2021's Cities with the Most & Least Diversified Economies

From Wallet Hub, April, 2021

“Don’t put all your eggs in one basket,” say the wisest investing experts. But that wisdom applies to the economy, too. During the Great Recession, local economies that diversified, tapping into new ideas and innovations, proved to be more resilient than the cities that stuck to their old tricks. That advice rings especially true in 2021, where certain state economies have been hit harder than others by the COVID-19 pandemic in part because they were concentrated too highly in vulnerable industries.

Some researchers have found that greater professional and industrial variety increases a city’s productivity, a pattern in growing and large urban areas in the U.S. and around the globe.

In other words, diversification helps an economy the way it protects an investor’s portfolio: Over time, job gains in some sectors will offset the losses in others. And that was exactly the outcome at the end of the financial crisis, when the number of professions in health care and social assistance multiplied while construction and manufacturing occupation rates declined.

In order to determine the most diversified local economies — and therefore the least susceptible to the changes in the market — WalletHub compared the 501 largest cities across three key metrics: industry diversity, occupational diversity and worker-class diversity.

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2021's Cities with Most & Least Economic Class Diversity

From Wallet Hub, April, 2021

There is perhaps no simpler method of categorizing Americans than by economic class, as the wealth gap has become increasingly large. For example, the top 1% of Americans have about $34 trillion in wealth, around 15 times the wealth of the bottom 50%.

In an ideal world, no American would live in poverty, yet one study projects as many as one in seven Americans could have resources below the poverty level in 2021, with COVID-19 as one of the major contributing factors. But increasing diversity may be able to help improve socioeconomic conditions for people from all backgrounds.

Consider education dollars, for instance, which flow traditionally from local taxes. The more tax dollars that higher-income-earning families can contribute to the local economy, the more a city can invest in public schools. This ensures children from low-income households receive an equal shot at a good education.

To recognize the cities where economic class diversity is most balanced or mixed, WalletHub compared 501 of the largest U.S. cities based on two key metrics, “Income Diversity” and “Educational-Attainment Diversity.”

Hawaii’s US Nationwide Extremes:

City with Lowest Concentration of Households with Annual Incomes of $34,999 or Less Ewa Gentry, HI (5.00%)

City with Lowest Concentration of Households with Annual Incomes Between $35,000 and $49,999 East Honolulu, HI (4.80%)

City with Highest Concentration of Households with Annual Incomes Between $100,000 and $149,999 Ewa Gentry, HI (28.70%)

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2021’s Most Diverse Cities in the U.S.

From Wallet Hub, April, 2021

America is undergoing an extreme makeover, thanks to rapid demographic diversification. For example, while non-Hispanic whites are expected to remain the largest ethnic group for the foreseeable future, they will likely no longer make up a majority of the population by 2045. As the U.S. diversifies, it must stamp out hatred and promote unity, and there's a lot of work to do. For example, anti-Asian hate crimes spiked by nearly 150% in 2020.

It’s important to embrace diversity – and it’s good for the economy, too. Not only have waves of immigration changed the face of the nation, they’ve also brought in fresh perspectives, skills and technologies to help the U.S. develop a strong adaptability to change. Economies generally fare better when they openly embrace and capitalize on new ideas. Conversely, those relying on old ways and specialized industries tend to be hurt more by changes in the market.

This article is the final installment in WalletHub’s diversity study series. It combines household diversity and religious diversity with our previous reports on socioeconomic diversity, cultural diversity and economic diversity. WalletHub tallied the scores across the five major diversity categories for 501 of the largest cities across 13 metrics.

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