Published Dec. 23, 2020


There are many factors that can lead to diminished physical and mental health. And in a year when the COVID-19 pandemic wreaked havoc on the economy, financial hardship was brought to the forefront in the discussion of our nation’s health. 

Because economic opportunity is not distributed evenly, our study set out to determine the American cities where people may be more vulnerable to worse mental and physical health outcomes due to local economic crises.

We examined every area of the country using three key metrics: the percentage of residents below the federal poverty level, the change in unemployment from 2019 to 2020 and the local living wage to minimum wage ratio. 

Key Findings

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Table showing the 20 most depressing American cities based on major economic factors

Laredo, TX, a border town located 150 miles south of San Antonio, was the area with the most depressed economy heading into 2021, with 21% of residents living below the poverty line, a 169% rise in unemployment in the past year and a minimum wage that is just 64% of the local living wage.

Poverty’s Effect on Mental and Physical Health

The poverty level is determined as the minimum income experts deem necessary to cover basic living needs. This minimum income is the “poverty threshold.”

Research has shown a strong correlation between poverty levels and levels of physical and mental health. Poverty is associated with “shorter life expectancy, higher rates of infant mortality and higher death rates for the 14 leading causes of death.” And in terms of mental health, common mental disorders have been found to be roughly twice as frequent for poor people as they are for the wealthy.

The relationship between poverty and health becomes a cycle that’s hard to escape. People who can’t afford quality health care are far less likely to receive the treatment they need, which only further deteriorates their condition. Individuals with incomes below the poverty line are four times as likely to go without health insurance as people who have incomes at 400% of the federal poverty level. 

The high cost of quality health care can lead sick or injured people further into financial despair. 

In the McAllen-Edinburg-Mission area of Texas, more than one-quarter of all residents live below the poverty threshold.

The second-most poverty stricken area in the U.S. can be found just 60 miles away in Brownsville, TX. Both areas are located in the southern tip of Texas, just across the Mexican border. 

Evidence of poverty in Southeast Texas is starker when considered in the broader context of our study. Texas is home to 7 of the 20 most economically depressed areas in the U.S., as illustrated by the map below.   

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Map showing the most depressing metro areas in Texas according to economic factors

Job Loss Can Lead to Physical and Emotional Stress

2020 was an especially turbulent year for American workers, as the national unemployment rate reached its highest level ever recorded by the Bureau of Labor Statistics, at 14.7%. 

Like poverty, unemployment shares a correlation with both physical and mental health. Unemployment leads to loss of income and – often – health insurance, making the unemployed less likely to seek the medical care needed to treat a health condition. 

And the financial stress resulting from unemployment can even be the root causes of serious health conditions.

  • Research from the Harvard School of Public Health found that workers who lost a job were twice as likely over the next 18 months to develop a new chronic disease or cardiovascular issue such as high blood pressure, diabetes or heart disease.

  • The long-term unemployed have been found to be twice as likely to develop “mental illness, particularly depression and anxiety disorders, compared to employed persons.” 

We examined the percent change in unemployment from 2019 to 2020 to assess how COVID-19 further impacted local economies.

The Kahului-Wailuku-Lahaina area of Hawaii experienced a 674% year-over-year increase in unemployment. But the high number is a bit of an outlier: Hawaii is one of just two states (along with Nevada) for which tourism contributes at least 10% of the state’s gross domestic product, and travel and tourism to Hawaii was all but wiped out during the pandemic. 

Like poverty, unemployment tends to cluster and can be reflected in the overall economic status of a particular area. Our research found that Alabama was home to 7 of the 20 most economically depressed areas in the U.S., as illustrated by the map below. Unemployment spiked in each of these 7 cities and urban areas in Alabama in 2020. 

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Map showing the most depressing metro areas of Alabama according to economic factors

Montgomery and Tuscaloosa each experienced more than 200% unemployment rate increases from 2019 to 2020, while Mobile experienced a 198% change. 

Where Minimum Wage Doesn’t Cut It

We also examined every city’s minimum wage as a percentage of the area’s living wage according to the Massachusetts Institute of Technology’s Living Wage Calculator. In other words, how far does minimum wage stretch in each market?

For instance, the minimum wage in Laredo, TX, is only 64% of the area’s living wage. In Santa Fe, NM, the local minimum wage is just 58% of the local living wage. Even the most competitive minimum wage among the 20 most economically depressed markets, the Anniston-Oxford-Jacksonville area of Alabama, was just 70% of the living wage. 

The closer a minimum wage comes to an area’s living wage, we can assume an individual will be able to better afford quality health care, healthy food options and other resources instrumental to good health.

A widening divergence between the minimum wage and the living wage indicates worsening income inequality in that area. Income inequality tends to parallel depression.

One study examining this correlation found “the current prevalence of ‘any depression’ was significantly associated with income inequality—the more unequal, the higher the depression prevalence.”

Making matters worse, the United States reached a level of income inequality in 2018 that was the worst since the Census Bureau began tracking it more than 50 years ago, though that figure improved slightly in 2019 before the impending economic downturn in 2020.1


Research strongly suggests there is a correlation between economic standing and physical and mental health. And because economic outcomes in the U.S. can vary greatly from one city to another, residents of certain areas may be more vulnerable to diminished physical and mental health.

Our study found a concentration of economic hardship in southern cities, especially in Alabama and Texas. Residents of the 20 cities on our list may potentially be at a higher risk than residents of more prosperous cities for health issues such as depression and cardiovascular disease in 2021 and beyond.

Methodology and Data Notes

Our study calculated the following metrics: percent below poverty level, percent change in unemployment from 2019 to 2020 and living wage to minimum wage ratio using the following sources:

  • Percent below poverty level taken from the U.S. Census Bureau.

  • Percent change in unemployment taken from U.S. Bureau of Labor Statistics. (Dec. 3, 2020). Table 1. Civilian labor force and unemployment by state and metropolitan area.

  • Living wage to minimum wage ratio calculated by dividing a city’s minimum wage according to the Economic Policy Institute’s Minimum Wage Tracker by that city’s living wage according to the MIT Living Wage Calculator.

The three values for each city were normalized to a scale of 0-100 for comparison purposes. The 20 cities with the “worst” overall scores in the U.S. are included in this report.

1 Semega, J, et al. (Sep. 15, 2020). Income and Poverty in the United States: 2019. Table A-3. Income Distribution Measures Using Money Income and Equivalence-Adjusted Income: 2018 and 2019. U.S. Census Bureau.

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