Closing Wealth Gap May Not Help Democrats Win Back House

Photographer: John Moore/Getty Images
A New York Food Bank. “There is too wide a gap between people who are doing really well and people who are still struggling,” Representative Debbie Wasserman Schultz, a Florida Democrat, said last week at a Christian Science Monitor breakfast in Washington.

Democrats trying to win back the U.S. House of Representatives this year have seized on the issue of income inequality to beat Republicans.

There’s just one problem: the districts where Democrats have the best shot to win Republican-held seats show some of the smallest gaps between rich and poor in the U.S., an indication of just how hard it will be for their message to take hold with voters.

Of the 100 congressional districts ranked as having the greatest gap between rich and poor, not one is held by a Republican whose seat is considered up for grabs this November, according to data compiled by Bloomberg.

Graphic: Income Inequality by U.S. Congressional District

“Democrats have a lot of problems when it comes to taking back the House, and making spurious arguments is one of them,” said Guy Harrison, a former director of the National Republican Congressional Committee, which works to elect Republicans to the House.

Among the 39 Republican seats viewed as most vulnerable by the Cook Political Report, a nonpartisan, Washington-based group, only one -- held by David Jolly of Florida -- even comes close. His district is ranked No. 105 for income inequality out of 435 congressional districts, Bloomberg data show.

Photographer: Drew Angerer/Getty Images

Among the districts with the widest income gaps, most are at least 95 percent urban. They include the Fort Lauderdale, Florida, district represented by Debbie Wasserman Schultz, a Democrat, and the California district represented by Democrat Henry Waxman that includes West Hollywood and Beverly Hills. Close

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Photographer: Drew Angerer/Getty Images

Among the districts with the widest income gaps, most are at least 95 percent urban. They include the Fort Lauderdale, Florida, district represented by Debbie Wasserman Schultz, a Democrat, and the California district represented by Democrat Henry Waxman that includes West Hollywood and Beverly Hills.

Widest Gap

The seat with the widest gap between rich and poor belongs to a Democrat, Jerry Nadler, whose district takes in Wall Street and parts of Brooklyn not yet reached by that borough’s redevelopment. In all, 32 of the 35 districts with the greatest income inequality are held by President Barack Obama’s party.

“I wish we could just roll everything back 10 or 20 years and start over,” said Amalia Battle, an 82-year-old grandmother living on $2,000 a month in Nadler’s district. “That would make things so much easier.”

Debating the Impact of Inequality

All is not lost for Democrats, who need to win 19 Republican-held seats without losing any of their own to take majority control of the U.S. House.

Annual median income is below $51,000, the national midpoint, in 20 districts represented by vulnerable Republicans. That’s an indication that voters may feel the pressure of stagnant wages and a sluggish job-market recovery.

Among those 20 districts, 14 have gender pay gaps wider than the typical district, according to data compiled by Bloomberg. Republicans have blocked measures that Democrats say would help end pay discrimination between men and women.

‘Still Struggling’

“There is too wide a gap between people who are doing really well and people who are still struggling,” Representative Debbie Wasserman Schultz, a Florida Democrat, said last week at a Christian Science Monitor breakfast in Washington. “Republicans are doing everything they can to make sure that the people who are struggling continue to struggle.”

The divide between rich and poor across the U.S. is the largest since before the Great Depression, and the recovery has done little to help. The top 1 percent of earners had 95 percent of the income gains since the recession ended in 2009, according to a study last September from Emmanuel Saez, an economics professor at the University of California at Berkeley.

The widening gap is also fueling anti-Wall Street sentiment, as 48 percent of Americans have little or no confidence in the financial industry, according to an NBC News/Wall Street Journal poll last year.

A commercial this year targeting U.S. Senate candidate Tom Cotton, a Republican running in Arkansas, paints him as being too close to “big banks and their friends.” The spot was aired by Washington-based Americans United for Change, whose president, Brad Woodhouse, was an Obama campaign strategist.

‘Defining Challenge’

The strategy builds on one that Obama, who has called income inequality “the defining challenge of our time,” used in his 2012 campaign to defeat Republican presidential candidate Mitt Romney.

This year, Democratic U.S. House candidates are campaigning on issues related to income inequality -- such as increasing the minimum wage and extending jobless benefits -- without focusing on a district’s wealth gap, said Emily Bittner, communications director for the Democratic Congressional Campaign Committee.

“It’s really a focus on growth,” Bittner said. “This is about helping people in the middle class who feel squeezed feel more secure, and experience more opportunities.”

The congressional district breakdown of income inequality shows Democrats have a front-row seat for the widening gap, explaining why party members think they can win by appealing to voters’ sense of frustration that they’re falling behind.

Haves, Have-Nots

In a nation of haves and have-nots, the greatest disparities are in urban centers, which are home to the base of the Democratic Party: highly educated whites, and low-income minorities. The data show suburban and rural areas are more homogeneous both racially and economically, making it harder for Democrats to crack.

Republicans represent about two-thirds of the 35 congressional districts with the least amount of income disparity, many in rural and suburban areas. Several lawmakers representing these districts are aligned with the small-government Tea Party movement, including Jim Jordan of Ohio, Raul Labrador of Utah and Michele Bachmann of Minnesota.

Democrats, meanwhile, represent districts with the widest income gaps, which are located in the nation’s largest municipalities. They include House Minority Leader Nancy Pelosi’s San Francisco district, where inequality is on par with that of Bolivia.

Biggest Disparities

Among the districts with the widest income gaps, most are at least 95 percent urban, Census data show. New York, California and Florida account for 15 of the 25 districts with the biggest disparities.

They include the Fort Lauderdale, Florida, district represented by Schultz and the California district represented by Democrat Henry Waxman that includes West Hollywood and Beverly Hills.

At the center of the congressional district with the widest gap in wealth, New York’s 10th, the disparity is on full display within one block in the Chelsea neighborhood.

Surrounding the Fulton Houses, subsidized housing where dirty mops drip-dry from windows, are a $1.9 billion office building housing Google Inc., a market selling $500 bottles of champagne and the High Line, an elevated railroad-turned-park driving multimillion-dollar sales of condominiums and brownstones.

“I don’t buy a lot of new clothes anymore,” said Willie Graham, 68, pushing a walker along the broken cement paths that connect the Fulton House high-rises.

Russian Oligarchs

Nadler said escalating real estate prices driven by “Saudi princes” and “Russian oligarchs” are contributing to the widening gap in the district, home to the corporate headquarters of Goldman Sachs Group Inc. and Verizon Communications Inc. (VZ)

“The area has changed dramatically,” said Nadler, a Democrat who has held this seat since 1992 in Congress and for 15 years before that in the state assembly. “A lot of neighborhoods have become extraordinarily high-end.”

For Battle, who cut $30 from her grocery bill to afford a trip to the movies with her grandson, the gap between rich and poor is a short walk.

Two blocks from her subsidized-housing building are the condominiums at 15 Central Park West, which Goldman Sachs Chairman Lloyd Blankfein and Yankees slugger Alex Rodriguez have called home.

“It’s getting out of hand,” Battle said about escalating prices. “It’s like whatever income you have goes into rent or food, and people can’t enjoy the simple things in life anymore.”

To contact the reporter on this story: Michael C. Bender in Washington at mbender10@bloomberg.net

To contact the editors responsible for this story: Jodi Schneider at jschneider50@bloomberg.net Laurie Asseo

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