YOU Issue: Charlottesville leads in income inequality

As the city’s largest employer, the University of Virginia has an outsized impact on the income gap. Photo by Patrick Neil As the city’s largest employer, the University of Virginia has an outsized impact on the income gap. Photo by Patrick Neil

Here’s what readers asked for:

I would like to see a series of articles addressing the economic gap in our town and area.—Mo Nichols

By Jonathan Hanes

Income inequality has reached massive levels over the past few decades, as wages for poor and middle-class Americans have stagnated while those for top earners have skyrocketed. And the Charlottesville area is a leader in this unfortunate trend.

Income inequality is measured using a Gini index, with a score of zero being the least unequal and a score of one being the most. Charlottesville has a Gini index of .512, higher than both the Virginia index of .471 and the national index of .415.

This is partially due to Charlottesville’s economic dependence on the University of Virginia, the city’s largest employer. According to Hamilton Lombard, an economist at the Weldon Cooper Center, diversified economies tend to have less inequality. “Towns with coal fields have higher income inequality because there aren’t a lot of other jobs,” he says. “Similarly, small college towns tend to be prone to inequality because of the large pay range [at universities].” He points to the salaries of highly trained lecturers compared to those of service workers.

UVA has come under fire for how it pays low-level workers, though their current minimum, $12.38 an hour, is slightly above the living wage for one person working full-time, which is $12.02 an hour in Charlottesville, according to the Massachusetts Institute for Technology’s living wage calculator. (And it’s well above the state minimum wage of $7.25 an hour.) For a single parent with one child working full-time, however, the living wage baseline jumps to $27.09 an hour, or over $56,000 annually.

UVA recently garnered more criticism from living-wage activists when it posted a job listing for a “community resource specialist” that would help UVA employees “at or near entry-level hourly rates locate community resources such as housing, clothing, utilities, and food.”

Activists expressed frustration on the Living Wage Campaign at UVA’s Facebook page: “The administration knows workers are struggling and it seems they will do everything except pay workers a living wage. Disgraceful.”

Tech startups, which have taken off in Charlottesville in the last few years, can also contribute to the income gap. In a town where the median income is $31,850, a software engineer here averages around $87,000, according to Glassdoor. The spy center—National Ground Intelligence Center—inflates salaries too.

But the income gap here may not only be the result of highly unequal salaries: College students, who don’t tend to have a lot of income, can skew the data. “Small-town colleges tend to distort income levels in the surrounding community,” says Lombard. And he adds that Charlottesville, like most cities, tends to attract more poor and homeless people than rural and suburban areas because it offers more social services, such as public housing and homeless shelters.

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