Surprise, Surprise: Income Inequality Is Getting Worse
The average annual income in 2015 of a household in the top 1% of U.S. earners was $1.32 million, more than 26-times the average of the bottom 99%, where the average was just over $50,000. In order even to qualify as a one-percenter, a U.S. household needed an annual income of $421,926.
The top 1% of households took home 22% of all U.S. income, a larger portion than at any time since 1928. In the most unequal states — New York, Florida and Connecticut — the top 1% earned more than 35 times the average of the other 99%. In the two-year period between a similar report in 2013 and the new report, the difference between incomes of the top 1% and the bottom 99% increased from 25.3 times to 26.3 times.
The data were reported Thursday in a new study from the Economic Policy Institute (EPI), “The New Gilded Age,” which includes data on income inequality in the United States by state, metropolitan area and county.
The most unequal metro area was Jackson, Wyoming, where a one-percenter earned 132 times the average of the other 99%. Teton County, Wyoming — where Jackson is located — was the most unequal county: the top 1% (average income of $22.5 million) earn more than 142 times the average ($158,290).
There was a wide difference in the amount of income it took to be counted among the top 1%. Among the states, the income threshold for making it into the one-percent class was $700,800 in Connecticut, the highest threshold among the 50 states and the District of Columbia. The second-highest threshold was the District of Columbia ($598,155) followed by New Jersey ($588,575), Massachusetts ($582,774), New York ($550,174) and California ($514,694).
From the report:
Of all the income received by the national top 1 percent in 2015, half accrued to families in five states: California, New York, Texas, Florida, and Illinois. These five states accounted for about 40 percent of all income in the U.S. (the sum of all incomes including the bottom 99 percent and top 1 percent).
The EPI study’s authors, Estelle Sommeiller and Mark Price, observe:
The rise of top incomes relative to the bottom 99 percent represents a sharp reversal of the trend that prevailed in the mid-20th century. From 1928 to 1973, the share of income held by the top 1 percent declined in every state for which we have data. This earlier era was characterized by a rising minimum wage, low levels of unemployment after the 1930s, widespread collective bargaining in private industries (manufacturing, transportation, telecommunications, and construction), and a cultural, political, and legal environment that kept a lid on executive compensation in all sectors of the economy. We need policies that return the economy to full employment and keep it there, return bargaining power to U.S. workers, increase political participation by all citizens, and boost public investments in child care, education, housing, and health care. Such policies will help prevent the wealthiest few from appropriating more than their fair share of the nation’s expanding economic pie.
The full report contains details on 916 U.S. metropolitan areas and 3,061 U.S. counties and includes an interactive feature that allows you to zero in on a specific state, metro area or county.
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