Have blue states and big cities done anything to reduce income inequality

In states or cities with a one sided political spectrum that endorses the left, is anything done to address the issue of income inequality?

I know that the minimum wage is higher in some blue states and blue cities. Are there other ways they reduce income inequality?

My understanding is places like LA and NYC have very high income inequality. But that is likely because rich people like living there.

So my question is do blue states or blue cities do anything productive to reduce income inequality? I know a higher minimum wage is one thing, do they do anything else?

Are progressive taxes more pronounced? Are unions stronger? Are social safety net programs stronger?

Yes to all three of your last questions.

Cities are also more likely to do things like fund universal pre-K, one of the most effective policies for reducing inequality.

Well, there’s the obvious fact that blue states and big cities are generally wealthier and pay more in federal taxes than they get back from the federal government, which transfers wealth from them to the red “welfare” states.

That’s what you meant, right?

No, what I mean is that left leaning states like NY, CT, CA, etc. have higher gini coefficients than average. Large cities like NYC & LA also have large gini coefficients.

I assume a lot of this is just the fact that rich people like to live in these states and cities, but what do these areas actually do to reduce income inequality?

Some ways to help the lower class don’t directly affect income: rent control, subsidized mass transit, parks & recreation, …

One issue that comes up here is a variation on the tragedy of the commons - depending on how hypothetical anti-poverty programs would be structured, you could get the reverse of the phenomenon mentioned: poor people would like to live in those cities.

If one city instituted a dramatically more generous-to-the-poor system, the likely outcome would be that poor would move there from across the nation in sufficient numbers to bankrupt that city. One city simply can’t solve the entire nation’s poverty problems on its own. (Already we see municipalities giving away one-way bus tickets, or one-way plane tickets out of Puerto Rico…)

If anti-poverty programs are instituted uniformly across the country, this sort of poverty mobility wouldn’t be incentivized.

Do you have a cite that places in the US with universal pre-K reduce income inequality?

Regards,
Shodan

This is the only one you mention specifically, but I wanted to ask about this. While I know the early results were super-promising and all, the data I know from the actual real-world reslts in practice don’t seem to show any reliable or consistent improvement.

Yup, earlier this year there was yet another study showing that Pre-K for poor children is a waste of money.

This report presents results of a randomized trial of a state prekindergarten program. Low-income children (N = 2990) applying to oversubscribed programs were randomly assigned to receive offers of admission or remain on a waiting list. Data from pre-k through 3rd grade were obtained from state education records; additional data were collected for a subset of children with parental consent (N = 1076). At the end of pre-k, pre-k participants in the consented subsample performed better than control children on a battery of achievement tests, with non-native English speakers and children scoring lowest at baseline showing the greatest gains. During the kindergarten year and thereafter, the control children caught up with the pre-k participants on those tests and generally surpassed them.

Emphasis mine. Kids who don’t get Pre-K end up doing better in school than those who do.

States or cities with a one sided political spectrum that endorses the left seem to do a lot of things that make the poor poorer and worse off.

As one example, anyone living near Chicago is familiar with the soda tax that drove up prices on sugary soft drinks quite a bit, until it was repealed. Now who drinks sugary soft drinks more, the poor or the rich? Obviously the poor do, yet taxes like this are being proposed in many liberal cities.

As more significant example is real estate. Liberal governments restrict the construction of real estate and put all kinds of expensive requirements on developers. This leads to less supply of housing, which leads to higher housing prices, which hurts the poor. Badly. It’s most clear in California, where housing prices are sky-high and as a result, the state has the nation’s highest homelessness and poverty rates, when adjusted for cost of living.

The L.A. Times recently asked, Why is liberal California the poverty capital of America? Good question.

I agree that this is completely shameful and that liberal areas are in greatest need of reform (since that’s where the most concentrated demand is), but I don’t think there’s any organized side in American politics that gets to crow about this.

I honestly think that an internal migration system like China has would get like massive support if it was proposed here. Sell it to the liberals as protecting disadvantaged communities from big bad developers, and to conservatives as protecting local values from big bad outsiders.

Those are valid complaints. Sin taxes, energy taxes and restrictions of building new homes increase the cost of living, especially for the poor. But virtually every large city is left leaning and they aren’t all having to deal with these issues. Many large cities in the midwest have low cost of living, reasonable energy costs, fewer sin taxes, etc.

