American Inequality

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On December 4, 2013 President Barack Obama gave a speech in one of the poorest areas of the nation’s capital and declared that inequality was the defining issue of our time. I remember listening to the speech and being struck by the boldness of the claim. President Obama had taken on so many issues - climate change, which could wipe out humanity; the worst financial crisis in decades, which cost millions of Americans their homes and jobs; and the biggest overhaul to our healthcare system in years. Why was inequality the number one issue? 

For this article, I’m going to do something a bit different: I’m going to write about why inequality matters. There is more to inequality than just a sense of right or wrong. For most of us, inequality just feels bad. But the truth is that inequality matters is far more important - impacting economic growth, how we shape policies, and the types of institutions we invest in. 

The main takeaways:

* Inequality is bad for upward mobility, making it harder for children to earn more than their parents

* Inequality is bad for GDP growth for advanced economies like America’s

* Concentrating resources results in “lost Einsteins” 

* Investing in low-income children is the best way to combat inequality

Thinking about the future

I recently became a new dad and so I’ve been thinking a lot about my son’s future and the world I want him to grow up in. At the same time, my wife and I are also meeting so many other new parents who too are navigating the challenges of raising kids well and trying to set them up for success. On top of this, as I’m sitting with my son I’m getting constant NYTimes push notifications about the election, wars abroad, and social issues that seem to be spiraling out of control. My own personal sense of why inequality matters isn’t just for the world I want for my own kid, but for all kids in the US who want to have a brighter future. 

For me, I spend all of this time and effort writing these articles because it can make a difference. One father wrote me after I published the article on veterans and suicide saying that the military base that I highlighted in the article as having the worst suicide rate was where his son had died from suicide and he was grateful that more people were highlighting the issues. I’ve worked with nonprofits and legal advocacy groups that have used our maps to direct tens of thousands of grant dollars to struggling regions. The concepts from this newsletter are now taught in more than 30 schools across the US and have made their ways into dozens of government reports and conferences. After every article, I get dozens of responses directly emailed or in comments talking about how a person or their family member has struggled with the topic at hand and they are glad to finally see some data validating it. 

One parent that I think a lot about when I’m writing is Akeesha Daniels. Daniels is a Black woman who lived in public housing in East Chicago but knew that something was wrong because her kids were always getting sick. She talked with her neighbors and found out that their kids were getting sick too. The families filed a petition with the Department of Housing and Urban Development (HUD) and realized that the water and yard where their kids would play was contaminated with lead. The housing project was built on top of an old lead refinery and the land was chosen because it was the cheapest available, despite the fact that city officials knew that a company had been leaching lead into the ground for decades. It is well known that children with lead poisoning perform consistently worse in schools, which haunts them for years leading to lower earnings later in life. “There were over 680 children in our housing complex being poisoned by lead every day,” said Daniels. 

Daniels’s story epitomizes so many of the reasons why I care about inequality. If we don’t give people a fair shot, either because we gave them bad housing, bad water, bad land, bad quality of life, or bad health, it can create ripple effects through our communities for generations. Kids do worse in school, have worse jobs, and have fewer opportunities later in life. When I think about those 680 kids I can’t help but wonder what I would do if I found out that my son had been playing in those same yards and drinking that same water. But inequality is about more than just the golden rule, and because this is the American Inequality newsletter, I’m going to focus on the data-driven solutions. 

What are we trying to accomplish? 

The number one reason why inequality is bad is that it reduces intergenerational mobility. This relationship, known as “The Great Gatsby Curve”, was made by famous by Miles Corak in 2013 and explains that the more inequality that a country has, the less likely it is that children will make more money than their parents did. This is one of the key parts of the American Dream, that each successive generation does a bit better than the last. With high levels of inequality, if your parents are in the 50th percentile (i.e. the middle class) it is more likely that you end up in the 30th percentile (i.e. low-income). 

Corak explained that the trend of declining intergenerational mobility was getting worse for Americans. The data showed that the wealthiest Americans were pulling up the ladder behind them, making it far more difficult for others to make their way up the earnings rungs. Don’t you want your kid to have a better life than you?

Is some amount of inequality necessary?

One of the key questions about inequality, particularly in capitalist countries, is whether this is a natural byproduct of countries getting richer. Of course it would be harder for people to reach those levels of uber wealth for the top 0.1%, right? I’m generally wary of any economic argument that argues for a ‘natural’ order of things so here are the facts. 

The answer about whether inequality can help your economy grow is that it actually depends on what type of economy you have. The research shows that there might be some level of inequality that can help for developing economies, but that high levels of inequality for advanced economies will reduce incomes on average. For a country like the US, researchers turn to the “Kuznets Curve” and see that higher levels of inequality reduce our income per capita. More inequality makes the US worse off. 

Proponents who argue that inequality is necessary for an economy point to studies of innovation and invention. The argument goes that if we look at the history of patents in the US, we find that concentrating resources in certain areas (universities, San Francisco, Boston) results in more innovation and more patents coming from those areas. This by its nature increases inequality because we are not equally distributing resources. They argue we need to keep giving all our funds to Silicon Valley and Harvard and MIT because that is where the most important inventions are coming from. 

The reason that this argument is faulty is that this is not causal. Raj Chetty, one of the youngest tenured faculty members at Harvard, often talks about “lost Einsteins” because of our failure to equally distribute resources across the US. Why would creativity be concentrated in some cities? Isn’t it just as likely that an Einstein is born in Cincinnati as San Francisco? Chetty grew up in New Delhi and saw how fortunate some were and others weren’t for no fault of their own. 

