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Study: As Louisville’s Economic Gap Shrinks, Racial Disparities Remain

A new analysis from a national nonprofit research organization finds Louisville has gained some ground over the past three decades when it comes to shrinking inequality between the richest and poorest city residents. But sizable gaps still remain between white residents and those of color.

The report, released Wednesday morning by the Urban Institute, ranks 274 of the country’s largest cities on economic health, economic inclusion and racial inclusion.

The study looks at four years: 1980, 1990, 2000 and 2013. In Louisville’s case, the city-county merger happened during that period. Because of that, the study tried to maintain consistency by looking mostly at data from inside the former Louisville city limits.

“So, when we’re looking at the concept of an inclusive recovery, we’re saying in the period of time when a city is improving its economic health, we’re asking the question are they also improving the conditions and the outcomes for people of color and lower income residents in that community,” said Urban Institute Vice President and Chief Innovation Officer Erika Poethig.

“And so we’re seeing how those changes are happening and whether their outcomes are improving at the same time other people that have more advantages are improving.”

The city improved 58 rankings on overall inclusion — from being ranked 252 in the nation in 1980 to 194 in 2013. When economic and racial inclusion are separated out, the city’s gains for economic inclusion are even more dramatic: from 230 in the nation in 1980 to 118 in 2013.

But when it comes to racial inclusion, the city’s progress has been relatively static.

The report breaks down the individual metrics that go into the rankings. Louisville became less segregated over the study period, and also made gains in shrinking the education gap between whites and people of color. Some of that is attributed to Jefferson County’s school assignment program — which integrated public schools here — while programs like 15,000 Degrees get a shout out, too.

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But in some aspects, racial inequality is starker now than it was in 1980. Take homeownership.

In 1980’s Louisville, there was a 15 percentage point difference between people of color and whites who owned their own homes. By 2013, that divide had widened to a 32 percentage point difference: a much larger divide than seen in the country as a whole.

“The gap is both growing and accelerating at a rate that is a cause of concern,” Poethig said. “The leadership in the city should be focusing on what’s driving that gap, but also thinking about strategies to ensure that access to capital is provided to people of color in the Metro area. Or if there are other issues that are impeding people’s ability who want to become homeowners to become homeowners, to really unpack what those barriers or challenges are.”

Overall, Poethig said Louisville is an example of a city that’s making gains in shrinking both income and racial gaps. And just in terms of overall economic health, the city rocketed from being ranked 252 in the nation in 1980 to 4th in the nation in 2013. That’s largely due to jumps in employment and a rising overall median income — though the study noted that was helped by the merger.

But economic health isn’t sustainable unless it includes people all over the city, Poethig said.

“Unless you’re also thinking about how that health is shared across different groups, the sustainability is going to be challenged,” she said. “And so, we’re hoping that people will look at this and say ‘what are the intentional actions we can take to ensure that as we grow and we recover from economic challenges, that we can make decisions that are to the benefit of as many people as possible?’”

To check out how Louisville compares among other cities in the country, click here.

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