The University of Toronto's Richard Florida has an important two-part series in The Atlantic focusing on what is driving the growing income gap in American cities. In particular, he and colleague Charlotta Mellander look at what is driving the differences in income inequality, since it's not a one-size-fits-all phenomenon, even in the U.S.
Florida writes: "What lies behind the inequality of American cities? The conventional explanation blames the rise of the globalized, knowledge economy which has eliminated family-supporting factory jobs and cleaved the workforce into high-paying, high-skill and low-paying, low-skill jobs." But, he says, wage inequality only explains a very small part of income inequality.
Union density and race are the real explanatory factors. Florida writes that his findings "suggest that the full story of inequality across American cities goes beyond technology, globalization, skills and wages, and includes unions, race and poverty."
The full report is here.