Why aren’t we doing more to combat inequality?

How would you end inequality? Arthur Okun explains the concept of “the leaky bucket.” If you are trying to give money to poor people, and you had to put those resources into a bucket to send it over to them, how much money would you be willing to leak to get it to there? Would you be ok losing $500 for every $4,000 you gave? What about losing $3,000? Okun’s leaky bucket explains the administrative costs of providing welfare in America. Offering food stamps, housing vouchers, and tax credits require hundreds of thousands of personnel to administer. Advocates for universal basic income often talk about the leaky bucket because they say that it would be a cheap way (i.e. low leakiness since everyone gets it) to administer a way to reduce inequality. 

Where would you start? Is the goal to reduce inequality for your country, your state, the world? $3,000 could save one person’s life in Nigeria by providing them with enough medical resources to avoid common lethal diseases like malaria. Do you weigh different people’s lives differently, perhaps depending on if they are old or young? 

The World Health Organization uses an approach called DALYs (Disability Adjusted Life Years) where 1 DALY represents the loss of the equivalent of one year of full health. Some argue that every policy should maximize the total number of DALYs, essentially saying we should do everything we can to promote more years of healthy life. 

But what about marginalized groups that might need special protections? Do you weigh their DALYs differently? What about the quality of those years? I may be living a healthy life, but if I’m in an oppressive regime that doesn’t respect my personal or religious freedoms, should my DALYs be prioritized or deprioritized? 

These questions often spill out on political stages, where liberals see the issue as a moral one that America is headed in the wrong direction on, and conservatives see wealth as the best way to reward those who contribute the most to prosperity or that a generous welfare state encourages laziness. The impasse here tends to stay in the moral liberal sphere (where we hear things like “this is who America is” or “we do not treat people like that”, and I’ve written about this too), but the data-driven reality is that inequality is bad for America. 

The Path Forward

The clearest choice for reducing inequality is to invest in low-income children. Programs like the Earned Income Tax Credit and Child Tax Credit have been America’s most successful poverty alleviation programs, and these types of investments also make sense: children have the longest runway for seeing the gains of those investments and they also have some of the least leaky buckets when we look at the marginal value of public funds. The EITC and CTC were actually first proposed by Republican president Reagan and have long had strong bipartisan support ever since. Investments in children accomplish the moral, empirical, and data-driven strategies for reducing inequality.

Special thanks to David Deming for providing the inspiration for this piece.

INTERESTING ON THE WEB

* 📚 Who uses libraries and what role do people want them to play in society? Educated democrats who are more religious have a POV. Department of Data

* 📉 Obesity declines for the first time in decades in America. Ozempic and Wegovy may be the cause - FT (from the excellent John Burn-Murdoch)

* 🤲 Americans are more reliant than ever on government aid. Great maps. - WSJ

* 🧳 Why are we moving into disaster prone areas? Mapping net migration into and out of parts of the US - The NYTimes

* Zillow introduces climate risk data into sales listings - First Street Foundation

* 🏆 A big congrats to my MIT advisor Simon Johnson, Daron Acemoglu and James Robinson on their Nobel Prize in Economics for their work on prosperity - MIT News

Mental health providers are not located where people are struggling with mental health. 1 in 5 adults in America is struggling with mental health and 43,000 Americans with an underlying mental illness die by suicide each year. However, mental health clinics and doctors are showing up in cities that have the most funds, rather than positioning themselves in the South and Mid-East where care is most needed. 

New data is now available that helps us shed light on which regions in America are suffering the most with mental health challenges so we can focus our efforts here to help turn the tide. But even when facilities are located where we need them, stigma still dominates the conversation.

Tega Orhorhoro knows how difficult it is to talk about mental health. Growing up in New Mexico, her family struggled to address and understand her mental health:

“Growing up, mental health was not something that was talked about in my family. We would say that anxiety was a myth, depression was a myth and praying was the answer to all the problems. I would never bring up depression or my mental health because I felt like all I had to do was go to school and get good grades. So when I couldn’t eat or sleep from anxiety, I didn’t know how to articulate how I felt.”

When care isn’t provided in communities that need it most, people like Tega are left alone, struggling to find help. 

Two datasets are instrumental in figuring out where policymakers, health advocates, and community organizations can focus their efforts to help Americans most in need. First, the CDC surveys Americans annually about their mental health (“Now thinking about your mental health, which includes stress, depression, and problems with emotions, for how many days in the past 30 days was your mental health not good?”) and second, the Center for Medicaid and Medicare Services keeps identifier records on the number of mental health providers in each county. This data helps us understand which regions in the US have the greatest strife as well as the least support. 

Kentucky, Tennessee, and West Virginia have the highest rates of mental health challenges. Residents in these 3 states report on having 18+ mentally unhealthy days per month on average.

McDowell County in West Virginia has the highest rate of reported mentally unhealthy days of any county in America — 25 mentally unhealthy days per month. 

Marie Bolden is a long-time resident of McDowell, WV and has witnessed her son’s battle with mental health, drug addiction, and poverty. As Marie sits at the breakfast table in McDowell, drizzling honey onto home-made biscuits, she reflects on how her son John represents everything that McDowell has become: “It’s like he’s in a hole with no way out. The other day he came in and said, ‘Ain’t that a shame: I’m 30 years old and carrying my life around in a backpack.’ It broke my heart.”

