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A new study of income inequality could be bad news for those expecting the GOP's tax cut to trickle down to the middle class. The report by the Brookings Institution found that some places saw shrinking gaps between the top and bottom of the income scale between 2014 and 2016 — but in other places, the gaps grew much larger.

Expand chart
Data: Brookings; Chart: Chris Canipe / Axios

Why this matters: This shows gains on one end of the income scale don't necessarily translate into gains at the other end, at least in the short term. It also suggests that different places have different economies, meaning one-size-fits-all national policy solutions aren't likely to be universally successful.

Expand chart
Data: Brookings; Chart: Chris Canipe / Axios

The back story: The report looks at income inequality levels for the 100 largest metropolitan areas in the U.S.

Key quote: "At least in the short run, city and metropolitan income trends do not suggest the existence of a rising tide lifting all boats, but rather separate ebbs and flows for households at different extremes of the distribution."

  • "Even if ... local innovation economies generate greater opportunities for workers in less-skilled industries, those opportunities may not materialize overnight, and low-income workers and families could get priced out of a city in the meantime."

Takeaways:

  • While more cities saw declines in income inequality from 2014-2016, more metropolitan areas saw increases in income equality over this time period.
  • Some of the biggest changes in income were among wealthy households in cities that are home to booming technology industries like San Francisco, Austin and Seattle.
  • Trends at the top of a place's income distribution "had little relationship" to trends at the bottom of the distribution.
  • Even if a place's income inequality ratio didn't change, the gap between different income groups' earnings could increase. For example, in San Francisco the ratio remained the same, but the gap between the 20th and 95th income percentile grew by $114,000.

Go deeper

Dion Rabouin, author of Markets
2 hours ago - Economy & Business

Investors increase their exuberance

Illustration: Eniola Odetunde/Axios

U.S. stocks jumped across the board on Monday and the S&P 500 had its best day since June 5, as the bulls stepped in and bought the dips in stock prices following last week's minor selloff.

Why it matters: While some have worried rising U.S. interest rates would dampen investor exuberance over the expected pickup in economic growth thanks to increasing vaccine numbers and big fiscal spending hopes, Monday showed investors still like risk assets. A lot.

4 hours ago - World

China and Russia vaccinate the world — for now

Illustration: Aïda Amer/Axios

While the U.S. and Europe focus on vaccinating their own populations, China and Russia are sending millions of COVID-19 vaccine doses to countries around the world.

Why it matters: China's double success in controlling its domestic outbreak and producing several viable vaccines has allowed it to focus on providing doses abroad — an effort that could help to save lives across several continents.

Ina Fried, author of Login
4 hours ago - Technology

China will dominate AI unless U.S. invests more, commission warns

Photo illustration: Axios Visuals. Photo: Krisztian Bocsi/Bloomberg via Getty Images

The U.S., which once had a dominant head start in artificial intelligence, now has just a few years' lead on China and risks being overtaken unless government steps in, according to a new report to Congress and the White House.

Why it matters: Former Google CEO Eric Schmidt, who chaired the committee that issued the report, tells Axios that the U.S. risks dire consequences if it fails to both invest in key technologies and fully integrate AI into the military.