Miami is a city of extremes: extreme heat, extreme food, extreme wealth.
But despite the city’s lavish high-rises and world-renowned restaurants, nearly 19% of Miamians live below the poverty level, according to U.S. Census data from 2022.
It’s these economic extremes that led to Miami’s ranking as the city with the fifth highest income inequality in the country, according to a report by GOBankingRates.
Six Florida cities appear on the top 50 list, but Miami was ranked the highest in the state.
GoBankingRates, a personal finance and consumer banking website, used U.S. Census data from 2022 to compile its list of the most economically unequal cities. The report ranked each city with a measurement used by economists to quantify inequalities in income. The list includes cities with a population of 100,000 or more.
“This isn’t new,” said Holly Bullard, the chief strategy and development officer at the Florida Policy Institute, a nonprofit organization focused on issues of economic mobility. In Florida “we’ve been ranked very poorly over time” in terms of income inequality, said Bullard, and the reasons behind the rankings are “multifaceted.”
So, what exactly is income inequality, and why are Florida cities experiencing so much of it?
Here’s what to know:
What is income inequality and how is it measured?
Income inequality refers to how evenly, or unevenly, income is distributed across people in a community. If most of a population’s income is consolidated among a small group, that population has higher income inequality.
Economists use a statistical measurement, called a Gini index, to represent income inequality.
In Miami, the bottom 20% of workers earn an average of $10,093 a year, according to the report. The top 20% of workers earn over 20 times that, almost $264,000 a year on average.
The top 5% of Miami residents receive an average of almost $525,000 a year, 50 times what the bottom 20% makes.
What Florida cities are in the top 50?
Here are the Florida cities ranked in the top 50 for income inequality:
▪ Miami (5)
▪ Tampa (8)
▪ Fort Lauderdale (15)
▪ Gainesville (22)
▪ Tallahassee (26)
▪ West Palm Beach (47)
Why are Florida cities in the top 50?
Several factors push Florida’s high income inequality, said Bullard, most notably the state’s tax system and how little Florida spends on its people.
Florida was found to have the most regressive tax system in the U.S., according to the Institute on Taxation and Economic Policy, a research center in Washington, D.C.
Due to Florida’s low corporate taxes and lack of personal income tax, “the lowest income Floridians actually pay the highest percentage of their income” in taxes, Bullard said. This makes it easier for wealthier Floridians to increase their income and more difficult for middle and working class Floridians to catch up, Bullard said.
Florida’s lenient tax system also leads the state to spend less money on essential services for low- and middle- income people, according to Bullard. Florida spends roughly $8,800 per person, according to the Urban Institute, a nonprofit focused on economic policy. This places Florida in the bottom five states in terms of government spending per-capita.
Bullard also cited barriers to workforce participation, like the high costs of healthcare and childcare, as factors in the state’s high levels of income inequality.
What city ranked highest for income inequality?
The city with the highest rate of income inequality is Atlanta, according to GOBankingRates.com.
Here are the U.S. rankings:
▪ 1. Atlanta, Georgia
▪ 2. Boulder, Colorado
▪ 3. New Orleans, Louisiana
▪ 4. Columbia, South Carolina
▪ 5. Miami, Florida
▪ 6. Baton Rouge, Louisiana
▪ 7. New York City
▪ 8. Tampa, Florida
▪ 9. Cincinnati, Ohio
▪ 10. Tuscaloosa, Alabama
▪ 11. Shreveport, Louisiana
▪ 12. College Station, Texas
▪ 13. Little Rock, Arkansas
▪ 14. Boston, Massachusetts
▪ 15. Fort Lauderdale, Florida
▪ 16. New Haven, Connecticut
▪ 17. Houston, Texas
▪ 18. Dallas, Texas
▪ 19. Peoria, Illinois
▪ 20. Berkeley, California
▪ 21. Chicago, Illinois
▪ 22. Gainesville, Florida
▪ 23. Los Angeles, California
▪ 24. Sandy Springs, Georgia
▪ 25. Ann Arbor, Michigan
▪ 26. Tallahassee, Florida
▪ 27. Memphis, Tennessee
▪ 28. Wilmington, North Carolina
▪ 29. Richmond, Virginia
▪ 30. Macon, Georgia
▪ 31. Birmingham, Alabama
▪ 32. Philadelphia, Pennsylvania
▪ 33. San Francisco, California
▪ 34. Washington, D.C.
▪ 35. Baltimore, Maryland
▪ 36. Cleveland, Ohio
▪ 37. Providence, Rhode Island
▪ 38. Pittsburgh, Pennsylvania
▪ 39. Lafayette, Lousiana
▪ 40. Tulsa, Oklahoma
▪ 41. Stamford, Connecticut
▪ 42. Pasadena, California
▪ 43. Scottsdale, Arizona
▪ 44. Oakland, California
▪ 45. Athens, Georgia
▪ 46. Hartford, Connecticut
▪ 47. West Palm Beach, Florida
▪ 48. Detroit, Michicgan
▪ 49. Jersey City, New Jersey
▪ 50. Waco, Texas
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