Greenwich and Bridgeport: How Connecticut's Wealth Gap Was Built

A Twenty-Mile Wealth Gap (0:00)

Hey, chibis! I'm Aiwee, and today we're talking about the twenty mile stretch where Connecticut's wealth gap lives. If you enjoy stories like this, hit the like button and subscribe if you haven't already — let's go! There is a stretch of road in southwest Connecticut, about twenty miles long, where the top one percent of earners take home around six point three million dollars a year and the rest of the population takes home about one hundred and one thousand. That ratio, roughly sixty two to one, sits inside a single metropolitan area in a state that, by most rankings, looks extraordinarily prosperous.

Connecticut ranks among the top five states in the country for millionaire households per capita. It also ranks second, behind only New York, on a common measure of income inequality. The contradiction doesn't show up in a single number. It shows up on a map. So how does one of the richest states in America also become one of the most unequal?

The answer involves two long economic histories running in opposite directions, plus a third story about how the state is governed. To see how they fit together, start more than a hundred and fifty years ago, in a Hartford that no longer exists. By the eighteen seventies, Hartford was reported to be the wealthiest city in the United States on a per capita basis. Insurance companies like Aetna and The Hartford were headquartered there. So was Colt's firearms factory, along with the banks and railroads that fed them.

Danbury made hats. Waterbury produced most of the country's brass. Bridgeport, eventually nicknamed the arsenal of democracy, was home to Remington Arms. The wealth of that era was built on wages, lots of them, paid to workers who could afford to live near the factories. What followed was a slow, multi-decade erosion.

Manufacturers moved production south and west, then overseas, chasing lower costs. New competition arrived. Automation meant fewer workers could produce more. Remington offers a useful example: the company began relocating its ammunition manufacturing out of Bridgeport, opening a new plant in Arkansas around nineteen seventy, with the rest of its Bridgeport operations shutting down in the late nineteen eighties. The same pattern played out across the state's manufacturing towns.

As the jobs thinned, middle-class families, disproportionately white, moved to the surrounding suburbs. Housing discrimination accelerated that move. Redlining denied mortgages in certain neighborhoods. Rules written into property deeds prevented non-white families from purchasing houses across large parts of the suburbs. People with choices moved out.

People without choices, and the cities they lived in, were left with a smaller tax base and a larger share of public need. The wealth didn't vanish from Connecticut. It moved outward, to the towns surrounding the old industrial cores. You can see the inversion in home prices. In nineteen ten, the average home in Hartford was worth roughly five thousand dollars, more than four times the average home in a nearby farming town like Avon.

Roughly a century later, the relationship had flipped. Avon's average home was selling for about three times the price of Hartford's. By the year two thousand, Hartford's poverty rate ranked among the very highest of any mid-size American city, while the surrounding Hartford metro area, which included the suburbs where those families had settled, ranked among the wealthiest in the nation. As the old industrial cities were losing their populations, an entirely separate story was unfolding elsewhere in the state. For more than a hundred years, Fairfield County, sitting in Connecticut's southwest corner, had served as a getaway for affluent New Yorkers.

The Rockefeller family built estates in Greenwich as far back as the late eighteen hundreds. Then in the nineteen nineties, hedge funds started concentrating in Greenwich and Stamford, and the momentum grew following the September eleventh attacks, when several Wall Street companies chose to set up shop in Fairfield County instead of reconstructing in Lower Manhattan. The commute to Midtown is roughly forty five minutes. The tax story goes back further. Before nineteen ninety one, Connecticut did not tax wages or salaries, helping lure corporate headquarters out of Manhattan during the nineteen sixties, seventies, and eighties.

Investment income, though, was taxed at some of the highest rates in the country. In nineteen ninety one, the state introduced a wage tax while cutting the tax on investment income to about four and a half percent. That lines up with the way hedge fund managers actually get paid. Connecticut's top marginal rate of about six point nine nine percent remains well below New York's ten point nine percent. By the middle of the twenty-tens, only New York held more total hedge fund assets than Connecticut did.

At its peak, Bridgewater Associates, then the world's largest hedge fund, managed roughly one hundred and fifty billion dollars from offices in Westport, a town of about twenty seven thousand people. An enormous pool of capital, paying enormous sums to a small number of people, settled into a small town next to a state still adjusting to the loss of its factory base. Put both stories together and the inequality takes shape. Connecticut's Gini coefficient, a scale from zero to one where higher means more unequal, sits at roughly zero point five zero. The United States as a whole is around zero point four two.

