Sep 22, 2024
BY James Huang Assessing COVID-19's Economic Ripple: A Comparative Analysis of Median Household Income and Unemployment Rates Across U.S. Coasts (2017-2023)

2. Project Background As someone who wasn't present during the height of the COVID-19 pandemic, I find myself in a unique position to examine its economic impacts with fresh eyes. The outbreak in early 2020 is now a chapter in history books, but its echoes continue to resonate throughout our economy. With the pandemic behind us and a new era dawning, I believe it's crucial to re-examine the far-reaching effects of this global event, particularly on income disparities between the eastern and western coasts of the United States.

While I didn't personally experience the widespread lockdowns, the radical shifts in consumer behavior, or the turbulent labor market dynamics, I'm intrigued by how these factors may have shaped the economic landscape we inhabit today. The pandemic's effects were felt nationally, but I'm particularly interested in uncovering how regional differences in income levels, unemployment rates, and occupational structures between the country's coastal regions may have led to divergent economic outcomes.

3. Problem Space

• How did median household income (MHI) evolve on the eastern and western coasts of the U.S. from 2017 to 2023, and what notable differences can be observed in the MHI trajectories of these two regions?
  
• What specific impacts did the COVID-19 pandemic have on MHI in both coastal regions, and how did these impacts contribute to any observed divergences between the regions?
  
• How did unemployment rates and recovery patterns differ between the two coasts during and after the pandemic period, and what potential factors could explain these differences?
  
• Which coastal region demonstrated greater economic resilience or faster recovery, as evidenced by MHI and unemployment data?
  
• How did the pandemic affect pre-existing income disparities between the coasts, and have these changes persisted into the post-pandemic period? What long-term trends or differences in economic performance can be identified between the two coastal regions?

Software:
The data for the East/West Coasts of the United States from 2017 to 2023 includes:

• Data organization and analysis: Google Sheet, RStudio
  
• Data visualization: React for creating interactive charts(Claude), Datawrapper

For Unemployment Rate:

1. Export Unemployment Rate data for each state from 2017 to 2023
   
2. Group states into East Coast and West Coast categories
   
3. Calculate the average Unemployment Rate for East/West Coast states for each year
   
4. Calculate year-to-year percentage point change in Unemployment Rate for each region
   
5. https://docs.google.com/spreadsheets/d/1ZyaB674nvPGPegz5dRnT4HjFYRaevSPqvUWFsgxEWaY/edit?usp=sharing

Visualization of unemployment data:

• Line Chart: Average unemployment rate by state and year
  
• Bar Chart: East and West Coast Unemployment Rate
  
• Line Chart: Year-to-Year Percentage Change in Unemployment Rate

Observation and Interpretation:

1. Overall Trends and Patterns
   
2. Upward Trajectory: Both coasts demonstrate a consistent increase in Median Household Income (MHI) from 2017 to 2023.
   
3. Initial Parity and Divergence:
   
4. 2017: Near equality in MHI (West: $63,154, East: $63,303)
   
5. 2018 onwards: West Coast surpasses and maintains higher MHI and growth rates
   
6. Widening Gap: The difference in MHI between the two coasts grows over time, reaching over $5,000 by 2023. (West: $90,095, East: $84,676)
   
7. Pandemic Impact and Recovery (2019-2023)
   
8. Slowdown (2019-2020):
   
9. Both coasts experience reduced growth
   
10. West Coast maintains higher MHI and growth rate (West: 4.49%, East: 3.04%)
    
11. Strong Recovery (2020-2022):
    
12. Both coasts show significant improvements
    
13. West Coast demonstrates more robust recovery, with growth rates increasing to 6.88% (East: 5.81%) in 2020-2021 and 9.27%(East: 8.39%) in 2021-2022.
    
14. Peak growth in 2021-2022 (West: 9.27%, East: 8.39%)
    
15. Recent Moderation (2022-2023):
    
16. Growth rates decrease for both coasts
    
17. Gap narrows slightly (West: 4.55%, East: 4.26%)
    
18. West Coast maintains a slight lead
    
19. Percentage Change (Growth rate) Analysis
    
20. Consistent Advantage: The West Coast maintains higher year-over-year growth rates than the East Coast throughout the entire period.
    
21. Fluctuating Difference:
    
22. Peak difference in 2017-2018
    
23. General trend of decreasing differences with fluctuations
    
24. Widening during pandemic onset (2019-2020)
    
25. Consistent decrease since 2020
    
26. Recent Convergence: The difference in growth rates reaches its lowest point in 2022-2023 (0.29 percentage points).

Observation and Interpretation:

1. Overall Trends and Patterns
   
2. Fluctuating Trajectory: General trend of decrease from 2017 to 2019, sharp increase in 2020, followed by decline from 2021 to 2023.
   