Residents in Massachusetts, on the other hand, report having the lowest number of mentally unhealthy days on a population weighted basis at 12.1 days. Massachusetts also has the best ratio of mental health providers to its overall population - There is at least 1 psychiatrist, psychologist, licensed clinical social workers, counselor, or specialized nurse practitioner for every 159 residents.

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Mental health is deeply connected to other social forces

Not only does McDowell county struggle with mental health, but it is a prime example of how inequality is tied up in so many other forces. McDowell has the lowest median household income in the state; the worst childhood obesity rate; the highest teenage birthrate; the highest drug-related deaths in the US; and the unemployment has been more than double the national average for the last 10 years. When the Food Stamps program was first established, McDowell County was the first place in America to receive food stamps. Mental health challenges don’t arise in a bubble, they are part of a larger system in which we fail to care for communities in need. 

This interaction is clear along at least one dimension —the relationship between mental health and unemployment. 

The chart above highlights the increasingly strong relationship between mental health and unemployment. The correlation between unemployment and mental health is highest when we look at southern counties alone. At the top of the chart, Jefferson County, Mississippi has an unemployment rate of 14%, while residents here report 21 mentally unhealthy days per month. CDC research shows that odds of depression are 3 times higher for unemployed than employed adults. Mental health and unemployment can also create a vicious cycle where those struggling with mental health may find it more difficult to get jobs due to stigma or lack of awareness, while a lack of a job may contribute to exacerbating mental health challenges like anxiety or depression. 

The Boca Health Center provides key insights on how mental health challenges are interwoven with other issues like drug addiction. Depression and addiction commonly co-occur, and each condition can complicate the other. They show that 40% of people with depression also struggle with addiction.

Without mental health support, many are thrown in jail

McDowell, like many counties in America, has no resources for support. McDowell is one of 50 counties in America where every 10,000 residents has access to just 1 mental health provider. The Substance Abuse and Mental Health Services Administration (SAMSA) estimates that the US has a shortfall of 58,000 psychologists; 49,000 social workers; 27,000 mental health counselors, and 15,000 psychiatrists, not to mention the 78,000 school counselors that America needs. 

Overall, 115 million people in the United States live in an area that is designated as a Mental Health Professional Shortage Area (HPSA), according to the Department of Health and Human Services. A region is deemed an HPSA if the ratio to mental health professional to residents is smaller than 1 per 30,000 people.

A mental health provider, by the definition above, is a psychiatrist, psychologist, licensed clinical social workers, counselor, marriage or family therapist, or mental health provider that treats alcohol and other drug abuse, as well as advanced practice nurses specializing in mental health care.

Despite this tremendous gap, the healthcare system overall has ways of adapting. Family medicine, internal medicine, psychiatry, neurology, and pediatrics have increasingly trained doctors to provide regular care for patients with mental health disorders. Just because a region lacks a psychiatrist or psychologist does not mean that it is completely without care. Still, 84 million Americans live in areas deemed primary care HPSAs.

Major cities tend to have the most providers. Los Angeles’s county has 34,521 mental health providers (with a ratio of 1 to 293 residents), Chicago’s county has 14,046 (with a ratio of 1 to 396) and Manhattan’s county has 13,986 providers (with a ratio of 1 to 116 residents). 

Instead, the three largest mental-health providers in the nation today are jails: Cook County in Illinois, Los Angeles County and Riker’s Island in New York. At least 400,000 inmates currently behind bars in the United States suffer from some type of mental illness — a population larger than the cities of Cleveland, New Orleans, or St. Louis — according to the National Alliance on Mental Illness. NAMI estimates that between 25-40% of all mentally ill Americans will be jailed or incarcerated at some point in their lives. All 3 prisons have been under federal investigation for officers beating and abusing mentally ill inmates. 

The Path Forward

Stigma, diagnosis, and awareness are among the several reasons that mental health providers may not be located where mental health need is greatest. Only 43% of people with anxiety are actually being treated for it. In turn, millions of Americans suffer in school, lose their jobs, or lose their homes, thereby exacerbating already growing inequalities. The less we are able to help those in need, the further behind those families will fall.

* Re-orient Funding for Mental Health Block Grants — The Biden Administration is currently providing $825 million in Community Mental Health Services Block Grant funding to states and territories. These block grants allow states to determine how best to use their funds to combat growing mental health catastrophes. While funding has largely tracked population size (i.e. states get $0.35-$0.45 per person), funding could instead be calculated based on current need. Tennessee and Indiana roughly have the same populations and get roughly the same amount of funding, but Tennessee residents struggle with mental health at a rate 10% higher. In addition, the block grants could come with stronger accountability mechanisms, so America doesn’t see the same pitfalls that it felt in the mid-1980s. 

* Equip Schools with Better Mental Health Services — Half of all chronic mental illnesses begin by the age of 14, and yet we spend years before and after doing nothing to help people in need. We can improve interventions in schools to help young people before tremendous harm may emerge. Both Michigan and Arkansas provide strong examples here. Michigan developed a school mental health Medicaid service standard that provides psychological testing, counseling, case management, and social work services under the Individuals with Disabilities and Education Act, and provides a definition of the service and professional credentials for service provision. Arkansas developed a state policy and procedures manual, as well as procedures to approve school-based mental health programs within Arkansas public school districts. We cannot add this as another job for teachers, we need to help schools get the services they need to succeed. 

