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Are you living in a distressed zip code?


According to the Economic Innovation Group, nearly 52 million Americans reside in areas classified as distressed zip codes. These zip codes are determined by factors such as poverty rates, the number of individuals without high school diplomas, the rate of adults’ employment, and housing vacancy rates.

Yahoo Finance’s Rachelle Akuffo delves into the specifics of what constitutes a distressed zip code, offering insights and practical tips for navigating these challenging conditions if you find yourself living in one.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Angel Smith

Video Transcript

All right, everyone, One of the other major things that we’re cracking here on the day.

Do you live in a distressed ZIP code?

Roughly 52 million Americans live in one.

That’s up from 50 million in 2018, according to the Economic Innovation Group.

To break down what this means.

Yahoo Finance’s very own Rochelle Ko is here.

Rochelle.

What do we know?

So first I want to sort of set the ground here by starting with the criteria used by the EIG in that survey for what defines a distressed zip code.

So one of the things they look at no high school diploma.

If you’re 25 and older without a high school diploma or equivalent, they also factor in the housing vacancy rate that’s unoccupied, habitable housing.

So that’s not things like rentals.

That’s actual houses that people would live in on an everyday basis.

Also the share of adults not working.

So that’s the unemployed within the prime age that’s between 25 and 54.

They also look at the poverty rate.

That’s if you’re living below the poverty line, the share of people there also the median income ratio.

That’s the median household income for the area.

And lastly, they also look at changes in employment over the past five years as well as changes in business establishments.

So if you’ve seen businesses come and go over the five years as well now it’s interesting.

The highest concentration of distressed areas are in the southern United States, and what it is is that we’re seeing the lasting effects of Americans who had the economic means to relocate during the pandemic.

So they took their wealth, their tax dollars, their skills and their businesses with them to other states and suburbs.

And this exacerbated the wealth divide, especially in large urban areas.

It also means that when you look at what’s happening with house prices, you saw that much faster home price appreciation in the suburbs.

Now that’s according to the USDA.

Now they’re saying that when you look at some of the repercussions here, economically disadvantaged individuals tend to experience the highest rate of mental health issues alongside poorer overall health, reduced mobility, reduced access to healthcare and economic limitations that affect access to goods and services that can help with the negative effects of climate change.

So there really is a a a domino effect that affects all aspects of people’s lives.

We’re just talking about food there.

Think about food deserts where you can’t access nutritious food as stores relocate to more profitable and prosperous areas you have public schools don’t have those tax dollars.

They don’t have the adequate resources.

So all those things pour into each other and really affect people’s economic mobility.

And so and so what kind of resources are there for people who find themselves in the situation where they’re in a distressed zip code?

Well, so first things first tap into your state based programme, so you really have to go out there.

Look for your unemployment benefits, disability insurance, Medicaid.

Also, there are some targeted federal policies, but they aren’t nationwide.

For example, the Economic Development Administration, which is part of the Chamber of Commerce they actually launched a recompete pilot programme.

Now this was actually authorised the Chips and Science Act to invest $200 million in grants in these persistently dis distressed communities.

They do have to have applied for it, though now that does include things like job creation and upskilling for prime age workers.

I reached out to the ED A.

WHO says that the winners for this year will be announced coming up this summer.

But they also do have year round funding opportunities on the ED A.gov website, another place to look the Department of Agriculture’s Emergency Community Water Assistance Grant Programme.

That’s what people obviously you need to be able to to keep the the energy in your house, have water in your house.

They have grants and there’s also a persistent poverty counties designation.

Now they all use similar criteria for these grants, as they do for some of these distressed, uh, economic areas as well.

But the eligibility is determined by Congress, which is why voting in your local your state and your national election is so important in terms of what gets prioritised and lastly, as an option if you perhaps we talked about the middle classes sometimes not being able to access some of these things because they make too much or too little by some criterias.

You also have your local public and private organisations, some of these charities and community events also offering free and subsidised resources as well.

So hopefully something that people can tap into in these stressful times, Brad.

Really actionable breakdown there, Rochelle.

Thanks so much for raising this.

Bring this to our attention.

Appreciate it.

Finances own Michelle coupe.



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