Monday, June 04, 2018

Income Inequality

Compare the Gini coefficients for the various states. (Remember that lower is more equal.) There are individual oddities that one could fairly point out that make a state look better or worse than it might deserve. But there is a solid and easily-observable tendency that blue states are more unequal in income, red states more equal. Notice also that the increments are small until the last three: Connecticut, New York, Washington DC. As the high school social studies texts might ask, "What do you think is happening in those states?"

Alert readers might pick up another trend, but even noticing it will not answer fully the questions: "Why do poor people do so badly in blue states? Do they start off worse?  Do they get poorer when they are there?"


Doc at the Radar Station said...

I can explain Iowa. You've got a lot of blue collar unionized employees there and there aren't any Finger Lakes in Iowa. No fancy digs for the rich to covet.

james said...

DC aside, not dramatic variation. See national numbers

Christopher B said...

Doc, as a former Iowan I'll agree with the no Finger Finger lakes part of your comment but Iowa is among the least unionized states (2016 figures here). Unionization doesn't appear to correlate with low GC in a state.

James is right. That map appears to be scaled to obscure the fact that 43 of the 50 have GCs at or below the national average, and that the 7 above the average include both the poorest and richest states.

Also, if you want to talk about outliers on the low end, Hawaii being in the group below 440 is more interesting. Take a look at the correlation of GC eith this map.

Zachriel said...

Assistant Village Idiot: But there is a solid and easily-observable tendency that blue states are more unequal in income, red states more equal.

Are we reading the map wrong? It appears the red states of the South have generally high inequality. California, for instance, is tucked among several red states.


Christopher B said...
This comment has been removed by the author.
Christopher B said...

It's probably more relevant to look at the 7 states (plus DC) with a Gini Index above the US as a whole, .469. (I'm not sure if this is an average of the states or calculated separately).

44 California 0.471
45 Alabama 0.472
46 Florida 0.474
47 Louisiana 0.475
47 Massachusetts 0.475
49 Connecticut 0.486
50 New York 0.499
51 DC 0.532

Grim said...

The South has a generally high inequality because of its success, since the 1960s, of developing some flourishing cities. The South was the poorest region of the United States from the end of the Civil War which destroyed its economy and limited industrial base; this continued for decades because the banking system in the North chose to loan funds in ways that developed a monoculture of cotton production with the usual impoverishing results of agricultural monoculture. That monoculture only came to an end with the Boll Wevil, which destroyed even the cotton production economy; this happened in the late 1920s, and was immediately followed by the Great Depression.

So the South was really poor compared to the rest of the United States. However, Atlanta began flourishing after the war because American industry was world dominant, and Atlanta sat on major transportation routes. Atlanta was originally named "Terminus," because of all the railroads that connected there. Rail lines connect the port of Savannah to the rest of the country, and pass from New Orleans to the wealthy cities of the Northeast. And of course Atlanta built its famous airport, one of the largest and busiest in the world, to further take advantage of this traffic. That happened in the 1930s; Delta and Eastern Airlines made it their major hub in the same timeframe.

As a result of that increased traffic, people began to notice that -- however miserable the Atlanta summer -- the weather was nicer than the freezing north. Corporations began to shift south especially after the Civil Rights era made it politically and morally comfortable to do so. Atlanta now accounts for fully half the economic activity of Georgia. Other cities, notably Charlotte, Knoxville, and Birmingham have followed in Atlanta's footsteps.

The upshot of all that history is that a high level of inequality is to be expected. If half the wealth of the state is in one city, then the whole rest of the state is going to be dividing up the other half. But this isn't a sign of anything bad. It's a sign that, after a century of misery, economic conditions in the South have been improving for a few decades.

RichardJohnson said...

Here is data on some Southern states' per capita income as a percentage of US per capita income. Not most of the improvement occurred from the Depression to the early 1950s. Also note that the 4 Southern states that went for Eisenhower in 1952- Texas, Tennessee, Florida, and Virginia- tended to be more prosperous than other Southern states.

1931 65.2%
1952 89.2%
2017 93.1%

1931 41.6%
1952 63.3%
2017 79.3%

1931 48.0%
1952 73.6%
2017 85.9%

North Carolina
1931 46.1%
1952 70.0%
2017 85.9%

South Carolina
1931 38.4%
1952 69.0%
2017 80.2%

1931 51.6%
1952 66.8%
2017 87.8%

1931 70.1%
1952 89.8%
2017 107.6%

1931 75.0%
1952 85.3%
2017 93.0%


RichardJohnson said...

That would be "Note most of the improvement occurred from the Depression to the early 1950s."

Christopher B said...

Grim, look at the data, not the map. I think the scale was selected to give a particular impression. As james noted, there isn't a lot of variation until you get to the very top/bottom of the scale. The map colors approximately the same number of states in each group even though the highest group of two states (DC and NY) has almost the same span of Gini indexes (532-487=45) as the remaining four groups (486-419=67). It would look very different if the color breaks kept the span of the Gini Indexes consistent.

I think this comparison is also interesting

Assistant Village Idiot said...

