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US Inequality [+ Addto myrT Millions mired in poverty as US upturn passes them by, study finds Report highlights stark inequalities as 50m remain in ‘distressed communities’ ‘Southern stares account for more than half the population in distressed communities the report says © FT monrage: AFP/Getty wv f in | Falus &h | savetomyrr ‘YESTERDAY by Sam Fleming in Washingron and Lauren Leatherby in New York More than 50m Americans live in districts that are mired in a “deep ongoing recession”, with falling employment and a shrinking business base, according to a report that highlights the fractured nature of the US recovery. According to research from the Economic Innovation Group think-tank, one in six Americans resides in a zip code it defines as a “distressed community”. These are areas with a falling number of businesses and in which the local population has low median income, poor labour foree participation, high levels of poverty and low educational achievement. Southern states, including Alabama, Arkansas and Louisiana, account for more than half the population in distressed communities, the report says. In Mississippi, the poorest performer, 43 per cent of the population lives in a distres compared with less than 1 per cent in Utah. ed community, ‘The report divides the country’s 26,000 or so zip codes into quintiles, ranked from most prosperous to distressed. Distressed areas, which also suffer high housing, vacaney rates, have seen a 6 per cent average fall in employment from 2011 to 2015, compared with a near 25 per cent surge in the country’s most prosperous areas. The research highlights profound economic divisions, even at a time when the US is in its third-longest recovery on record and when median incomes have just seen the strongest two-year surge in modern times. Many of the most distressed US communities are concentrated in the South Average distress scores by county WM Prosperous lll Comfortable Mid-tier MM At risk Ml Distressed Per cent of population living in distressed zip Per cent of population living in prosperous zip codes by state codes by state 040 M1020 20-30 M3040 40-50 (010 M1020 MM 20-50 M3040 MM 40-50 | [| [m) share tis cnart The country’s elite communities are enjoying “a spectacular degree of growth and prosperity”, the research finds, yet in the poorest-performing areas, “what little ‘economic stability exists is quickly eroding beneath their feet” The problems in distressed communities have not developed overnight: most have seen zero net gains in employment and business creation over the whole of this century so far. But the report finds that the prospeets of different areas are less likely to rise and fall together, as they onee did. “Not only is the gap large, but the trajectories are moving in opposite directions,” said John Lettieri, co-founder of EIG. “This is not what you would expect in a true national recovery.” Life chances show sharp contrast between America’s distressed and prosperous communities Prosperous Ill Comfortable Mid-tier MM At isk Ml Distressed Education Poverty Labour Average percentage of adults Average poverty rate Average of percentage of prime= ‘without a high schoo! diploma age adults not in work 25 % 50 20 % 40 5 * % 8 i 0 so 2 5 i 5 © a » a ° ° Employment Businesses Life Expectancy Average percentage change in Average percentage change Average life expectancy (years) employment, 201-2015 in business establishments, 2 8 80 20 8 e 0 5 cf 5 % ° 5 5 10 10 7 Sours Econo novation Group | FE Sharethicehart ‘Whereas prosperous communities added 188,000 businesses establishments from 2011 to 2015, distressed areas saw a net loss of 17,000. The best-off quintile of zip codes captured 57 per cent of the rise in business establishments over the five-year period — twice their share in 2011. ‘Those prosperous localities are home to 84.8m people, a larger group than any of the other five quintiles. They also host 45 per cent of the country’s advanced degree holders, more than the bottom three quintiles combined. Donald Trump, US president, campaigned on fears that large parts of the country ‘were being left behind in the recovery, and the research found that nearly a quarter of. his votes came from counties with stagnant or falling numbers of business establishments, compared with just 16 per cent of Hillary Clinton's. Strikingly, three- ‘varters of counties that flipped from backing Barack Obama twice to supporting Mr ‘Trump suffered both job and business losses over the five-year period. Most of the country’s majority-minority areas are distressed or at risk Distribution of the more than 4,000 US zip codes in which more than half the population belongs to minority racial and ethnic groups Mid ter 158% vf me Storemiscan ‘The research reveals a patchwork of fortunes between different states. In Utah, 47 per cent of the population lives in a prosperous zip code, compared with just 3.1 per cent of people in West Virginia. Some of the country’s most economically successful states also suffer from striking levels of deprivation: more than 22 per cent of the Texas population live in distressed ‘communities, nearly twice the proportion as New York or California. ‘The poor outcomes are mirrored in health. Mortality rates in distressed areas are 25 per cent higher than in prosperous distriets, and mortality rates from mental health disorders and substance abuse are 64 per cent higher. RECOMMENDED ‘Meanwhile, demographic analysis shows stark racial divides. Blacks and Native Americans Poverty, open sewers and parasites: are three times more likely to live ina ‘America’s dirty shame’ distressed community than a prosperous one. By contrast, Asians are nearly six times more likely to live in a top-tier community than a bottom-tier one. Comment: The ‘haves and have- mores’ in digital America Book review: Janesville, An American Story Looking at large cities, the most distressed urban centres by share of population are Cleveland in Ohio, Newark in New Jersey and Buffalo in New York. Distress in the South tends to be found in rural areas, while suburban commumities are overwhelmingly prosperous across all regions. The big cities with the highest share of prosperous zip codes are large suburban communities near big metro areas — Gilbert in Arizona, Plano in Texas and Irvine in California. San Francisco ranks at number five. ‘Copyright The Financial Times Lirited 207, Al ights reserved. You may share using our article foals. 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