Lessons from JFK

The last piece of legislation that John F. Kennedy signed before he died was the Community Mental Health Act. Kennedy’s vision was bold for the time: “We must move from the outmoded use of distant custodial institutions to the concept of community-centered agencies.” He wanted to replace asylums with community-based mental health centers that could provide “a coordinated range of timely diagnostic, health, educational, training, rehabilitation, employment, welfare, and legal protection services.”

Let’s return to Kennedy’s dream— let’s invest in services to care for those struggling with mental illnesses; let’s stop throwing people in jail when we don’t know how to address their challenges; and let’s send support to the regions in America that need it most. 

INTERESTING ON THE WEB

* 🇺🇸 Tim Walz really REALLY loves maps - Fast Company

* 🌞 How 3 million Americans used funds from the Inflation Reduction Act - solar panels win out - Heatmap News

* 🎲 Original Risk map from 1959 - Boardgames are cool

* 🏛️ If you too think about the Roman Empire, you’ll like this map - Brilliant Maps

Somehow in the 21st century, millions of Americans have no food. Lines for food banks routinely stretch for miles, millions of children go to bed hungry each night, and countless families are stuck making tradeoffs between buying groceries or paying rent. New analysis from the Association of American Medical Colleges and USDA shows that 44 million people are food insecure and 23.5 million live in food deserts. This means that 1 in 8 Americans struggles to eat daily, a significant change from 1 in 10 in 2021. The country is now facing some of the worst levels of food insecurity since the USDA first started measuring this metric in 1995.

While policies and programs exist to combat food inequality in America, these solutions have fallen remarkably short.

Food insecurity occurs when food is either too far away or too expensive to purchase. A food desert is one type of food insecurity. When a person lives in a food desert, this means that a supermarket is more than 1 mile away in an urban area or more than 10 miles away in a rural area. This can be manageable if your family has a car, but 2.1 million Americans live in food deserts and don’t have a car or public transportation on top of that to get to a supermarket, making it nearly impossible to achieve food security.

High food prices also cause food insecurity. If you live in one of America’s many rapidly gentrifying neighborhoods, you may have seen a Whole Foods pop up. While some have playfully rebranded Whole Foods as “Whole Paycheck,” the costs at these types of supermarkets can be ruinous for families that can’t afford to shop there, especially if other more affordable grocery stores get pushed out. This means that a low-income family living in a region of high-priced grocery stores effectively lives in a food desert.

Jefferson County, Mississippi is the most food insecure county in America. 1 in 3 people there is food insecure. Jefferson County also has the lowest median household income of any county in America at $20,188. The 8,000 families that live here are caught in a vicious cycle of food inequality — they live miles from nearby groceries, and even when they can make it to the supermarket, they can’t afford the healthier food options. They turn their cars around and go to fast food chains that are cheaper or closer to home. Life expectancy in Jefferson County is 5 years lower than the national average.

Food insecurity is dominant in the South, but it perseveres in the Midwest and Southwest too. For example, The Dreier family in Mitchel County, Iowa struggles desperately with food insecurity every day. When National Geographic interviewed Christina Dreier in 2013, she explained how she often has to send her three year old son, Keagan, to school without breakfast, hoping that he’ll eat the school’s free lunch. If Christina decides to get groceries during the week, she ends up working fewer overtime hours at her job, which means less money for food overall. As a loving mother, Christina often forego meals for herself to make sure that Keagan has enough hot dogs or tater tots to eat. Taking matters into her own hands, Christina planted a vegetable garden in her Iowa backyard, but it doesn’t produce nearly enough for healthy living.

The average low-income family spends 2 out of every 6 dollars they get from income on food each year, and another 3 out of every 6 dollars on rent, which doesn’t leave much left for internet payments, car payments, medical bills, or diapers for babies. Food insecurity is the USDA’s way of capturing these tradeoffs.

Groceries sold in food deserts are often far more expensive than those sold in cities or suburban areas. For example, milk prices in food desert tend to be 5% higher and cereal prices 25% higher. This is because getting the food to the regions in the first place can be expensive, leading to higher shelf prices that get passed on to consumers. As noted above, For low-income families, this means that they often spend a larger percentage of their paycheck on food, creating a vicious cycle of food insecurity.

Deserts and Demographics

Food insecurity does not hit all Americans equally — race is a dominating factor. Black families are twice as likely to be food insecure as White families, with 19.1% of Black households and 15.6% of Latinx households experiencing food insecurity in 2019 compared to 7.9% for White families. This clear racial divide is often a product of underinvestment in Black neighborhoods for supermarkets, grocery stores, and affordable food options. Majority-Black neighborhoods are more than twice as likely as majority-White neighborhoods not to have a supermarket.

8 of the 10 counties with the highest food insecurity rates in the nation are at least 60% Black. 7 of those 10 counties are in Mississippi along the river.

America is a global outlier in food insecurity. 1 in 6 Americans report running out of food at least once a year. In most European countries, only 1 in 20 report the same. In addition, the increasing rate of food insecurity is also far greater than in many other OECD developed nations. In the late 1960s, America had 9.6 million food insecure people — by 2012, this number had grown by a factor of five to 48 million.

