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IG of the Day: Virginia GINI

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James A. Bacon
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Source: Virginia Public Access Project
Source: Virginia Public Access Project

Where is income inequality in Virginia the most severe? College towns like Blacksburg, Charlottesville and Harrisonburg, and poor, rural mill-town jurisdictions like Danville and Grayson, Halifax and Greensville Counties.

Where is inequality in Virginia least evident? In the Washington suburbs and a broad swath of rural counties in eastern Virginia.

That’s the insta-analysis of a map published by the Virginia Public Access Project, which shows the GINI coefficient, a measure of income inequality, for Virginia localities based on 2012 data. (Hat tip: Tim Wise.)

— JAB

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9 responses to “IG of the Day: Virginia GINI”

  1. Hamilton Lombard Avatar
    Hamilton Lombard

    A lot of the extremes in income inequality are also in localities that have large older or younger populations, and not many people in the peak earnings age groups. Some of the oldest counties, such as Goochland, Bath, Rappahannock and Grayson have the highest levels of inequality. I suspect in those counties their older population is relatively more wealthy (retirees) than the rest of their population.

    1. James A. Bacon Avatar
      James A. Bacon

      Makes total sense.

      I don’t know if it’s methodologically possible, but I’d also like to see what the numbers look like when adjusted for regional cost of living.

  2. Hamilton Lombard Avatar
    Hamilton Lombard

    I think a cost of living adjustment might show that some areas have higher or lower poverty rates:http://statchatva.org/2013/05/21/why-virginia-needs-a-new-poverty-measure/

    But in the case of income inequality, I’m not sure it would change the coefficients. A cost of living adjustment would raise or lower everyone’s income so the coefficient would probably be the same.

    1. James A. Bacon Avatar
      James A. Bacon

      Very true, COLA adjustments wouldn’t make a difference for GINI calculations within a particular jurisdiction. But they would make a difference if the unit of comparison is the state or the nation. Interesting how your frame of reference drives the analysis and debate. Bernie Sanders, for instance, probably would not be terribly happy with the notion that the distribution of elderly people in a population is a major driver of wealth inequality, which is indisputably true at the local level but less clearly true at the national level.

      1. LarrytheG Avatar
        LarrytheG

        re: ” Bernie Sanders, for instance, probably would not be terribly happy with the notion that the distribution of elderly people in a population is a major driver of wealth inequality, which is indisputably true at the local level but less clearly true at the national level.”

        I think he WOULD – and he would point out that the reason you have that relative “wealth” is social security and Medicare – two things you’d get rid of in your world – right?

        1. DonR Avatar
          DonR

          Social Security and Medicare have virtually nothing to do with the wealth of older Americans. Look at the graph in the following article. The great jumps in median net worth by age occur before social security or medicare play a role.

          http://www.fool.com/investing/general/2015/01/26/the-average-americans-net-worth-by-age-heres-where.aspx

  3. LarrytheG Avatar
    LarrytheG

    I think there is misunderstandings over what income inequality is – and how it affects society in general.

    I strongly suspect if you went back 20, 30 40 years you would have ALWAYS found college towns to have that disparity.

    you would expect that.

    it’s certainly not something that changes is public policy should seek to “fix’.

    and I’m quite sure – any place which has lost it’s industry is going to reflect a lot of folks who no longer are employed – along with a certain level of govt employees – teachers, law enforcement, etc… as well as retirees with social security and medicare – which in turn power health care providers…doctors and other providers..

    urban areas will reflect the educated in jobs that require educated professionals – but you will also see a large number of people who provide basic services that are comparatively low paid.

    what the income disparity issue is about these days – I think – is people who got displaced from jobs that automation has taken or they went to college and got a degree that is no longer in demand or the numbers have dramatically dropped so far fewer are needed.

    they have no other skills unless they re-train so they end up earning far less than they did before -and this is the “income disparity” that is under discussion.

    that’s a legitimate focus of public policy and it involves orienting people to the reality – that it’s not their’s fathers economy any more.

    it’s re-training. it’s getting high school kids not bound for 4yr college to go to community college to get occupational certs. It’s getting the 4yr college kids to understand – they can’t just take any degree that interests them. They have to be thinking about what kind of education they need to be making a living later -and especially so if they have loans to pay back.

    gathering data these days is easier and easier. Actually interpreting it as useful information from which to guide and inform policy – seems a continuing problem.

  4. TooManyTaxes Avatar
    TooManyTaxes

    I think one factor that needs to be evaluated is missing. How big is the underground economy that is not reported for FIT purposes? And where do we think it is located?

  5. LarrytheG Avatar
    LarrytheG

    pretty sure the underground economy has always been there and still prospers.

    I often get two different prices for work to be performed – and one of them is for cash.

    on a similar note – I also notice on taxes how some folks know exactly what the limits are on charitable deductions and use them to their advantage in lowering the taxes due.

    finally – on taxes – again – two trends .

    the first is that more and more younger folks are working as independent contractors – and do not realize that at tax time -they will owe FICA taxes on their income. Even though it’s only their share – it’s still a significant amount of money even for someone who earns $20-30K a year.

    second -health care. If you do not have insurance – and cannot get an exemption – you will pay a penalty. It’s not huge for most people with lower incomes – a hundred or two hundred dollars.

    but what it has also done – is encourage people who are eligible for MedicAid to go sign up when before they did not and just went to the ERs. Now they still go to the ERs but the state pays!

    ” Out of the woodwork: Medicaid’s red-state rise”

    New Medicaid enrollees are coming out of the woodwork even in some anti-Obamacare states—which may further strain some of those states’ budgets.

    Seventeen of the 26 states that had not expanded their eligibility rules for Medicaid to capture more poor adults as of March 31 nonetheless saw net increases in the number of Medicaid recipients—a total of 550,300 people—since last fall, according to an analysis by health-care consulting group Avalere Health.

    Many are people who could have been covered by Medicaid before, but for some reason had not signed up for it, and may not have even been aware they could do so. Such enrollment is called the “woodworking effect” by health policy experts, because of the imagery it evokes of people coming out of the woodwork to sign up.

    http://goo.gl/LPq3j9

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