Berkeley Wealth Gap Not Caused by Students

By: Aaron Glantz

A number of readers contacted me over the weekend to criticize our story, "Bay Area's Biggest Wealth Gap Is in Berkeley."

These readers argued that the gap between rich and poor is widest in Berkeley primarily because the city is home to large numbers of students, who, in the words of one reader, are "only temporarily poor."

But the inequality, revealed in recently released data from the Census Bureau, is not linked to Berkeley's large student population, the figures show.

For one thing, in creating its measure of inequality, the Gini Index, the Census Bureau specifically excluded all group-housing "households," meaning that the income of every Cal student living in a dormitory, fraternity or student-owned cooperative house did not affect Berkeley's ranking.

For another — and this is what made me think that the story was worth writing — the census figures showed that Berkeley has a much bigger wealth gap than other, similarly sized college towns with large public universities.

The Gini Index, measures, on a scale from 0 to 1, the extent to which an area’s wealth is concentrated within a small percentage of the population. A jurisdiction where one household controls all the wealth would be given a score of 1 on the index — named for Corrado Gini, an Italian statistician — while an area where income distribution is perfectly even would be scored at zero.

Berkeley's score, 0.516, the highest in the Bay Area, was also higher than those of Davis (0.486), Santa Cruz (0.481), Ann Arbor (0.487) and Madison (0.460) — all of which scored closer to the national average of 0.469.

So rather than the large student population, Berkeley's income disparities likely have more to do with the causes I identified in the story, including the wealth gap between the Hills and the Flats and between the city's white and African-American residents, as well as the voiding of some of the city's more progressive policies by state and federal officails. In addition, in a positive take, Alan Berube, a senior fellow at the Brookings Institution, notes that Berkeley — unlike affluent suburbs on the other side of the Caldecott Tunnel — is generous enough to provide housing where poor people can afford to live.