mobile

RSS