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Bloomberg recently ranked U.S. cities for income inequality. Berkeley ranked tenth.

News and financial information giant Bloomberg ranks Berkeley the city with the tenth highest income inequality in the country.

Berkeley’s rank is based on Bloomberg’s computation of the Gini coefficients for 300 cities with more than 100,000 people in the U.S. A Gini coefficient of 0 would represent perfect equality (everyone with the same income), while a coefficient of 1 would show perfect inequality (one person with all the income). Bloomberg calculates an average Gini in U.S. cities of 0.4757. Berkeley’s Gini is 0.5438. Atlanta, Ga. has the most income inequality, according to Bloomberg, with a Gini of 0.5882. 

But as data journalism website 538 points out, Berkeley’s high ranking for inequality — together with other college towns like Cambridge, Mass. (12th), Eugene, Ore. (22nd), and Boulder, Colo, (24th) — “is because, according to the government’s definitions, most students have very little income, even if they come from rich families. Take out all those “low-income” students and college towns are actually slightly more equal than average.”

Both Berkeley and Cambridge, however, are affected less by the student distortion than many other college towns, according to 538’s analysis. Both cities have significant socioeconomic diversity, as well as the student population with very little income.

Snarky website Gawker headlined its reading of the Bloomberg data last week “College towns are pits of income inequality.”

According to the Bloomberg data, the lowest quintile in Berkeley has only 1.42% of the city’s total household income. The top quintile has 55.42% of the total household income.

Berkeley and Cambridge also have very high median household incomes compared to the other cities in the Bloomberg table. Berkeley’s median is $65,887, topped in Bloomberg’s top 25 only by Cambridge, with $76,264. According to the Census Bureau’s American Community Survey, 38% of Berkeley’s population has graduate or professional degrees. In Cambridge, 44% have graduate or professional degrees. There is a high correlation between incomes and education levels nationally.

According to Bloomberg’s calculations, taken from U.S. Census data, 19.4% of Berkeley’s population is in poverty (an individual making less than $11,490). That compares to percentages in the high 20s and 30s for the other top 10 cities in the table.

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Lance Knobel (Berkeleyside co-founder) has been a journalist for nearly 40 years. Much of his career was in business journalism. He was editor-in-chief of both Management Today, the leading business magazine...