Following the money
Income in well-to-do towns is rising fast, widening the gap with the middle class
Some affluent north-suburban neighborhoods grew significantly richer over the past few years, while many others fared less well.
A peek at personal incomes, broken down by ZIP codes, reveals that incomes in the wealthiest neighborhoods generally increased at a faster rate than in other neighborhoods or communities. That trend has broad implications for the quality of life from one municipality to the next, say economists, regional planners, and antipoverty specialists. As the gap widens between rich and poor, so, too, does the level of services a community can afford to provide its residents.
"Society is becoming more segregated by income," said Marc Draisen, executive director of the Metropolitan Area Planning Council, a regional planning agency. "That definitely plays itself out in the quality of the services you can afford at the local level, including schools."
With tax day looming, the Globe looked at the average income by filer in every ZIP code in the state. The data from 2001 through 2005, the most recent available, was obtained from the Internal Revenue Service, which provides aggregate information by ZIP code, such as the number of filers and their gross incomes.
The numbers show that the average income in 2005 was higher in communities north of Boston compared with the average state filer: $76,408, for the northern suburbs vs. $67,419 statewide.
Locally, the average income gain over the five years was 12.4 percent. Income grew faster than that rate in eight of the northern suburbs' 15 wealthiest communities. The eight, in descending order, were Wenham, Essex, Manchester-by-the-Sea, Swampscott, Marble head, Nahant, Ipswich, and Middleton.
The most eye-popping rate of increase - 75.6 percent - was for income in the 01965 ZIP code that is associated with post office boxes in the Prides Crossing section of Beverly. There, the average salary was $414,502. The information in this story is based on geographic ZIP codes, however, and not those associated with post office boxes, because the number of PO box filers is relatively small and a handful of unusually large incomes can skew the overall results.
On the other end of the spectrum, six of the eight communities with income growth of less than 5 percent also have incomes well below the regional average of $76,408. They are, in ascending order of income growth, Everett, Revere, Malden, Lynn (01902), Merrimac, and Haverhill (01835). With the exception of Merrimac, these communities are also among those with the highest numbers of home foreclosures, according to data from Banker & Tradesman.
"Many [of these] communities are reaching the break point in being able to pay for the services people want, the school systems, fire protection, all the other services," said Wayne Burton, chairman of the North Shore Chamber of Commerce and president of the North Shore Community College.
"You have this huge disparity in places like Wenham compared to places like Lynn," Burton said.
These growing disparities, coupled with differing community sensibilities about economic development, make it tough to forge regional solutions to stubborn problems, such as the lack of affordable housing, Burton said.
IRS data indicate that incomes in nearly half of the communities in the northern suburbs did not keep pace with inflation, rising less than 10 percent over the five years studied. And with two exceptions - Boxford and Newbury - the average income in all of these communities was less than the region's average.
"People have kind of stood still, if they are lucky, for those five years," said Dorothy Siden, chairwoman of the economics department at Salem State College.
Siden said the IRS information, along with other studies, helps illustrate the gap between the upper class and middle class that has been gradually widening for more than a decade.
"If people are relegated to salary, they are not as upwardly mobile as those who have money to put into something with a higher return," she said. "You could say income is skewed toward the wealthy."
State aid has helped keep economic disparities between communities from growing too wide, said Barry Bluestone, dean of Northeastern University's School of Social Science, Urban Affairs & Public Policy.
Proportionally, more state money has been pumped into poorer communities. But state aid has fallen off recently, leading to intense lobbying from local officials who are trying to stave off cuts in services and layoffs.
Cuts in state aid hurt poorer communities more because a greater percentage of their budgets depend on it, while wealthy communities get a higher percentage of their budgets from property taxes.
With state and federal aid drying up, many communities are increasingly reluctant to turn to tapped-out taxpayers to fill municipal gaps, and social-service agencies are seeing some blurring of the lines between wealthy communities and less affluent ones. Beth Hogan, executive director of North Shore Community Action Programs, an antipoverty agency that serves 25 cities and towns, said she is seeing more residents from wealthier communities seeking assistance.
"When you are looking at foreclosures, debt, and credit problems, that's middle income and lower-middle income," Hogan said. "How many people have used credit cards to buy groceries and pay heating bills. In every single way, where people's lives had been economically eased, they are being pushed into much more difficult economic realities."
Kay Lazar can be reached at klazar@globe.com.