3. Consistent Regional Difference:
   
4. 2017: Similar unemployment rates (West: 4.5167%, East: 4.1290%)
   
5. West Coast consistently maintains higher unemployment rates throughout the period.
   
6. Dynamic Gap:
   
7. The difference in unemployment rates between the two coasts fluctuates significantly.
   
8. Widest gap observed in 2019-2020, coinciding with the onset of the COVID-19 pandemic.
   
9. Post-2020, the gap narrows but remains larger than pre-2019 levels.
   
10. Pandemic Impact and Recovery (2019-2023)
    
11. Sharp Increase (2019-2020):
    
12. Both coasts experience dramatic rise in unemployment
    
13. West Coast: 118.65% increase (4.011% to 8.77%)
    
14. East Coast: 134.85% increase (3.303% to 7.757%)
    
15. Gap between coasts widens significantly during this period
    
16. Strong Recovery (2020-2022):
    
17. Both coasts show significant improvements
    
18. 2020-2021: West (-32.56%), East (-31.69%)
    
19. 2021-2022: West (-30.67%), East (-34.21%)
    
20. East Coast demonstrates slightly stronger recovery in percentage terms
    
21. Difference between coasts narrows but remains above pre-pandemic levels
    
22. Recent Moderation (2022-2023):
    
23. West Coast shows slight increase (4.1% to 4.194%, +2.29%)
    
24. East Coast continues to decrease (3.486% to 3.3136%, -4.95%)
    
25. Gap widens again slightly, reinforcing persistent regional differences
    
26. Additional Observations
    
27. East Coast shows consistently lower unemployment rates but higher volatility in percentage changes
    
28. East Coast has recovered slightly more, with 2023 rate (3.3136%) lower than 2019 rate (3.303%)
    
29. West Coast 2023 rate (4.194%) still slightly higher than 2019 rate (4.011%)

Visualization of MHI data:

• Bar Chart: MHI Percentage Change
  
• Line Chart: Difference of MHI Percentage Change between East and West Coasts

7. Discussion for problem space

• MHI Evolution (2017-2023):
  Both coasts saw consistent growth, but the West Coast outpaced the East. Initially lower, the West Coast's MHI surpassed the East in 2018 and maintained its lead. By 2023, the West Coast MHI reached $90,095 (42.7% increase from 2017), while the East Coast reached $84,676 (33.8% increase).
  
• COVID-19 Impact on MHI:
  The pandemic initially slowed MHI growth in 2020 for both regions, followed by accelerated growth in 2021 and 2022. The West Coast maintained higher growth rates, widening the gap between regions. The pandemic seemed to accelerate pre-existing income growth trends rather than causing a dramatic divergence.
  
• Unemployment Trends:
  Both regions experienced dramatic unemployment spikes in 2020, with the East Coast seeing a higher percentage increase. Recovery in 2021-2022 was significant for both, with the East Coast showing slightly faster improvement. By 2023, West Coast unemployment slightly increased, while the East Coast continued to decrease. Differences may be due to industry composition, policy responses, and population density variations.
  

• Economic Resilience:
  Both regions demonstrated resilience, but with nuanced differences:
  MHI growth: The West Coast showed greater resilience, maintaining higher growth rates throughout the pandemic and recovery periods.
  Unemployment: The East Coast showed a slightly faster recovery in terms of unemployment rate reduction from 2020 to 2023.
  
  The contrasting performance in MHI growth and unemployment recovery between the coasts can be explained by several interconnected factors:
  

1. Industry composition: The West's tech-heavy economy adapted well to remote work, sustaining income growth.
   
2. Labor market dynamics: The East's service-sector jobs rebounded quickly but contributed less to MHI growth.
   
3. Income inequality: The West may be experiencing a widening income gap within the region. High-earners might have seen income increases while lower-wage workers faced prolonged unemployment.
   
4. Cost of living adjustments: Western companies may have increased salaries more aggressively to retain talent.
   
5. Remote work effects: The West's embrace of remote work could have allowed continued productivity and income growth.
   

• Long-term Trends:
  The pandemic accelerated pre-existing income disparities, with the West Coast's higher MHI growth rates persisting post-pandemic. The income gap widened from $1,893 in 2019 to $5,419 in 2023. Long-term trends show consistent West Coast outperformance in MHI growth, but with more volatile unemployment rates. Both regions demonstrated strong recovery from the pandemic-induced economic shock, indicating overall economic resilience.

8. Reflection Reflecting on the use of Median Household Income (MHI) and unemployment rates to assess COVID-19's impact on U.S. coasts, I've come to appreciate both the strengths and limitations of these metrics. While they've provided a solid foundation, I found I'm missing crucial nuances. MHI offers a broad view of economic well-being but doesn't capture income distribution or cost of living differences. Unemployment rates showed job market health but failed to illuminate the quality of jobs or the full extent of labor market disruptions. I'm left wondering about the pandemic's varied impacts across industries and socioeconomic groups that these metrics couldn't reveal.

For future research, I think incorporating cost of living data could offer a more accurate comparison of living standards between coasts. Adding industry-specific information and occupational structure data might reveal fascinating shifts, like the move to remote work. I'm also intrigued by the potential insights from income distribution metrics, small business data, demographics, housing market trends, and consumer spending patterns. I believe these additions will provide valuable insights into various aspects of economic resilience and recovery, enabling a deeper examination of COVID-19's impact on the East and West coasts of the U.S.