Growing wealth gap in U.S. cities hurting economic mobility: study

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By Susan Heavey

WASHINGTON (Reuters) - U.S. cities are increasingly divided between the rich and the poor, hampering residents' ability to move up the economic ladder, according to a study released on Wednesday.

Not only is a widening geographic gulf between the haves and have-nots hurting economic mobility, it signals potentially dimmer prospects for some urban areas in a nation where cities have long been seen as beacons for jobs and opportunity, the study said.

Researchers at New York University and University of California, Berkeley analyzed 96 metropolitan areas across the United States to see how a lack of economic integration within cities affects people's economic fortunes.

The study, commissioned by the nonprofit group The Pew Charitable Trusts, found American cities overall are now less economically mixed than in earlier decades, with increasingly deeper pockets of rich residents isolated from poor ones.

"There are more neighborhoods where poverty is more concentrated and wealth is more concentrated," said Patrick Sharkey, a sociology professor at New York University who helped lead the study.

That isolation makes it hard for the poor to improve their circumstances, the study found. For example, a low-income family in a more divided city typically sees four generations pass before reaching half the nation's mean income. In more mixed areas, it takes just three, it said.

Such economic segregation is increasing across the United States as the country continues to find stronger financial footing after the deep 2007-2009 recession.

Earlier on Wednesday, President Barack Obama returned to the issue with a speech on income inequality and economic mobility, calling for a renewed focus on actions that benefit the struggling poor and middle classes.

Wednesday's study adds to the growing body of evidence highlighting the nation's uneven economic recovery and growing class divisions.

Previous studies from Pew have shown that it is easier to move up the economic ladder in some parts of the United States, namely in the Northeast and parts of the Mid-Atlantic. Those in other states, mostly in the South, are less likely to improve their economic prospects.

Its latest findings show an impact at a more local level.

Among the cities studied, New York showed the deepest divide, followed by Newark, New Jersey; Washington, and Los Angeles. Cities with less division included Tacoma, Washington; Tampa and Orlando in Florida; Pittsburgh, and Boston.

Sharkey said the implications for Americans, especially the poor, go well beyond they kind of housing people have and "affects everything about the community," from school funding and politics to infrastructure investments and crime rates.

"We should really be thinking about economic mobility at a more local level," he said.

It also raises questions about the power of American cities.

"It's a trend that makes us think that cities will become less of an engine for economic mobility if they keep trending toward a scenario where the rich live in separate communities from the poor."

(Reporting by Susan Heavey; Editing by Steve Orlofsky)

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