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South Florida’s chasm between rich and poor among nation’s widest

Income inequality in Miami and the broader South Florida region is worse than most of the country’s other cities and urban areas, but the gap between rich and poor is showing signs of narrowing.

Both Miami and the Miami-Fort Lauderdale-West Palm Beach Metropolitan Area, a Census Bureau designation, rank No. 8 in income inequality nationwide, according to a new study by the Brookings Institution, a think tank in Washington.

Those findings come as no surprise to Horace Gray, CEO of the Belafonte TACOLCY community center in the heart of Liberty City.

“Rich folks are moving into Miami,” Gray told McClatchy on Friday. “People are coming from California, the West, Canada, Atlanta, New York. The city has groomed itself to be a tourism capital. This isn’t happening by accident. It’s happening by design.”

In Miami, the wealthiest 5 percent of people make 10.2 times more than the poorest 20 percent on average, according to the Brookings study, which is based on 2014 Census Bureau data. The gap is even wider in the larger South Florida region, where the richest sector earns 15 times more than the most impoverished.

The Miami-Fort Lauderdale-West Palm Beach region was one of 18 metropolitan areas, as defined by the Census Bureau, that has a larger disparity in wealth than the average national ratio of 9.3. The Census Bureau recognizes 381 metropolitan statistical areas in the United States.

A similar Brookings report last year, which ranked only cities, placed Miami at No. 4 nationwide in income disparity, with a 14.8 ratio of wealthy to poor residents.

$12,262 - $184,242 The average household income of the bottom 20 percent of Miami residents versus the top 5 percent.

Gray, however, said the apparent narrowing of the income-inequality gap was misleading. He said that low-income people are leaving the city faster than rich people are arriving because the poor are being forced out by mega-developments to serve newcomers.

The Brookings report said that disproportionately high rental housing prices in Miami were adding to the economic squeeze on low-income residents.

“Inequality (of income) is indeed high and rising in most places, with the Great Recession and subsequent lackluster recovery exacerbating already-significant gaps between rich and poor households,” the study’s authors, Alan Berube and Natalie Holmes, wrote.

In Miami, Gray cited the planned razing of Liberty Square, the large housing project affectionately called Pork n’ Beans by many residents, and efforts by superstar David Beckham to build a soccer stadium in Overtown, another low-income hub seven miles south of Liberty City, as examples of high-end real estate deals that were pushing poor people out of Miami.

“When you bring in that kind of development and that kind of income, you are going to displace folks,” Gray said. “Pretty soon there won’t be any more inner city in Miami.”

Rep. Frederica Wilson, a North Miami Democrat, said median household income in her 24th Congressional District is 30 percent lower than the national average. She said many of its residents were decimated by the Great Recession that began in late 2007 and have not recovered.

Miami-Fort Lauderdale-West Palm Beach is one of just 18 Census Bureau metropolitan areas that have bigger household income disparities between rich and poor than the national average.

“This country, including the City of Miami, faces a dire income-inequality problem that threatens to gut our middle class, create a permanent underclass, and dismantle the American dream of building economic wealth and financial stability,” Wilson said.

Two Florida towns beyond the Miami-Fort Lauderdale-West Palm Beach metro area ranked among the Top 10 cities nationwide in a related comparison by Brookings. That comparison looked at the biggest household-income decreases between 2007 and 2014.

In Lakeland, homes with the poorest 20 percent of all residents saw their annual income drop during the seven years an average $4,777 annually, adjusted for inflation. In Cape Coral, incomes for the same group dropped by $7,149. The annual income among the wealthiest 5 percent, by contrast, fell by $1,682 in Lakeland and rose by $11,961 in Cape Coral during the same period.

Citing Lakeland and Cape Coral by name, the Brookings report said that “the substantial ground low earners lost opened up even wider chasms between the rich and poor in those cities.”

New House Speaker Paul Ryan is trying to persuade the Republican Party to make a new push on alleviating poverty. His first major policy speech after being selected as speaker last month cited the nation’s 45 million people living below the official poverty level and spoke to “the millions of people stuck in neutral.” Last week, Ryan and Sen. Tim Scott, the only African-American Republican member of Congress, hosted a “poverty summit” in Columbia, capital of Scott’s home state of South Carolina.

Ryan and other Republicans say the War on Poverty launched a half century ago by President Lyndon B. Johnson has failed while creating a permanent “welfare state” with successive generations of poor people.

Democrats counter that Republicans’ decisions to slash federal spending for low-income Americans since gaining control of the House in January 2011 and claiming a Senate majority a year ago have driven millions more into poverty and made life harder for those already in poverty.

James Rosen: 202-383-0014; Twitter: @jamesmartinrose