Zachriel - the bottom 8 states have one solidly red state, two battleground states, and five deeply blue ones. There was some controversy a few years ago about how evenly Florida was divided in an election. Did you forget that, or just prefer not to admit it publicly? You prefer squinting to seeing.

To the OP: states with minority populations have less-equal Gini's. How is it that blue regions cannot do well by their black and Hispanic populations? How does that happen?

Grim said...

I don’t think ‘most of the improvement’ necessarily correlated with ‘most of the inequality.’ A lot of the 40s and 50s improvements in Georgia had to do with the war and its aftermath; Georgia was the site chosen for several massive Army bases including Forts Benning & Stewart. Those improvements meant lots of jobs that were widely distributed statewide.

I think my assessment of the source of the inequality is accurate. It may be that there are diminishing returns at work, too: it’s possibly a lot easier to get from 40% to 70% than from 70% to 85%. So the cities’ vast increase in wealth may end up being less of a jump than the broad (but smaller per capita) improvement associated with the vast military expansion in the South.

RichardJohnson said...

Correlation of GINI/income inequality with % Hillary: .549, which is a moderate correlation. The more inequal, the more vote for Hillary. What is interesting here is that in a lot of these high inequality states that go for Hillary, both the rich and the poor are voting Democrat. Certainly that the case for DC. Interesting that government city has the highest inequality in the country.

Of the 10 richest counties in the US, seven went for Hillary.
%for Hillary
Loudoun County Virginia 55.1
Howard County Maryland 63.3
Fairfax County Virginia 64.4
Hunterdon County New Jersey 40.3
Santa Clara County California 72.7
Arlington County Virginia 75.8
Douglas County Colorado 54.7
San Mateo County California 75.7
Morris County New Jersey 45.5
Williamson County Tennessee 29.2

Zachriel said...

Assistant Village Idiot: the bottom 8 states have one solidly red state, two battleground states, and five deeply blue ones.

We considered states to be Red if they voted for the Republican in 2012 and 2016, Blue if they voted for the Democrat in 2012 and 2016, and Purple if they changed from Blue to Red. We adjusted for Maine's split vote, but did not adjust for faithless electors. The results are weighted by Gini index not by Gini rank. Based on that, Red states are slightly more unequal.

State Gini% Redness, Weighted
District of Columbia, 0.532, -1, -0.53
New York, 0.499, -1, -0.50
Connecticut, 0.486, -1, -0.49
Louisiana, 0.475, 1, +0.48
Massachusetts, 0.475, -1, -0.48
Florida, 0.474, 0, 0
Alabama, 0.472, 1, +0.47

Redness average = 0.02

Assistant Village Idiot said...

Sure, if you call a battleground state red, I suppose you can come to all sorts of interesting conclusions. Index instead of rank is fine, but 50-50 states should be regarded as 50-50. As Gini moves slowly, I think two presidential elections is an inadequate sample. I don't think it's not accurate, it's just not accurate enough.

DC, NY, CT - pretty stunning.

To the OP, if anyone is still on board. There is still one factor to notice.

Grim said...

This guy has some theories about what that factor could be.

Texan99 said...

Don't the poor generally do worse in collectivist economies? It appears that the best way to increase equality is to degrade prosperity across the board, and unfortunately the brunt seems to fall on the poorest. I've never been able to understand why income inequality is supposed to be worse than unnecessarily grinding poverty at the lowest level. Do we really want to go back to the 17th century?

Assistant Village Idiot said...

@T99 - I think that is because the wrong theories are working. So we must try harder, comrade.

Zachriel said...

Texan99: Do we really want to go back to the 17th century?

Inequality was generally much higher in the 17th century.

Assistant Village Idiot: Sure, if you call a battleground state red

We treated them as Purple. Generally, by state, there is not much difference in income inequality between Red and Blue, contrary to the claim in the original post. However, if we weight by population, then Blue states are significantly more unequal.

This post was linked by Maggie's Farm.

Christopher B said...

Since I'm not talented enough to make a map, I'll substitute a simple list of the states broken into groups with a span of 20 points. The number preceding the state name is which color group they are in the map.

5 Utah 419
5 Alaska 422
5 Wyoming 423
5 New Hampshire 425
5 Iowa 427
5 Wisconsin 430
4 Nebraska 432
4 Hawaii 433
4 Idaho 433
4 North Dakota 433
4 Montana 435
4 Maine 437

4 Delaware 440
4 Indiana 440
4 Minnesota 440
4 Washington 441
4 South Dakota 442
4 Maryland 443
4 Vermont 444
4 Kansas 445
3 Nevada 448
3 Oregon 449
3 Michigan 451
3 West Virginia 451
3 Ohio 452
3 Oklahoma 454
3 Arizona 455
3 Missouri 455
3 Colorado 457
3 Arkansas 458
3 Virginia 459

3 Pennsylvania 461
3 South Carolina 461
2 New Jersey 464
2 New Mexico 464
2 North Carolina 464
2 Illinois 465
2 Kentucky 466
2 Rhode Island 467
2 Georgia 468
2 Mississippi 468
2 Tennessee 468
2 Texas 469
2 California 471
2 Alabama 472
2 Florida 474
2 Louisiana 475
2 Massachusetts 475

2 Connecticut 486
1 New York 499

1 DC 532