American Obesity

While some Americans are starving, others are dangerously obese. Living in a food desert does not cause obesity, but it doesn’t help. Often it is easier for families to go to fast food chains than it is to get healthy groceries. 42% of American adults, or 96.6 million people, are obese according to the CDC.

Jefferson County, Mississippi is not only the most food insecure county in America, but it is also the most obese. Nearly half the adult population in Jefferson is obese. The men in Jefferson die from heart disease at a rate 20% higher than the national average.

In this Mississippi River county, life is objectively hard. Families have no supermarkets, have no healthy food options, and have such low incomes that it is hard break out of the vicious cycle that they are caught in. The county is 86% Black and voted overwhelmingly for Hillary Clinton in 2016 and for Joe Biden in 2020.

Nevertheless, federal and state level programs exist that can help those who live in food deserts or struggle with obesity.

The Path Forward

Food assistance programs do exist to help Americans in need. The Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, helps 40 million low-income Americans each year receive an average of $127 per month to buy food. On top of SNAP, the National School Lunch Program (NSLP) and the School Breakfast Program (SBP) serve approximately 15 million breakfasts and 30 million lunches daily at low or no cost to students.

Nevertheless, these programs are still unable to provide enough food to the counties most at risk. The USDA estimates that families would need another $20 billion to completely eliminate the food insecurity shortfall. As such — two possible paths exist for reducing food insecurity and improving healthy living in America.

* Increase the SNAP budget — Food stamps have a long history of feeding Americans. Since its inception in 1939, the Food Stamp program has helped hundreds of millions of Americans achieve food security. Every year it effectively lifts about 1% of the American population out of poverty. The most food insecure counties rely the most on SNAP. Unsurprisingly, I found there there is a 77% correlation between household income and food insecurity. An increase in the SNAP budget by 10% can reduce food insecurity for children by 22%.

* Increase Access to Healthy Foods — The New Markets Tax Credit (NMTC) has been one of America’s most successful policies for encouraging new development in underserved areas. Although NMTCs are not exclusively focused on food deserts, they have helped fund the creation of over 300 supermarkets in food deserts in recent years. This would make it easier for organizations like Daily Table to spread to neighborhoods most in need. Moreover, Congress currently has a bi-partisan bill on the floor called Healthy Food Access for All Americans Act (HFAAA) which would provide dedicated tax credits to stores and supermarkets identified as “Special Access Food Providers” (SAFPs). Congress should pass this bill so that food providers wouldn’t have to compete with other development types for tax credits.

* Promote healthy lifestyles through community programs - Michelle Obama’s Let’s Move! campaign helped 15 million children receive healthier meals. In addition, she was able to get commitments from 225 corporations like Walmart and Dannon to source healthier ingredients for the foods they sold. Just because the Obamas have left the White House does not mean that we need to relinquish our commitments to exercise, healthy food, and clearer food standards.

Christina Dreier and her son Keagan had their car repossessed a week after they were interviewed because they chose to eat. Food shouldn’t have to be a tradeoff for families, and this tradeoff shouldn’t fall disproportionately on Black and Latinx families. 54 million people are food insecure and 23.5 million live in food deserts as a result of the COVID-19 pandemic. Food is one our most basic needs - let’s build supermarkets, pass policies, and help ensure that children like Keagan don’t have to go to bed hungry.

American Inequality is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

$122 billion in federal funds that was meant to help schools recover from the pandemic is going to disappear in September. This means schools will be forced to cut tutoring, after school programs, and basic supplies at a time when many schools have still not bounced back

Kids know when schools, teachers, parents, and systems are not investing in them. In Idaho, which has the lowest school spending per pupil of any state in the US, students talk about how they feel embarrassed to be in rooms with leaky ceilings where tiles can fall down at any moment. They know which wall outlets not to use because the electricity doesn’t work on that wall, and which days they need to bring extra layers because there’s no heat in a particular classroom. Students act like nothing happened because they are so used to it.

American Inequality is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

This dataset looks at the average gap in dollars between actual and required spending per pupil among public school districts. Required spending is an estimate of dollars needed to achieve US average test scores in each district.

Schools are losing money due to budget cuts and lower enrollment

US public schools lost more than 1 million students between 2019 and 2022. This occurred as parents began homeschooling kids more during the pandemic; as school choice increased; and birthrates decreased over several years.

The Minneapolis Public School District saw a 17% decline in student enrollment from 2019 to 2025. The school has capacity for 40,000 students but only 23,000 students were enrolled in 2024. The city auditor explained that one fifth of the enrollment loss was due to charter schools or open enrollment. The Minneapolis Public School District received $262 million in federal pandemic funding over the last 3 years, but knows that this will disappear in September. In 2022, only 33% of students met the standards for math and 42% met the standards for reading.

New York spends the most per student, so why aren’t students there doing better?

The average spending per pupil for the nation’s 50 million students enrolled in public schools is $15,633. Places like (New York ($29,873), the District of Columbia ($27,425), and New Jersey ($25,099) are nearly double those numbers while Utah ($9,552), Idaho ($9,670), and Arizona ($10,315) bring those values down. Typically 80% of a school’s budget will go towards salaries and benefits for teachers.

However, these state-wide averages do not make any statements about how much is needed for students to achieve sufficient reading and math scores. In the map above, Quitman County in Georgia right along the border with Alabama has a per pupil shortfall of $63,406. This is because student test scores remain far below state and national averages. 