It’s one thing to vote Democrat, but there’s a pretty huge difference between the politics of Democrats in St. Paul and Chicago, let alone San Francisco.

Most states have regressive methods of raising tax revenue, meaning they place a lighter burden on higher income groups, relative to the the middle class or lower income.

California, New Jersey and New York are in the top 10 list for having the most progressive tax structure.

Here’s the top 10 list

California
New Jersey
Vermont
Hawaii
District of Columbia
Minnesota
Iowa
West Virginia
New York
Rhode Island

There are other studies of state tax progressivity.

Re: preschool, I think this is a reasonable hypothesis:
Having subsidized preschool or childcare reduces poverty by allowing parents to work.

I’ve not seen any studies yet though.

Lets see…

In New York City, we have free Pre-K. And free 3-K ( for 3 year olds, the year before Pre-K ) and free lunch programs for children that are active even during summer months.
And the City University of New York is free for students whose families make less than 100K a year.

And there are kiosks everywhere with free phone service and WiFi. And limited web access. Which can be a life-saver for someone that is looking for work and can’t keep up with their phone bills.

And we have an extensive 24 hour mass transit system that make owning an automobile unnecessary for most people. And there are lots of programs to help people that can’t afford mass transit.

Welcome to West Virginia, the most economically progressive red state in the country. By God, if we ever found a way to get a rich guy to live here, we’d show him what for! When everyone’s broke, there is no income inequality.

Another huge one is rent stabilization. Over one million units where the city demands landlords charge below market rents (with all kinds of variations due to the complexity of the rules but that’s the basic result).

However, first you have define what ‘income inequality is’ and what qualifies as ‘reducing’ it. In many case income inequality is quoted before even outright govt transfer payments. That kind of measure by definition can’t be reduced via more transfer payments, not directly anyway.

And many other ‘social programs’, federal, state or local do not include outright transfer payments, like all the ones for NY we’ve mentioned (though NY also does have transfer payments at city level, the City partly pays landlords in cash for some people’s stabilized rents for example). Those would not show up directly even in ‘after transfer pmt’ measures of income inequality.

This is not a technical issue, it’s a huge issue even defining the extent of this problem. The implication is sometimes that govts in the US spend nothing on this, but they spend huge amounts, and particular global or foreign measuring entities sometimes ignore what state and local govts in the US spend. It’s not to say the level of spending is at some subjective ‘right’ level, but there’s a serious measurement issue in a lot of the typical debate about ‘US has high gini coeffieicent, what to do?’

And with more indirect measures there’s also a serious issue of evaluating their effectiveness. Take the hypothesis ‘free pre-K eventually reduces pre-transfer payment income inequality’. You can’t just take that on faith, because it’s possible that’s a relatively more or less efficient way to do it, assuming you spend a given amount. Sometimes people support things just because they sound ‘wholesome’. But you should be able to show that such programs actually accomplish this better than say taking the same $'s and cutting checks to the families of the kids who couldn’t afford to pay for their pre-K.

But back to NY, obviously the overwhelming reason it has more income inequality (which it obviously does at the extremes, gini itself is one mathematical measure which has it’s own internal problems) is that rich people want to live there. You can’t practically even it out with the rest of the US (let alone rich world) except by making those people leave.

Indeed. The reason that we had the soda tax in Cook County (not just the city of Chicago, but the county, as a whole, is also strongly Democratic), and overall a very high sales tax rate in Chicago, isn’t really because Chicago is liberal, or that there was some liberal agenda to put in another “sin tax” (though they tried to cover it with that fig leaf). It’s mostly because Chicago and Cook County (and, for that matter, the state of Illinois) have budgets and balance sheets that are a disaster, primarily due to pension programs for public employees that have been underfunded for decades – and that was largely due to politicians choosing to use funds that should have gone into the pension funds for other purposes.

As the massive pension obligations have finally come due (with large numbers of baby boomer employees retiring), the city, county, and state have been scrambling to figure out how to cover the huge shortfall.

And yet, solidly blue Washington state has no income tax at all. Not that that takes away from your point; I just find it odd.