This story is part of The Globe's Wealth Paradox series, a two-week examination into how the income divide is shaping Canada.
The thing that attracted Joanne Davis to Connecticut was a road. One autumn day, she took a drive up the state’s Merritt Parkway for the first time. The highway wound through a canopy of woods and sloped under ornamented bridges, passing through wealthy towns like Greenwich, New Canaan and Westport. She fell in love with the scenery and the fresh air and resolved to move.
Near the northern end of the highway sits Bridgeport, the gritty post-industrial city where Ms. Davis ended up. There her two children attend an elementary school that is ranked No. 502 out of 510 in the state based on test scores. Seven months ago, she lost her job, and the bank is about to foreclose on her apartment. She just started a new position as a paralegal, but it doesn’t include benefits and pays a third less than she was earning before.
“The gap is just really huge between the rich and the working class,” said Ms. Davis, 38, standing outside her children’s school. “I don’t even know if there’s a middle class any more. We’re just working to make ends meet.”
To travel the chasm between rich and poor in the United States takes about 30 minutes, or the drive between Greenwich and Bridgeport. By the numbers, this slice of coastal Connecticut is the most unequal urban area in the country, boasting a degree of income inequality that resembles Thailand or Bolivia.
The extremes can be disorienting. On a recent Sunday in Bridgeport, the pastor of a local Baptist church talked in an interview about his fears of a “permanent underclass” and his worries that some of the city’s children don’t have access to decent-quality produce, let alone decent education. Half an hour down the road, there was an open house underway in Greenwich. Modest in comparison to its much larger neighbours, the home was selling for $4.5-million (U.S.) and featured a climate-controlled indoor pool area. A nearby forest preserve was excellent for walking or horseback riding, the real estate agent told me.
A NEW GILDED AGE
The U.S. has always had income disparities, but over the last three decades the country has entered a new gilded age. In 2012, the top 10 per cent of earners took home half of the nation’s total income, the highest share since modern records began in 1917, according to research by economists Emmanuel Saez and Thomas Piketty. Since the 1980s, the income of the top 1 per cent of earners, adjusted for inflation, has nearly tripled.
For Canada – grappling with a more moderate but increasing wealth gap – the U.S. represents one vision of the future. According to a commonly used measure of income inequality, the U.S. is the most unequal major industrialized nation on Earth. Among a broader group of 34 developed countries, it is fourth, surpassed only by Turkey, Mexico and Chile. (Canada, by contrast, is 12th.)
The same dynamics that are driving the growth of income inequality in Canada are also at work in the U.S., only in more extreme form: the disappearance of manufacturing jobs in a more globalized world, the decline of labour unions, the increase in pay for executives and bankers, the mismatch between the skills employers need and the ones workers have.
Experts disagree about whether today’s income gap is a drag on U.S. economic growth, but there’s little question that it coincides with other undesirable trends – such as lower upward mobility between generations and neighbourhoods increasingly segregated by income.
More broadly, Michael Sandel, a Harvard philosophy professor, has drawn attention to what he calls the “skyboxification of American life,” a reference to the distinct, higher-priced boxes now common in sports stadiums. “People of influence and people of modest means lead increasingly separate lives,” he wrote last year. “It’s not good for democracy, nor is it a satisfying way to live.”
In Bridgeport and Greenwich, the status quo appears entrenched. The income gap saturating the area is a fact of life, as likely to inspire indifference as anguish. In conversations, there was little anger and even less sense that substantial change was likely any time soon.