New York leads the nation in spending per pupil, but does not lead the nation in testing scores. New York is in the middle of the pack when it comes to reading and math scores, which goes against the conventional understanding that more investment typically equates to better performance. Nearly every district in the state is spending enough to get adequate test scores, but this isn’t the observed result. While some argue that these studies don’t take into account extracurriculars that the state sponsors, the general consensus seems to be that New York is paying more for less. 

Does Idaho have the best return on investment? Not quite… 

Idaho, on the other hand, has the best spending per dollar test score. The National Assessment of Educational Progress – often called “The Nation’s Report Card” and the gold standard of comparing educational attainment across states - shows that Idaho spends $39 per NAEP point. How does Idaho spend 42% less than the national average and still achieve high scores?

* Funding with additional sources: It appears that many of the local districts are actually supplementing their budgets with bonds and additional taxes that aren’t well captured in the national or state level data. Parents in low-income neighborhoods don’t like this approach because with fewer businesses and lower property values in the region, they gain less from additional taxes, whereas overarching state policies could control for these differences better. 

* Inequitable spending: Wealthier districts get far more funding, which boosts the overall state performance. These students performing far above the average helps bring up the overall score for lower-income districts that tend to perform worse.  

Chicago, on the other hand, had one of the best performing school districts pre-pandemic when accounting for its funding per pupil. The school uses an International Baccalaureate curriculum. The students read the Junior Great Books. The school hosts a community farmer’s market. The mayor has pushed for longer school days and expanded pre-K. The high performance there has happened even with declining enrollment, low budgets, and 75% of children coming from low-income homes. From 3rd to 8th grade, students saw the equivalent of 6 years of grade improvement, not just 5.

Vouchers are not the answer

Other states like Arizona (3rd lowest spending per pupil) have helped keep budgets down through state-funded voucher programs. In 2022, Arizona pioneered the largest school voucher program in the history of education. As ProPublic explains, “Under a new law, any parent in the state, no matter how affluent, could get a taxpayer-funded voucher worth up to tens of thousands of dollars to spend on private school tuition, extracurricular programs or homeschooling supplies… Yet in a lesson for these other states, Arizona’s voucher experiment has since precipitated a budget meltdown.”

Arizona now faces a $1.4 billion budget shortfall, much of which was a result of the new voucher spending.” Arizona is now having to make cuts to other state programs like one to assist in water scarcity, another meant to expand highways, a project to rollout air conditioning in more prisons, and cuts to community colleges.  

The Path Forward

Public school K-12 budgets come from 3 different funding sources: state, local, and federal. State and local funding make up roughly 90% of school funding, so these are the most important buckets to target to ensure that students. 

* Create ‘change-points’ to open up more state funding: Studies from Ohio, Michigan, California, Texas, and Massachusetts have all found that boosting funding improves test scores. Kentucky is the only state that has not found compelling evidence in 2003. While the funding in New York is perplexing, it is hard to know the counterfactual - how much worse would students perform without that funding? Studies generally show that a 2-3% increase in school budgets decrease high school drop-out rates by 0.5-0.8%. In this case, more money tends to improve outcomes. State funding used to make up just 18% of education funding in 1920. It now makes up 45%. Legislation is often needed to make this change, and New Hampshire and Michigan show how a deep review of how states spend their money can open up new ‘change-points’ for a meaningful increase in school spending. 

* Equalization for property tax funding across districts: The US is one of only three OECD nations that does not provide more resources to disadvantaged schools (the other two are Turkey and Israel). This is because the other largest share of funding for public schools comes from property taxes - wealthy communities, with higher property values, tend to have better schools because they get more funding. This can amount to a gap of an additional $17,000 per student per year. Equalization is the process by which states can move funds around across districts to ensure that lower-income neighborhoods with lower property values get the support they need. Studies have found that the best way to implement equalization is to take small amounts from many districts that are better off instead of one large lump sum from the wealthiest district. However, some states like Texas obfuscate this approach, so it is important to learn from them about how to promote better transparency.  

With the new school year upon us, students are about to walk into classrooms that remain sadly underfunded. Bookshelves will remain bare, bathroom stalls will remain broken, cafeterias will not have enough chairs. Communities improve when all students do better, not just some. With the start of the school year rapidly approaching and election season coming up, identify what your local leaders are doing to make sure that your child and their friends are getting the very best. 

The Anxious Generation takes a national and historical perspective on the rise of social media and how it impacts youth, but when we start to break this down by region, we see that some areas are likely to be more anxious than others.

The life expectancy for Americans has fallen in recent years. As well as the Covid pandemic, other factors driving this are gun and drug deaths, as well as healthcare inequalities.

Original air date: September 21, 2023 on BBC

American Inequality is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

🎉 A version of this article appeared earlier today in Business Insider. Check it out here 🎉

INTERESTING ON THE WEB

* 💪 Awesome upcoming Data & Democracy Workshop series taking place August 2024 is focused on empowering election officials, policy professionals, and researchers to undertake data-driven projects that bolster free and fair elections - LINK

* 👰‍♀️ Child marriages run rampant in the US: 300,000 child marriages in the last 25 years, largely in Nevada, Idaho, Arkansas, and Kentucky - LINK

* 🛑 States including Texas and South Dakota are pushing new bans on guaranteed income programs - LINK

* 🤔 Did the 401K drive greater inequality? - LINK

* 🥷 How scammers are stealing food stamps from millions (thanks to the folks at Georgetown for highlighting this one) - LINK

Sleep is critical, but a full third of Americans do not get enough of it, and the trend has been getting worse. We all need at least seven hours each day in order to function properly. That critical time allows our bodies to start repairing cells, store memories, and balance our emotions.

