By Emma Ockerman
More than half of America’s 100 metros saw improved income equality between 2019 and 2020, new research finds
The benefits of pandemic stimulus and a tight labor market that boosted workers’ wages may have helped boost income equality in major cities across the United States in 2020, according to new MagnifyMoney analysis from LendingTree .
Released on Monday, MagnifyMoney’s research used data from the US Census Bureau’s Gini coefficient, which measures income equality, to examine changes in 100 metros from 2019 to 2020. Through their work, the researchers found that 62 of those 100 cities had seen improvements in income equality over the given time frame, with the greatest improvements noted in Boise, Idaho; Des Moines, Iowa; Austin, TX; Winston-Salem, North Carolina; and Albuquerque, New Mexico
A Gini coefficient closer to zero demonstrates greater equality, while a higher Gini coefficient closer to 1 shows worsening equality. Boise’s Gini coefficient, for example, dropped from 0.0096 to 0.4440, which was considered positive.
To be sure, the researchers noted that income equality worsened further in Southern cities like Richmond, Va., in 2020. And income inequality persisted even in cities that saw some improvement in 2020, including New York, according to the report.
But the analysis could nevertheless add to a growing pile of evidence showing how special government programs, including stimulus checks and increased unemployment benefits, have succeeded in closing the ever-widening gap between the haves and have-nots despite widespread job loss early in the pandemic. This realization was particularly profound because income inequality had otherwise been rising for decades, the report notes.
“Not only were three rounds of economic impact payments sent to households, but additional government-guaranteed unemployment benefits also meant that, for the most part, even those who had lost their jobs still brought in enough money to join. ends meet,” LendingTree’s senior economist, Jacob Channel, said in the report. “In many cases, those who were unemployed at the height of the pandemic were making more money than they were doing at their jobs.”
Supplemental federal unemployment programs ended last year, along with stimulus checks, temporary child tax credit expansion, a federal eviction moratorium and more.
Related: The US poverty rate jumped in 2020, but one thing kept it from climbing even higher
Meanwhile, places that have seen income equality deteriorate during the pandemic may have seen declines due to less employee protection, the report said. In Richmond, for example, the Gini coefficient increased by 0.0133, the most of any metropolitan area examined by MagnifyMoney. Virginia “was among the states that enacted the fewest laws and policies to protect its unemployed population between February 15, 2020 and July 1, 2020 – a period in which the coronavirus began to spread rapidly to United States – according to a US Oxfam study,” the MagnifyMoney report states.
Virginia, like other states that have suffered from a deterioration in equality, has also failed to pass adequate legislation to protect workers from their employers forcing them back to work while sick, according to the report.
“In general, Southern states have more lax labor laws, which means it’s sometimes easier for companies to take advantage of employees,” Channel said in the report. “The so-called pro-corporate mentality that many Southern states are adopting can make it much more difficult for workers to negotiate raises or take actions that could help reduce income inequality. The long-term legacies of policies like Jim Crow and Red Line Laws have also hurt many Southerners – namely those in communities of color – and undoubtedly exacerbate inequality.”
(END) Dow Jones Newswire
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