As we’ve been reporting here at State of Disparity, Connecticut continues to have one of the widest gaps in the country between its wealthy and poor residents.
This past weekend, an art show by students and graduates of Stamford’s public schools explored the question “what is inequality?”
Craig LeMoult spoke with some of the artists.
New U.S. Census data out Thursday says Connecticut continues to be among the most unequal places in the country – behind just Washington, D.C. and New York.
Inequality is measured on a scale called the Gini Index. In the scale, a score of 0 would indicate a community is perfectly equal, meaning there’s a completely proportional distribution of income. A one one the Gini Index would mean a community is totally unequal – so one house would have all the income and everyone else would have nothing.
According to the new American Community Survey data, the level of inequality in Connecticut may have slightly increased, with the Gini Index going from .492 in 2012 to .499 in 2013. But the increase is within the margin of error, so it’s not statistically significant. This data map from the Connecticut State Data Center compares levels of inequality around the country, and the chart at the bottom compares them to inequality around the world.
A map of inequality rates from 2012 is online here.
The new data show the percentage of people living in poverty in Connecticut remained steady from 2012 through last year, mirroring national statistics. 10.7 percent of Connecticut residents are living in poverty.
Nationally, 48.8 million people, about 16 percent, lived in poverty last year. A family of four is considered to be living in poverty if it brings in less than $23,830 in a year. For an individual, the number is less than $11,890.
In Connecticut, the median household income edged down slightly in 2013, to about $67,000 from $68,000 the year before. That’s still significantly higher than the national median amount – which was about $52,000 last year.
Connecticut’s rising income disparity is causing the state’s revenue from taxes to grow more slowly and to become more volatile. That’s according to a report from the credit rating agency Standard & Poor’s.
“Connecticut has the unenviable position shared by only three other states in the nation where it is in the top 10 of the most unequal in terms of income distribution, and in the top 10 most volatile in terms of revenue performance,” said Gabe Petek, a credit analyst with S&P.
Petek says those two things are related. Because of Connecticut’s increasing reliance on tax revenues from people at the top of the economic spectrum, the state budget winds up fluctuating with the markets.
Standard & Poor’s is looking into this issue out of an interest in states’ abilities to pay their debts. Since 2003, the S&P bond rating of Connecticut has remained at double-A, indicating a very strong capacity to meet financial commitments.
“If the state budget makers agree on a budget and then revenue comes in 5 or 10 percent below what they assumed when they set the budget, they have a real crisis on their hands, and we saw that during the great recession,” said Petek.
In addition to increasing volatility, Connecticut has seen the growth of its tax revenue slowing down. It hit a high of 10.8 percent in the 1980s and since 2009 has gone down to 7.3 percent.
Petek says New York is among the states with the greatest inequality, but it doesn’t have as much tax volatility as Connecticut.
He says that’s because New York has a broader income base with a higher share of revenue coming from wages and salaries, compared to Connecticut, which relies more heavily on capital gains taxes. S&P boosted New York’s bond rating to double-A plus in July – slightly higher than Connecticut and the highest the state has been rated since 1972.
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Hacker also spoke with WSHU about economic disparity in Connecticut. He said wealth from Connecticut’s finance industry explains much of the inequality in the state.
The following slides are courtesy of Jacob Hacker and Yale ISPS. Click for a closer look.
For the last eight years, Connecticut has ranked last in the nation when it comes to number of schools offering breakfast to students. In the last national report in 2012, less than half of students who received free and reduced lunches in Connecticut ate breakfast at school. There’s a clear economic divide between the schools where breakfast is offered and where it isn’t. The state’s larger, lower-income cities generally offer it, and many of the smaller, wealthier communities do not. Here’s Craig LeMoult’s story about school breakfasts in Connecticut:
This interactive map by the Connecticut State Data Center illustrates the number of school breakfasts served in each school district, compared to the number of students receiving free or reduced-price school breakfast. Towns with more “free & reduced” kids and fewer breakfasts are red.