When you don’t get enough sleep, it can impact everything from how much money you make to your mental health to your likelihood of getting dementia, heart disease, and diabetes.

American Inequality is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Hustle culture success stories often make it seem like you can get more out of life on less sleep. Successful CEOs like Apple’s Tim Cook and Robinhood’s Vlad Tenev tout their limited sleep schedules. Gordon Ramsay barely sleeps during the week, and loves to yell at his line cooks about how that has helped him get to where he is today.

While different people tend to feel more alert at different times of day — aka night owls or early birds — everyone needs at least seven to nine hours of sleep each night. Teenagers need a full eight to 10 hours. And there is emerging evidence that women, who historically haven’t been included in sleep studies, need more rest than men. 

The internet is littered with advice on how to get enough sleep: keep your phone in a different room, don’t drink alcohol before bed, turn the thermostat down. There’s even specialized advice for couples: maybe separate bedrooms will help. Those with extra cash can take things a step further — beyond putting their penthouses far above the fray. Drake, for instance, bought a $395,000 horse-hair mattress that supposedly improves circulation. Michael Phelps sleeps in a hyperbaric chamber that simulates being at 9,000 feet. And expensive products like Oura’s smart ring and Whoop’s smart band promise to use data to improve your sleep.

The messaging implies that proper “sleep hygiene” (and expensive products) can fix chronic sleep depravity. This idea led researchers to believe that people in cities — where sleep impediments like noise pollution, bright lights, cramped conditions, and poor airflow are common — got the worst sleep. But research by my team at American Inequality has found that the most underslept people actually live in low-income, rural areas, primarily in the South. Residents of West Virginia, Kentucky, and Alabama regularly get the least amount of sleep — and it’s not because they don’t have horse-hair mattresses.

What causes bad sleep? 

There are 4 main reasons the South and the Appalachian counties have the worst sleep in America. 

* Stress: Stress is one of the strongest indicators of poor sleep. People who have financial, physical, or emotional stress tend to have worse sleep. In the counties seen in the map above in red, we observe some of the highest unemployment rates and lowest incomes as people are deeply stressed about their futures and livelihoods.

* Poor physical health: People who are struggling with chronic health issues tend to have far worse sleep as well since those illnesses tend to keep them awake or in hospitals. 

* Bad sleep habits: Areas where people tend to drink more, eat more fast food, or exercise less tend to get worse sleep. 

* Physical factors: Noise and light pollution, crowded rooms, lack of air conditioning in high temp areas, and crime, all cause sleep disturbances and tend to cluster within low income areas, leading to further inequalities. 

The data comes from the CDC’s Behavioral Risk Factor Surveillance Survey, which asked 432,000 people the following question: “During the past thirty days, for about how many days have you felt you did not get enough rest or sleep?”

Stress about finances and health is the strongest contributor to bad sleep

Researchers have found that stress — financial, physical, or emotional — is one of the strongest indicators of poor sleep. Economic stress, in particular: People in poverty in the US report getting the least amount of sleep. A 2022 survey found that 87% of Americans lose sleep worrying about their finances. And a 2020 study found that 13% of newly unemployed people get four hours of sleep or less a night, half of what a regularly employed person gets on average. In counties where about half the population is underslept, many of which are in Alabama, unemployment rates are twice as high as the US average and median household incomes teeter at $35,000. 

Mingo County, tucked in the southwestern corner of West Virginia, is the most sleep-deprived county in the most sleep-deprived state. One in four Mingo residents lives in poverty — double the national average. On top of that, the county struggles with poor health — another major contributor to poor sleep. Nearly half of Mingo residents are obese — 10% above the national average — and one in three smoke cigarettes — triple the national average. Mingo residents also have the highest rates of hypertension, cardiovascular disease, and being uninsured in the state. 

On the other end of the spectrum is Boulder County, Colorado, which gets the best sleep in America with 8 in 10 people getting a good night of rest. In Boulder, the unemployment rate is one of the lowest in the state and median household income falls at $92,000. In major cities like Manhattan and San Francisco, where median incomes fall at $90,000 and $126,000 respectively, seven in 10 people report getting sufficient sleep. Money may not buy happiness, but it does seem to buy better sleep.

Of course money isn’t everything. Mental and physical health are also factors. In our analysis, we found a 79% correlation between mental health and poor sleep. A 2022 study by Columbia researchers confirmed these mental health findings on a global scale. 75% of people with depression say they struggle to fall asleep or stay asleep and 50% of people with chronic pain report getting insufficient sleep. As many as half of people with cancer don’t get enough sleep.

The effects of poor sleep on incomes, health, employers, and the community

“Sleep is linked to health, but it’s also linked to wealth. Sleep is a pillar of health and well-being. Unfortunately, the opportunity for a good night’s sleep is not evenly distributed across populations, with many of those who need sleep most facing more barriers than the rest of us.“

Aric Prather told us the above when we asked him about sleep habits. Aric is the author of The Sleep Prescription and knows how important this can be for changing outcomes.

