For my first Data Digest of 2023, I explored household income in the Coachella Valley. Household income has risen since the COVID lockdowns, especially for those with the lowest incomes. Persistent inflation, however, has taken a painful bite from these needed gains. Income is earned or received during a limited period. Many US households live paycheck to paycheck. They have little chance of accumulating wealth. Unlike income, wealth takes an extended time to acquire and build. Wealth allows households to sustain their needs, goals, and choices over time. Wealth is a key indicator of financial security. And wealth can be passed on from generation to generation. Today we look at average and median net worth in the valley as one indicator of household wealth.
This map shows the estimated average net worth of households in each Census block group in the Coachella Valley. A census block group is a geographic unit one step smaller than census tracts. They typically contain a population between 600 and 3,000 people. As usual in our region, we find substantial disparities in household net worth throughout the valley. The estimated 2023 average net worth for all of the valley is $1,217,900. A sizeable majority of block groups (212) have an average net worth below this amount, symbolized by the two lightest shades of red. The two darkest shades represent only 122 block groups in the valley. A few very wealthy households can greatly skew the average net worth higher and misrepresent the majority of lower-income households. That’s why we need to also look at median net worth (see map below).
The Coachella Valley has the highest average net worth when compared to the whole regions of Riverside County ($1,046,600), California ($1,207,900), and the US ($961,900).
Median Net Worth Tells a Different Story
One immediately sees that the four classifications for median net worth are significantly lower than average net worth. Take a look and compare a few census block groups on each map. Are there significant differences in their values between average and median net worth? Large differences are indicators of noticeable wealth inequality. While the whole region comparisons of average net worth were above $900,000, median net worth is merely 10% of that. For the Coachella Valley, it is $155,000. That means half of all households have a net worth below $155,000, and half have a net worth above. Riverside County has the highest median ($185,000), followed by the US ($157,000) and California ($156,900).
According to the Pew Research Center, upper-income families in the US have over 7 times as much median wealth as middle-income families and 75 times as much wealth as lower-income families. In 1983, the ratios were 3.4 times and 28 times, respectively. And the gaps continue to rise, with the share of middle-income family wealth falling. The US has the highest level of income equality among the G7 countries. And there are significant wealth inequalities when we consider race, ethnicity, and gender.
Income and wealth are both key indicators of financial security for a family or an individual. The value of assets owned by a family or an individual (such as a home or savings) minus outstanding debt (such as a mortgage or student loan) is net worth, or wealth. Wealth is accumulated over a lifetime or more as it may be passed across generations. Wealth can be a source of retirement income, it can protect against short-term economic shocks, and it can provide security for future generations. CVEP is a regional economic development agency. Thinking regionally, we continually call for an often unpopular but essential long view of the economy. Like wealth, a healthy regional economy provides stability and sustained growth, for all. This is CVEP’s mission.
Source: US Census, Esri Business Analyst, Pew Research Center
