WalletHub on Racial Diversity in the United States
Author(s): Scott Douglas Jacobsen
Publication (Outlet/Website): The Good Men Project
Publication Date (yyyy/mm/dd): 2025/03/28
Chip Lupo is an experienced personal finance writer currently contributing to WalletHub. With a background in journalism from Elon University, he has worked across various sectors, including finance, sports, politics, and religion. Chip has expertise in SEO best practices, content creation, editing, and proficiency in Microsoft and Adobe applications. His career spans over two decades, during which he has held roles as a compliance analyst, wire editor, and night city editor. Chip’s passion for media and communications drives his commitment to high-quality content. Lupo talks about 2025’s most ethnically diverse U.S. cities. Factors like policy, legislation, and social shifts influence demographic trends. Hate crimes rose in 2023, with a 45% increase in Los Angeles County. Top diverse cities include Germantown, Jersey City, and Gaithersburg, with Montgomery County, Maryland, leading. Birthplace diversity and racial distribution play key roles, with projections indicating no single ethnic majority by 2045. Lupo discusses economic and social impacts, emphasizing linguistic diversity and immigration’s influence. The report refines methodology, focusing on socioeconomic diversity and granular data analysis.
Scott Douglas Jacobsen: Today, we’re back with Chip Lupo of WalletHub, an analyst for them. We will discuss 2025’s most diverse cities in the United States.
Various factors, including policy, legislation, cultural shifts, and social media, influence demographic diversification in the United States and contribute to the trends observed in analytics and statistical data.
As the U.S. continues to diversify, social dynamics shift. In 2023, there was a notable rise in hate crimes—for example, a 45% increase in Los Angeles County, reaching a historic high of 1,350 incidents. Given these changes, how does the diversification of the United States impact the economy and other critical areas such as politics and society?
Chip Lupo: Well, Scott, first of all, when we talk about diversity in this context, we are primarily referring to ethnic diversity—specifically, the demographic composition of racial groups such as White, Black, Hispanic, and Asian/Pacific Islander populations in the U.S.
Now, let’s first examine the top three most ethnically diverse cities in 2025:
- Germantown, Maryland
- Jersey City, New Jersey
- Gaithersburg, Maryland
Interestingly, three of the top four cities—Germantown, Gaithersburg, and Silver Spring (ranked fourth)—are all in Montgomery County, Maryland, a suburban area near Washington, D.C. This proximity to the nation’s capital plays a significant role in their diversity. D.C. itself, aside from being a major tourist attraction, offers extensive international opportunities in terms of employment and education. The presence of highly regarded schools and a strong internationalculture makes it a desirable place for people of all ethnic backgrounds to integrate into these communities.
In ethnically diverse cities, economic benefits emerge as people bring a wide range of skills and perspectives from their respective cultural backgrounds. This diversity fosters the growth of unique businesses, such as ethnic restaurants and culturally specific services, enriching the local economy. Exposure to different cultures also encourages social cohesion, fostering a deeper appreciation for diverse traditions within a shared community.
You mentioned hate crimes earlier. The more integrated communities become, the more people learn to appreciate different cultures as part of their social environment.
Jacobsen: Now, looking at the top five most ethnically diverse cities:
- Germantown, Maryland
- Jersey City, New Jersey
- Gaithersburg, Maryland
- Silver Spring, Maryland
- Kent, Washington
These rankings remain consistent over time, with a fairly even score distribution among the top cities. On the other hand, at the bottom of the rankings—cities ranked #501 to #497—we have:
- Parkersburg, West Virginia
- Clarksburg, West Virginia
- Barre, Vermont
- Rutland, Vermont
- Watertown, South Dakota
Despite these lower rankings, the diversity index scores across all 501 cities do not vary drastically. The highest-ranking city has a score of 73.03, while the lowest-ranking city has a score of 55.84. Given that this range spans over 500 cities, the variation is not as substantial as expected.
While some cities stand out in diversity, even those at the bottom of the list are not entirely homogenous. Analyzing these rankings with a nuanced perspective is important, considering that regional and historical factors influence how diversity manifests in different parts of the country.
Why does this metric seem to follow an almost perfect Gaussian curve? By its looks, the distribution appears highly symmetrical.
Lupo: One key factor among the bottom-tier states is their household diversity levels. However, what primarily distinguishes them is their birthplace diversity. Among the cities ranked at the top, birthplace diversity does not seem to be a defining trend—many high-ranking and low-ranking cities have lower birthplace diversity scores. This metric considers how many people living in a city or state were born locally versus how many immigrated from another country.
This trend appears consistent across all rankings. However, the bottom half of the list differs significantly: the racial and ethnic mixes in those areas are not as evenly distributed. While diversity exists across all regions, cities such as North Platte, Nebraska; Keene, New Hampshire; and Rochester, New Hampshire, show less balanced racial compositions. In contrast, top-ranking cities tend to have populations where the four primary racial groups—White, Black, Hispanic, and Asian/Pacific Islander—are nearly evenly split.
That said, while an equal distribution among racial groups is a key feature of highly diverse cities, many cities do not reflect this balance. One or two groups often comprise a significantly larger population share. These imbalances contribute to the overall variation in diversity index scores.
Another challenge in analyzing this data is the sheer size of the study. With so many cities included, the scope of diversification across the United States is immense. The report is structured around five major diversity categories—socioeconomic diversity, cultural diversity, economic diversity, household diversity, and religious diversity—each weighted evenly at 20 points out of 100. Within each category, numerous subfactors further refine the rankings.
Jacobsen: A notable methodological difference in this report is the double-weighting of socioeconomic diversity at 13.33 points for household income diversity. This category alone contains six subcategories, providing a deeper analysis of household income distribution. The report emphasizes granular details and extensive analysis rather than simply focusing on the number of cities, variables, or subfactors considered. Was there a specific reason for this methodological shift?
Lupo: Somewhat. We still considered the usual factors but aimed beyond basic percentage-based measures. While ethnoracial diversity remains central to our analysis, we also emphasized linguistic diversity— the number of languages spoken per household in each state. This aligns closely with ethnic diversity trends, as Spanish is increasingly spoken at home, along with various Asian and Pacific Islander languages. These linguistic shifts reflect deeper demographic transformations across the United States.
Let’s touch on language diversity again and return to birthplace diversity, which is a major emphasis in our study. One of the key findings is that among the top-ranked cities, there is an almost even racial distribution, with each of the four primary ethnic groups—White, Black, Hispanic, and Asian/Pacific Islander—making up approximately 25% of the population.
If current trends continue, we project that by 2045, no single ethnic group will be a majority in the United States for the first time. However, this projection depends on immigration policies, which remain a highly contested issue in the U.S. With a new administration, policies could shift rapidly, meaning these projections may look very different by next year. If the current trajectory holds, though, the U.S. will become a truly multiethnic nation with no dominant racial majority.
Jacobsen: Do you believe this shift will have a greater impact on economic factors or social stability?
Lupo: Economically, I don’t think the impact will be as significant as some reports suggest. However, socially, I do think we will see major shifts. Communities have grown accustomed to steady cultural diversification, and if that trend slows or reverses, it could create social adjustments, possibly even displacement in some areas. If immigration patterns change dramatically, the social consequences will be more pronounced than the economic ones.
Jacobsen: That makes sense. Well, my friend, that’s all my questions for today.
Lupo: All right, Scott, I appreciate it.
Jacobsen: As always, thanks, Chip.
Lupo: I appreciate it. Bye.
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