Bloomington’s inequality ranks among highest in nation

As more people hear the message of the Occupy movements each day, institutions, politicians and journalists have begun examining poverty and income inequality specifically in the Monroe County area.

Statistics from the American Census Bureau show Bloomington is the third-poorest city of its size in the United States.

But critics of these statistics say students, which account for about half of Bloomington’s population, greatly skew the data.

Below, the IDS looks into the significance of both poverty and poverty data in Bloomington.

A poverty problem in an education city

According to reports by the U.S. Census Bureau, 39.9 percent of Bloomington residents are in poverty. The New York Times listed Bloomington as the third-poorest city of its size.

Other reports say rates for income inequality in the area are equally dismal.
According to propublica.org, 99 percent of populous counties have more income equality than Monroe County. This calculation is based off the Gini index, a measurement that rates income inequality on a scale of 0 to 1.

Kristin Seefeldt, assistant professor in the School of Public and Environmental Affairs, said these numbers should be taken with a grain of salt because it is hard to calculate statistics that deal with a city as small as Bloomington.

“But that in no way means that they aren’t useful,” Seefeldt said. “Imperfect numbers about small communities are a problem, but poverty is a bigger problem.”

Seefeldt said there are many facets of Bloomington’s higher-than-average poverty levels.

“Manufacturing jobs have disappeared and agriculture is no longer a big industry,” she said. “That leaves us with IU being the major employer, and there is only a finite number of jobs available here.”

Seefeldt also said for someone without a college degree, access to a University job is much harder to attain.

“There are limited economic options for those born and raised here,” she said.
In a way, Seefeldt said, Bloomington is a microcosm of inequality of opportunity. Higher education is frequently considered the answer to poverty. Yet in a city so greatly influenced by education, many residents will never have the opportunity to attain college degrees.

“This is a great institution,” Seefeldt said. “But it is situated in a community facing highly significant challenges.”

A poverty problem exaggerated

Critics of the U.S. Census Bureau’s data say Bloomington’s poverty rates have been greatly skewed by the student population that lives off campus.

Any student making less than the poverty line for a single person ($10,830 per year) would be in poverty. Considering that many students, supported by their parents, are unemployed or work minimum wage jobs, their income is far below this mark.

“According to the Census Bureau measure, almost four out of every five persons from the ages of 18 to 24 is living in poverty,” said Matt Kinghorn, economic analyst for the Indiana Business Research Center. “From just looking around, we can tell that’s not the case.”

Poverty rates for mostly non-student subgroups of Bloomington’s population, such as families or residents older than 35, are still higher than the national average of 15.1 percent but not by as much as when students are included in the equation.

Yet Bloomington is still ranked highest of all college towns in income inequality.
Few other college towns comparable to Bloomington demographically have a level of income inequality or poverty rate as high as Bloomington’s.

Kinghorn said Bloomington is a fairly urban city, which tends to increase the rate of poverty. But other factors also come into play.

“You start looking into where municipal boundary lines are drawn and what percentage of students live off campus,” Kinghorn said. “It’s clear about Bloomington that it is a very small town with a large number of students who live off campus.”

Kinghorn said while the data is misleading, for many, poverty still remains. 

“Any way you look at it, poverty is an issue in Bloomington,” Kinghorn said. “It just probably isn’t as dramatic as it shows.”