Morning Consult | Axios Inequality Index
Source: Morning Consult Economic Intelligence
Each month, Morning Consult conducts over 260,000 survey interviews on a wide variety of economic and financial topics, allowing us to precisely gauge how economic inequality is shifting in response to policy developments, business conditions and current events. This data is inputted into the Morning Consult/Axios Inequality Index.
Our economic inequality index is based on four indicators: consumer confidence, employment outcomes, employment expectations and financial vulnerability. When there are larger gaps between income groups on these indicators, the level of inequality rises. A full methodology and explanation of the index is available below.
Key Takeaways
The Morning Consult/Axios Inequality Index jumped from 4.6% in April to 6.4% in May, indicating a widening of economic inequality. In an uncertain economic environment, consumer confidence is rising among high-earning Americans, helping to widen the economic inequality gap while pay losses mount.
Consumer sentiment among U.S adults from the highest-earning households shot up in May, rising 7.0% month over month. This compares with an increase of only 1.4% among those from households earning less than $50,000 annually and 3.4% among all adults.
The rise in consumer confidence among high earners coincides with mounting job insecurity amid a potential white-collar recession. According to Morning Consult’s Lost Pay and Income Tracker, the share of adults from households earning at least $100,000 who have experienced a loss of pay or income in recent weeks increased to 10.6% in May. This compares with 9.3% of those earning $50,000 to $99,999 and 11.6% of those earning less than $50,000.
Expectations of future job losses are also on the rise among high earners, as mass layoffs in high-paying fields like tech and financial services spread to other white-collar professional roles. For three consecutive months, the share of high-income Americans expecting a loss of employment income — which was 24.0% in May — has been higher than the equivalent share of low earners.
Inequality Indicators for May 2023
Source: Morning Consult Economic Intelligence
Consumer Confidence
Source: Morning Consult Economic Intelligence
Employment Outcomes
Source: Morning Consult Economic Intelligence
Employment Expectations
Source: Morning Consult Economic Intelligence
Financial Vulnerability
Source: Morning Consult Economic Intelligence
Source of This Data
Methodology
The Morning Consult/Axios Inequality Index relies on Morning Consult’s proprietary survey research capabilities to collect the four data series that feed into the index.
Monthly sample size (May 2020–May 2023)
Index of Consumer Sentiment: 102,219
Lost pay/income tracker: 68,293
Employment expectations: 1,237
Financial vulnerability: 2,203
Index Calculation:
1. Convert daily and weekly values to monthly values. The index averages weekly values for the lost pay/income tracker and daily values for the Index of Consumer Sentiment to produce monthly values.
2. Convert Index of Consumer Sentiment values to net percentages. The Index of Consumer Sentiment is on a scale from 0 to 200 while the other three series are percentages that run from 0 to 100 percent. This difference in units prevents direct comparison of the four components and limits the ability to combine them into a single inequality index. In order to address this issue, the ICS values have to be reduced by 100 and divided by 100 so that they reflect net percentages.
3. Calculate each of the four components. Each of the component series is calculated by taking the standard deviation of the three values across the income spectrum. The resulting values represent the degree of variation or dispersion from the mean among low-, middle- and high-income adults. The higher the component value, the greater the inequality across income groups.
4. Calculate the overall index. The Morning Consult/Axios Inequality Index is an average of the four component values. The higher the index value, the greater the inequality across income groups.
FAQs
1. What is the Morning Consult/Axios Inequality Index?
The Morning Consult/Axios Inequality Index measures economic inequality across income groups on a monthly basis.
2. How does the Morning Consult/Axios Inequality Index define economic inequality?
The Morning Consult/Axios Inequality Index defines economic inequality in terms of consumer confidence, employment outcomes, employment expectations and financial vulnerability, each of which plays an equally important role in capturing the economic experiences of adults across the income spectrum.
3. Why is it important to measure economic inequality?
Traditional economic indicators provide limited insight into the ways in which different groups of adults are experiencing the economy, thereby increasing the risk of economic policies leaving behind certain groups of individuals.
Persistent or increasing economic inequality casts doubt on the fairness of America’s economic system and undermines the sustainability of economic growth.
4. How does the index compare to the Gini coefficient?
Unlike the Gini coefficient, the Morning Consult/Axios Inequality Index does not measure the distribution of income or wealth in the country. Rather, it measures the impact of income differences on driving differences in economic experiences.
5. How are Morning Consult and Axios planning on measuring and analyzing other forms of economic inequality not included in the index?
Morning Consult and Axios are both committed to measuring and analyzing additional forms of economic inequality not explicitly included in the index, including issues related to wealth disparities and intergenerational economic mobility. These additional forms of economic inequality exist not only across income groups, but also by race, ethnicity, gender, educational attainment and parental status, to name a few. Future monthly releases will highlight some of these additional disparities in economic experiences via special reports and analysis.
6. How is the data for the Morning Consult/Axios Inequality Index collected?
The Morning Consult/Axios Inequality Index relies on Morning Consult’s proprietary survey research capabilities to collect the four data series that feed into the index.
7. How should the index values be interpreted?
The values of the Morning Consult/Axios Inequality Index answer the question “how differently are U.S. adults with annual incomes below $50,000, between $50,000 and $100,000 and over $100,000 experiencing the economy?” The higher the index value, the more differently adults across the income spectrum are experiencing the economy.
8. How often will the index be published?
The Morning Consult/Axios Inequality Index will be published on a monthly basis during the last two weeks of the month.
About Morning Consult
Morning Consult is a global decision intelligence company changing how modern leaders make smarter, faster, better decisions. The company pairs its proprietary high-frequency data with applied artificial intelligence to better inform decisions on what people think and how they will act. Learn more at morningconsult.com.
Email [email protected] to speak with a member of the Morning Consult team.
Correction: A previous version of this page included incorrect March figures for the Inequality Index, as well as for pay loss trends, due to a data collection error. It has been updated to reflect the correct numbers.
Jesse Wheeler is a senior economist at decision intelligence company Morning Consult, where he delivers insights on economic and geopolitical trends impacting the United States and major global markets.
Prior to joining Morning Consult, Jesse worked as an economic and political risk analyst at MUFG Bank, where he focused on U.S. fiscal, monetary and foreign policy, and at Fitch Solutions, where he conducted macroeconomic research and forecasting for Latin American markets.
Jesse received a bachelor’s degree in history and environmental science from the University of South Carolina and a master’s degree in international economics from George Washington University.
Follow him on Twitter @JesseSprWheeler. For speaking opportunities and booking requests, please email [email protected]