The Connecticut Department of Education released new statistics on Wednesday showing an improvement in the percentage of students who graduate in four years, and a slight reduction in the gap based on the economic background of students.
In 2013, 68.6 percent of students who are eligible for a free lunch (the standard way of assessing poverty in schools) graduated in four years. In 2012, that percentage was slightly lower, at about 66 percent. For those who get a reduced-price lunch in 2013, 84.2 percent graduated in four years. Compare that to the percentage for kids whose families make enough money that they don’t qualify for any lunch assistance: 93.3%.
Last year’s numbers were released in August, and were featured here in State of Disparity.
Here’s an interactive map by the Connecticut State Data Center, illustrating graduation rates in each Connecticut school district.
Since 2010, the graduation gap between economically disadvantaged students and their more affluent peers reduced by 4.5 percentage points (17.5 percent).
The DOE has set aside the 30 lowest performing school districts in a designation called “Alliance Districts” that are getting additional funding. Those districts saw a 1.3 percent increase over 2012. Of those, the 10 lowest performing saw a 2.8 percentage-point increase — from 66.3 percent in 2012 to 69.1 percent in 2013.
Of course, if a student doesn’t graduate in four years, it doesn’t necessarily mean they won’t graduate at all (as we saw in this story). So the DOE also released, for the first time, the percentage of students who graduate in five years.
Looking at all students who entered Grade 9 in September 2008 (so they ordinarily would have graduated in 2012) the five-year graduate rate is 87.5 percent – 2.7 percentage points higher than the cohort’s four-year rate. For kids who are
eligible for free or reduced-price lunch, adding that extra year brings up the graduation rate 5.3 percentage points.
This graph from the Conn. Department of Education shows a continuing significant gap in graduation rates between students who qualify for free or reduced-price lunch, and those that don’t. Although the state points out the gap decreased from a 25.7 percentage-point difference in 2010 to a 21.2 percentage-point difference in 2013 for a total reduction of 4.5 points.
There are persistent racial gaps in grad rates, too. In 2013, about 91 percent of white students graduated in four years, while about 76 percent of black students and 70 percent of Hispanic students graduated in the same time.
Listen to Ebong Udoma’s story here:
Listen to Craig LeMoult’s story here:
In his new book, “The Divide: American Injustice in the Age of the Wealth Gap,” journalist Matt Taibbi looks at the disparity in how the U.S. justice system treats wealthy people and poor people.
“It’s incredibly easy for people who don’t have money to go to jail for just about anything,” Taibbi told NPR’s Kelly McEvers in April.
“There’s almost an inverse relationship between the ease with which you can put a poor person in jail for, say, welfare fraud, and the difficulty that prosecutors face when they try to put someone from a too-big-to-fail bank in jail for a more serious kind of fraud.”
Here’s Taibbi’s interview with NPR’s Kelly McEvers.
Taibbi uses the example of HSBC, which admitted to washing over $850 million for a pair of Central and South American drug cartels. The bank paid a fine, and no one served a day in jail. He compares that to people who go to jail for having a joint in their pocket.
“I think there’s this weird psychological thing that we’re developing where we just sort of look at one kind of offender and we think that person is appropriate for jail, and another kind of offender we just don’t think that person is appropriate for jail, increasingly,” Taibbi told McEvers.
You can read an excerpt of the book here.
Taibbi was interviewed on the Daily Show in April. Here’s the first part of that interview.
Here’s the second part of Matt Taibbi’s interview on the Daily Show
“What we did today was we tried to create a mapping tool, where we would have a system where the clients and the counselors could sit together, enter the address and get information about neighborhood assets,” said Boggs.
Those neighborhood assets include things like schools and grocery stores, and the tool also has community information like unemployment rates and crime statistics. Boggs says that kind of information can help families move to communities where they can be more successful. She says currently, nearly 80 percent of Section 8 vouchers are disproportionately used in high poverty areas.
For now, the tool focuses on the Hartford area. An award of $1,000 in Tuesday’s contest will help them extend it to cover the entire state.