The 95/20 Ratio

From Wonkblog:

Do healthier cities experience greater income inequality? That’s one of the implications of a new Brookings Institution study released this week. Larger, more dynamic cities – think New York, San Francisco and DC – are more unequal than their smaller, less economically-diverse counterparts. As it turns out, a rising tide doesn’t necessarily lift all boats.
The authors arrive at this finding by examining the “95/20 ratio.” In their words,

this figure represents the income at which a household earns more than 95 percent of all other households, divided by the income at which a household earns more than only 20 percent of all other households. In other words, it represents the distance between a household that just cracks the top 5 percent by income, and one that just falls into the bottom 20 percent.

They find that Atlanta, San Francisco, Miami and Boston lead the pack when it comes to this measure of inequality. In Atlanta, households in the top 5% made nearly 19 times as much money as households in the bottom 20%. To put this figure in context, this is higher than the CEO-to-worker pay ratio at Microsoft and Berkshire Hathaway.....One striking finding? In each city the median wage is a lot closer to the bottom of the income distribution than it is to the top.

One sad part of the study is that Detroit and Cleveland each have a high 95/20 ratio, even though their highest-paid workers don't make a huge amount, because their poorest residents make so little.