The worst part is how sleep depravity can spiral out of control: Poor income, depression, and physical pain make it harder to sleep, and the lack of sleep makes all of these situations more difficult to manage. Americans with sleep disorders earn an average of $2,500 less each year. Sleep-deprived workers are more likely to have to leave their jobs and their workplace mistakes cost employers up to $3,100 a year. One worker at a Boston accounting firm was so sleep deprived he accidentally deleted a project that took 1,000 hours to complete while another shifted a decimal point and overcharged the client by a million dollars. Other studies have found that if enough people in your community got an additional hour of sleep a week, it could increase your earnings by 1.1% in the short run and by 5% in the long run. 

Negative feedback loops: Insufficient sleep can also exacerbate the very diseases that make it difficult to sleep in the first place. Researchers at Johns Hopkins University have found that poor sleep increases the likelihood of developing cancer, dementia, heart disease, type 2 diabetes, and obesity. It also accelerates the spread of cancer, particularly breast, colon, ovary, and prostate cancer. Once these negative feedback loops begin, it can make it harder for people to dig out of cycles of inequality. The situation spirals out of control. 

Community impact: This lack of sleep is also dangerous for our communities: Every month, one in 20 Americans fall asleep at the wheel. It’s estimated that as many as 1,550 deaths and 40,000 personal-injury accidents are caused by drowsy drivers each year. According to the CDC, high school students who do not get enough sleep are far less likely to wear seatbelts, much more likely to ride with a drunken driver, and more likely to drink and drive themselves.

Can you “Hack” your sleep?

The conversation about sleep has largely focus on individual sleep hacks. One of the most popular approaches, “The Military Sleep Method,” was popularized in a 1981 book to explain how soldiers could fall asleep anywhere and anytime despite operating in highly stressful environments. The technique relies on relaxing every part of the body from head to toe, breathing in a thoughtful manner, and trying to “not think” for 10 seconds. A new sleep hack has emerged recently which involves shining a red light on your face while sleeping to improve melatonin production. However, there is scant scientific research backing up its efficacy. 

Some advice, like building a regular sleep schedule, breathing filtered air, and getting daily exercise will probably help you get better sleep. But individual hacks tend to distract from what is actually plaguing the most sleep-deprived Americans. 

The Path Forward

It’s morning again in America, but we’re tired. Insufficient sleep is a social, financial, and healthcare issue in America that disproportionately impacts low-income and unhealthy communities. While giving people more financial security and better healthcare would go a long way to reducing some of the known causes of this inequality (and in turn break the negative feedback loop that furthers low wages and poor health outcomes), more immediate solutions may be able to provide some welcome rest. 

* ⏰ Move school start times to 8:30 AM - Several studies found that delaying school start times to 8:30 AM or later would add $83 billion to the US economy within a decade. The school start time is earliest in the most sleep deprived states, beginning at 7:40 AM. on average in Mississippi and 7:49 AM. in Alabama. The gains would come in part through decreased car crashes as well as increases to students’ increased lifetime earnings from better performance in school. The study assumed that bedtimes did not change and so students would be better rested. California and Florida recently passed bills requiring that all public high schools would now start at 8:30 AM. 

* 🧘‍♀️ Sound sleeping campaign  - Healthy sleep behaviors have proven to be one of the most productive ways to improve sleep for children and adults alike. Creating a regular schedule, reducing screen time in bed, avoiding alcohol or sweets late at night, can all meaningfully improve sleep. One app in particular has seemed to lead to much better sleep outcomes - Calm. Across multiple randomized controlled trials, those who used Calm for just 8 weeks experienced lower fatigue, better sleep, and improved mental health, including a 21% reduction in insomnia symptoms and 19% decrease in daytime sleepiness. This stands in stark contrast to the other approaches to ‘hack’ sleep since it has proven data for its effectiveness. 

* 😴 Create profession-based rules on sleep support - In 2003, the Accreditation Council for Graduate Medical Education implemented rules limiting work hours for all medical residents to ensure they got enough sleep. While care for patients and doctors’ well-being have since improved, 40% of healthcare workers still weren’t getting enough sleep when the CDC last looked at the issue in 2017. Industries such as transportation also have rules to protect sleep, limiting truck drivers to 11 hours on the road at a time. But there are many professions where people are left to their own devices. In the food services industry, where 40% of workers don’t get enough sleep, people have to juggle inconsistent shifts and low pay that often requires taking on multiple jobs. Long hours and unpredictable schedules can make sleep hard to come by. California’s new “right to disconnect’ law would fine bosses for reaching out to workers after hours.

The US loses 1.2 million work days each year due to sleep deprived Americans. When people start to fall behind on sleep, they spill into traps of financial, social, and healthcare inequalities. Local governments, schools, individuals, and employers are on the frontlines to lead change to ensure that the US population becomes better rested. We all deserve a fresh start to the day.

🎉 A version of this article appeared earlier today in Business Insider. Check it out here 🎉

American Inequality is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Americans are increasingly at risk of having lower incomes, poorer health, and a worse shot at opportunity even before they are born. More babies are now born with low birthweights than in the last 30 years. This has caused growing inequalities that can persist if not properly addressed. In certain parts of the country, that risk may be ten-times greater. 

Jeremy is the author of American Inequality, a biweekly newsletter that uses data visualization to highlight U.S. inequality topics and to drive change in communities. His work has been published in TIME, Bloomberg, and the LA Times. He was a dual-degree masters student at MIT Sloan and the Harvard Kennedy School and was formerly a macro policy strategist at the Federal Reserve. He now works at Google and lives in Brooklyn.