Americans Like Living in States With Less Income Inequality

Residents of Alaska, Utah, and Wyoming say their states—which boast the lowest levels of income inequality in the country—are great places to live. 

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Reuters

There is no doubt that the United States is becoming more and more unequal. Across the country, income inequality grew 15 percent between 1979 and 2012, as the middle class hollowed out and the benefits of growth accrued to the top 10, 1, or even 0.1 percent. And, it turns out, inequality is closely associated with the way that Americans view the places they live.

Take a look at the two maps below. The first is based on a recent Gallup poll that asked state residents whether their state was among the best or the worst places to live. To its right is a map of the Gini coefficient, the standard metric of income inequality that tracks distribution of income across the state’s population. 

MPI's Zara Matheson

The similarities are striking. Places that had higher self-regard and self-satisfaction, those in blue on the first map, tend to be the same ones that show up in lighter colors on the second, with far less income inequality. The states that rank as the best to live are among the most equal; the states rated as the worst places to live are the most unequal. 

The charts below, which compare the states with the most satisfied residents and those with the lowest levels of income inequality, shows this pattern in even sharper relief.

At the other end of the spectrum, Maryland and Missouri were the only states that ranked among the ten worst places to live that made it into in the top half of the ranking of states on income inequality. Connecticut, Mississippi, and Louisiana ranked as among the most unequal states and among the least satisfied ones. Wyoming, Alaska, Utah, Hawaii, and New Hampshire are the most equal states; all of them rank among the top seven states where residents called their state “the best or one of the best” places to live. Along with them, New Hampshire, Vermont, and Minnesota also fell among the top 15 most equal states. Texas was the sole outlier, the only place among the top ten in the Gallup poll that fell in the bottom half of the ranking of states by Gini coefficient.

The association between inequality and how residents view their states holds up statistically. My Martin Prosperity Institute colleague Charlotta Mellander ran a basic correlation analysis between Gallup’s best states rankings and a variety of social and demographic characteristics. (As usual I note that correlation does not equal causation and points only to associations between variables). Inequality was positively correlated where residents said their state was the worst place to live (.53) and it was negatively correlated with the percent of residents who said their state was among the best places to live (-.56).

More and more, Americans have realized that growing inequality is a looming and incredibly important economic and social problem. It affects how we can engage with our communities and whether we can afford to live where we do. In so doing, it affects our sense of well being and satisfaction with where we live. 

 

About the Author

  • Richard Florida is Co-founder and Editor at Large of CityLab.com and Senior Editor at The Atlantic. He is director of the Martin Prosperity Institute at the University of Toronto and Global Research Professor at NYU. More
    Florida is author of The Rise of the Creative ClassWho's Your City?, and The Great Reset. He's also the founder of the Creative Class Group, and a list of his current clients can be found here