It used to be better to be down and out in Beverly Hills than elsewhere. Not so much anymore. In mid-December the U.S. government released data on income inequality around the country from the 2010 Census. In the past 10 years, as in the decade before, the gap between rich and poor has grown almost everywhere, but it has grown particularly acute in the South, the East and in cities with the nation's wealthiest populations, like Greenwich, Conn.; Beverly Hills, Calif.; and New York City. A recent study from the International Monetary Fund found that countries with small income gaps tended to have more stable growth and fewer financial crises than those with high levels of inequality. That seems to be the case among U.S. states as well. On average, the 10 states that the Census found to have the smallest income gaps had an average unemployment rate of just 6%, nearly a third lower than the 8.9% unemployment rate in the 10 states where the income gap was the most extreme. States with large income gaps like Florida and California also had the biggest housing bubbles—and crashes.
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