If you want to promote economic equality, it might make sense to go to the place in America where economic inequality is lowest, right? With that in mind, Newsweek sent reporter Leah McGrath Goodman out to Ogden, Utah, to write a cover story. The cover line: “As Wealth Inequality Soars, One City Shows the Way.”
It’s an interesting story, but it doesn’t really give you much of a remedy for reducing economic inequality. There’s lots of material about how the city’s director of community and economic development has been getting property owners to spruce up old buildings and neighborhoods. There’s a description of Ogden’s newly “vibrant” downtown. That’s the sort of thing that’s happening in small cities and towns across the nation, actually, as anyone who gets around the country knows.
The writer makes much of Ogden’s STEM programs — admirable, perhaps, but scarcely unique and argues it “has moved past the economists’ discussion about how to redistribute existing wealth to focus on attracting new wealth by cultivating businesses that offer higher labor income to its residents.” And “higher labor income, plus a lower cost of living, leads to a greater savings rate and wealth accumulation.” From this one might very well draw the conclusion that economic growth is generated by low taxes and the absence of land use regulations that result in enormous increases in housing prices — i.e., the policies that have induced many people to leave California for states like Utah. That’s a vivid contrast with much of the bulk of the cover story, which consists of economists bemoaning economic inequality and describing as yet unadopted proposals intended to reduce it.
Two other irritating things. One is a misuse of language, which suggests a leftist orientation. Goodman writes about how “the richest 20 percent of Ogden’s households hold around 40 percent of the city’s income.” Hold? Income isn’t held; it’s earned. “The city’s income”? The city government doesn’t have income, except what it raises from taxes and sales of bonds; people who live in the city earn income. Goodman writes wistfully about proposals for “a more loophole-free, ‘progressive’ tax system where the wealthy are uniformly asked to pay more and the working class less.” Asked? People aren’t asked to pay taxes; they are required to pay them, and if they don’t they may be sent to prison. And there is no indication that, as a recent Brookings Institution study found, even a sharp increase in tax rates on high earners would reduce inequality by only an “exceedingly modest” amount.
The other irritating thing is that Goodman seems to be sadly lacking in knowledge of American demographics. There is no mention, for example, that Ogden (and its metropolitan area encompassing Weber and Davis Counties) is one of the most heavily Mormon places in America. As blogger Steve Sailer, who spotted this article, points out, Utah with its heavily Mormon population has a demographic profile much like that of 1950s America: high rates of marriage and childbearing, a relatively young population, a high degree of churchgoing — and a church which supplies counseling and welfare services to members. This is not a profile many other American cities can be expected to match.
Other metro areas with low economic inequality are in various ways idiosyncratic, including Provo, Utah, (separated from Ogden by the slightly more unequal and much larger Salt Lake City). Only two have large non-white populations (Honolulu and Vallejo, Calif.) and none has many blacks; several have large military bases (Honolulu, Anchorage and Killeen, Texas); none is among the 30 or so metro areas with more than 1 million people, where about half of all Americans live. In contast, the metro areas listed as having the most economically inequality include huge metropolises with large immigrant populations (New York, Miami and Los Angeles).
And Goodman has a bad feel for the top two most unequal metro areas — leading the list by a considerable margin — Goodman has a poor feel. She characterizes Bridgeport, Conn., (which consists of all of Fairfield County) as “American hedge fund country for the crush of millionaires and billionaires settled in their environs, many of whom work in nearby Greenwich.” Actually, Greenwich is part of the metro area and the number of commuters from regional towns is limited: the hedge fund industry, unlike fast food, is not labor-intensive. The reason for the inequality is that Greenwich is a super-rich town and Bridgeport is a poor city with many Hispanic immigrants. “Second place for the widest gap,” writes Goodman, “was Naples, Florida, which included the upscale Immokalee-Marco Island.” Well, Marco Island has lots of rich people and so does Naples itself; this was once America’s smallest metro area with a Neiman Marcus. But Immokalee is not much more than a labor camp for low-income farm workers: the very opposite of luxury. Leah McGrath Goodman has done some interesting reporting, but she needs to get around a little more.