Most developed countries fall between zero point two five and zero point four zero.

Hartford's Nineteenth-Century Peak (6:15)

The top one percent of Connecticut earners take home about twenty eight percent of all income in the state, and the average member of that group earns roughly thirty seven times what everyone else earns. The Bridgeport Stamford metro, the same twenty mile corridor this story opened with, captures the gap most starkly. A separate number gets closer to how the gap feels. The official federal poverty line for a family of four is about thirty three thousand dollars a year, a figure set decades ago. By the United Way's estimate, a family of four in Connecticut needs roughly one hundred and sixteen thousand dollars a year just to cover the basics.

By that threshold, around four in ten Connecticut households fall short. So even though the state's official poverty rate looks low, a much larger share of families are stretched by what it actually costs to live there. Race maps closely onto this geography. The median white household in Connecticut earns roughly forty three thousand dollars a year more than the median Black or Latino household. More than half of the state's non-white residents live in just ten of its one hundred and sixty nine towns.

Nearly thirty towns are over ninety percent white. Black and Latino residents have roughly a fifty percent chance of living in a small set of under resourced areas that together make up only about two percent of the state's land. For white residents, the comparable chance is closer to one in eleven. What makes all of this durable is local government structure. Connecticut abolished county government in nineteen sixty.

Almost everything local, including zoning, policing, and schools, is run by one hundred and sixty nine towns. About sixty percent of local revenue comes from property taxes, roughly double the national average. That creates a self-reinforcing loop. Wealthy towns have expensive homes and a large tax base that pays for strong schools. Those schools attract more wealthy residents, lifting property values further.

Poorer cities get the inverse. Smaller tax base, weaker schools, higher demand for services. The mechanism that locks the loop in place is zoning. Roughly ninety one percent of Connecticut's residential land is zoned exclusively for single family homes. About two percent allows buildings with four or more units without a public hearing.

Some towns have made this restrictive in very specific ways. In Monroe, depending on how you do the math, the local zoning rules taken together can demand up to seventy acres for some kinds of multi-family housing, while a single-family house requires only one acre. More than thirty-six Connecticut towns have gone over twenty years without approving a single privately developed duplex or apartment. The state has tried, with limited reach, to push back. In nineteen eighty nine, Connecticut passed an affordable housing law, often referred to as eight thirty g, that allows developers to bypass local zoning in towns that do not meet a ten percent affordable housing threshold.

More than three decades later, only twenty eight of the state's one hundred and sixty nine towns have reached that target. A lever exists. It has only moved a small share of towns. Because public schools get most of their funding from local property taxes, where a child lives plays an unusually big part in how much is spent on their education. Bridgeport spends about eighteen thousand nine hundred dollars per pupil, and more than ninety percent of its students are classified as high need.

Greenwich spends about twenty seven thousand eight hundred dollars per pupil, with a far smaller share in that category. The results are visible. Nearly eighty percent of third graders in Greenwich meet the state's reading standard. In Bridgeport, the figure is about one in six. The two districts sit about twenty miles apart, separated by the same kind of geographic accident that defines the rest of the state.

Underneath the school story sits a second kind of fragility. As of two thousand twenty, about one point one percent of Connecticut's tax filers, fewer than twenty thousand people, paid roughly forty percent of the state's entire income tax bill. That is a remarkably narrow base, and some of those people are mobile. Eddie Lampert moved himself and his fund to Florida in two thousand twelve. Paul Tudor Jones became a Florida resident in two thousand sixteen.

General Electric moved its headquarters out of Connecticut in two thousand sixteen. Finance and insurance employment in the state fell from about one hundred and twenty thousand in two thousand eight to roughly ninety five thousand more recently. So what does this kind of inequality look like, day to day? Mostly, it looks unremarkable. No riots, no mass displacement.

But the rules that produce it are written at the level of one hundred and sixty nine towns, with most of the housing restricted to single family homes. The rich towns stay rich and the poor towns stay poor, without anyone needing to build a wall. Connecticut isn't unstable in any dramatic sense. But it is fragile, and it is stuck. A small number of mobile filers can swing a state budget, and a child's reading score is largely decided by the zip code they happen to be born into.

Remington Leaves Bridgeport (12:30)

If this kind of structural look at how places become unequal is useful, the channel has more puzzles like it. There is a link on screen now to a video that asks whether inequality is actually getting worse, and how we'd even know. Thanks for watching, and I'll see you in the next one.