Income Inequality Rises in California, USA – Silicon Valley

“The survey says” examines various rankings and dashboards judging geographic locations while noting that these ratings are best viewed as a mixture of astute interpretation and data.

Buzz: Income inequality rose in the first two years of the pandemic era in California and across the country.

Source: My trusty spreadsheet analyzed new household income data from the US Census Bureau comparing pre-pandemic 2019 and 2021. The bureau’s research tracked the gap between the highest-paid and lowest-paid workers using the geeky “Gini” measure to gauge inequality.

Topline

How did the rich get richer amid the wild coronavirus economy?

Here are 36 reasons why California is so expensive

The last two years have not been good for the lowest paid workers. Their work tends to center on consumer service jobs at businesses disproportionately affected by the shutdowns. Or it was work that couldn’t be done remotely.

In California, a hub for leisure and hospitality jobs, income inequality rose 1% in 2019-21 as the entertainment industry suffered a slow recovery from the coronavirus chill.

In March, Southern California grocers employed by Ralphs, Albertsons, Vons and Pavilions scheduled strike permission votes that could signal a potential walkout at supermarket chains. (Photo by Mindy Schauer, Orange County Register/SCNG)

But California was not alone, with rising income inequality in 40 states. And California’s jump was only the 29th biggest. Nationally, the income gap increased by 0.8% while 2021 marked the first jump in inequality in a decade.

The largest increases in income gaps occurred primarily in states that benefited from pandemic-era population flows. Moves were most often possible for people with money and jobs that could be done outside of the office.

Wyoming saw the biggest increase, followed by Idaho, West Virginia, Utah and Maine. Inequality improved the most in Oklahoma, Indiana, Mississippi, New Hampshire and North Dakota.

Details

Please note that high-income inequality is not simply concentrated in high-income states, according to Gini mathematics.

Yes, well-paying California had the fifth-highest Gini inequality score in the nation in 2021. And the top three were also states with better-paying jobs — Washington, DC, New York, and Connecticut.

But No. 4 for inequality — perhaps surprisingly — was low-income Louisiana.

Incidentally, Florida had the seventh highest inequality and Texas the 17th. Both have below-average household incomes.

And the least inequality was found in high-income New Hampshire. It was just ahead of Alaska, Utah, Wisconsin and Indiana.

So, let’s take a look at the extremes of household incomes in 2021. You’ll see several states have inequality headaches.

California has the sixth highest median household income in 2021 at $84,907. That was topped only by Maryland at $90,203, then DC at $90,088, Massachusetts at $89,645, New Jersey at $89,296, and New Hampshire at $88,465.

Note that Texas was No. 24 at $66,963 and Florida was No. 37 at $63,062 against $69,717 earned nationally.

The lowest incomes were found in Mississippi at $48,716, followed by West Virginia at $51,248, Louisiana at $52,087, Arkansas at $52,528, and Alabama at $53,913.

Another view

In a way, this is a case of the rich not getting poorer.

This expansion in inequality has happened in two years, while household income – adjusted for inflation – barely budged in much of the country.

California’s 0.4% drop in revenue from 2019 ranked as the 27th best performer among states. Texas was No. 33, down 1.3%. And Florida was 18th at 0.5%.

And nationally, revenues rose 0.1% in those two years.

Pandemic relocations have helped boost revenues at the state level. Vermont rose 8.5%, followed by New Hampshire at 7.1%, Arizona at 5%, South Dakota at 4.8% and Montana at 4.4%.

Conversely, significant declines in income have occurred in states facing major inequality challenges. This is further proof that falling incomes are hitting low-income households the hardest.

DC had the No. 1 drop, of 7.9%, then Wyoming, of 5.3%, Delaware, of 4.4%, Louisiana, of 3.8% and Hawaii, of 3.6% .

At the end of the line

It was a painful two years for many low-paid workers. For example, service sector employers have struggled with a slow resumption of business due to coronavirus-related business limitations.

But 2022’s warm rebound for restaurants, entertainment and tourism could narrow the income gap. The growing prospect of a coming recession may also mean that any improvement in inequality could be short-lived.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be contacted at [email protected]

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