52 million Americans live in ‘distressed’ zip codes, study shows

The U.S. economy is supposed to be in a post-pandemic boom, but for tens of millions of ordinary Americans, life has never been harder.

According to new research by the Economic Innovation Group (EIG), a staggering 52 million Americans reside in a “distressed” zip code—up from 50 million before the pandemic.

Distress scores are calculated based on the zip code’s poverty rate, unemployment rate, housing vacancies, employment growth, business formation, and the share of residents with a high school diploma.

Since Covid, major urban centers have become increasingly “distressed” as more affluent families move to the more prosperous suburbs.

According to EIG, the suburbs have grown the fastest “after seeing major influxes of domestic migration during the early pandemic era.”

In other words, people who could afford to move out of cities have done so, leaving behind lower-income residents.

Most of the distressed counties are concentrated in the Deep South and parts of the old Rust Belt. In contrast, places like Florida, the Northeast, and the West have a much higher concentration of “comfortable” or “prosperous” counties.

The report not only highlighted the growing gap between America’s haves and have-nots but also exposed the massive disconnect between data and Americans’ real-life experiences.

A huge disconnect

In a May 13 White House brief, the Biden administration lauded the “remarkably strong” U.S. economy—with 27 consecutive months of sub-4% unemployment.

Ordinary Americans aren't buying it. In April, the Conference Board’s consumer confidence index—a leading indicator of Americans' views on the economy—plunged to the lowest in two years.

“Consumers became less positive about the current labor market situation and more concerned about future business conditions, job availability, and income,” said Dana Peterson, the Conference Board’s chief economist.

“According to April’s write-in responses, elevated price levels, especially for food and gas, dominated consumer’s concerns, with politics and global conflicts as distant runners-up,” Peterson explained.

Meanwhile, Gallup’s economic confidence index also plunged in April, with only 24% of adults saying economic conditions are “good” or “excellent.” Most adults (44%) say the economy is “poor.”

According to Gallup, President Biden, Fed Chair Jerome Powell, and Republicans and Democrats in Congress have all received failing grades for their handling of the economy.

Americans continue to name inflation as the most glaring problem, with nearly two-thirds of respondents in a Fed study blaming higher costs for their worsening financial situation.

Although the U.S. inflation rate has declined sharply from its peak in June 2022, prices are still growing much faster than they were before the pandemic.