”Survey says” looks at various rankings and scorecards judging geographic locations while noting these grades are best seen as a mix of artful interpretation and data.
Buzz: Income inequality grew in the pandemic era’s first two years in California and across the nation.
Source: My trusty spreadsheet analyzed new household income data from the U.S. Census Bureau comparing pre-pandemic 2019 and 2021. The bureau’s research tracked the spread between best-paid and worst-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’s so darn expensive
The past two years weren’t kind to lower-paid workers. Their work tends to be centered around consumer-facing service jobs at businesses disproportionally hit by lockdowns. Or it was work that couldn’t be done remotely.
In California, a hub for leisure and hospitality jobs, income inequality rose by 1% in 2019-21 as the fun industry suffered a slow recovery from the coronavirus chill.
In March Southern California grocery workers employed by Ralphs, Albertsons, Vons and Pavilions scheduled strike-authorization votes that could signal a potential walkout at the supermarket chains. (Photo by Mindy Schauer, Orange County Register/SCNG)
But California wasn’t alone, with income inequality up in 40 states. And California’s jump was only the No. 29 biggest. Nationally, the income gap rose by 0.8% as 2021 marked inequality’s first jump in a decade.
The largest increases in income gaps occurred primarily in states that benefitted from pandemic-era population in-flows. Relocations were possible most often for folks with money and jobs that could be done away from the office.
Wyoming had the largest 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 math.
Yes, high-paying California had the nation’s fifth-highest Gini inequality score in 2021. And the top three were also states with better-earning jobs — Washington, D.C., New York and Connecticut.
But No. 4 for inequality — perhaps surprisingly — was lower-income Louisiana.
By the way, Florida had the seventh-highest inequality, and Texas was No. 17. Both have below-average household incomes.
And the least amount of inequality was found in high-income New Hampshire. That was just ahead of Alaska, Utah, Wisconsin and Indiana.
So, let’s peek at 2021’s extremes in household incomes. 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 vs. $69,717 earned nationally.
Lowest incomes were found in Mississippi at $48,716, then West Virginia at $51,248, Louisiana at $52,087, Arkansas at $52,528 and Alabama at $53,913.
Another view
In some way, this is a case of the rich not getting poorer.
This expansion of inequality came in two years where household income — adjusted for inflation — barely budged across much of the nation.
California’s 0.4% income dip from 2019 ranked as the No. 27 best performance among the states. Texas was No. 33, down 1.3%. And Florida was 18th at 0.5%.
And nationally, incomes rose 0.1% over these two years.
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Pandemic relocations helped push state-level incomes higher. Vermont rose 8.5%, then New Hampshire at 7.1%, Arizona at 5%, South Dakota at 4.8% and Montana at 4.4%.
Conversely, some big income declines came in states with major inequality challenges. That’s more evidence that income declines hit low-income households harder.
D.C. had the No. 1 drop, off 7.9%, then Wyoming, off 5.3%, Delaware, off 4.4%, Louisiana, off 3.8% and Hawaii, off 3.6%.
Bottom line
These were two painful years for many low-paid workers. For example, service industry employers faced slow rebounding business from coronavirus business limitations.
But 2022’s hearty rebound for restaurants, entertainment and tourism might narrow the income gap. Growing prospects for an upcoming recession also may mean any inequality improvements may be short-lived.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]