A new report finds that lopsided income growth is happening across the nation, but the gap between the top earners and everyone else is substantially wider in several states.
Average real income in the U.S. grew by more than a third between 1979 and 2007. That’s great news for Americans, right?
Unfortunately, no. Not all Americans, anyway.
A new report from the Economic Policy Institute shows that all 50 states have experienced lopsided income growth in recent decades. In fact, between 1979 and 2007, the top 1 percent of U.S. taxpayers took home nearly 54 percent of the total increase in income.
To put it another way, while the bottom 99 percent of earners experienced an 18.9 percent average growth in income, the income of the top 1 percent grew more than 10 times that much – a whopping 200.5 percent increase.
Here are some other key findings from the report:
- Between 1979 and 2007, the average income increased only for the top 1 percent in Alaska, Nevada, Michigan and Wyoming. The income of the bottom 99 percent actually dropped. In 15 other states, the top 1 percent captured 50 to 84 percent of all income growth.
- Incomes at all levels dropped during the Great Recession, but income inequality soared as the economy stabilized in 2009. “Only the top 1 percent gained as the economy recovered,” the report said.
- In 2011, New York and Connecticut had the biggest income gaps between the top 1 percent and the bottom 99 percent. The top earners in both states make 40 times the average income of the bottom 99 percent.
The report says the financial sector helps to fuel rising income inequality. Four of the 10 states with the steepest rise in incomes among the 1 percent between 1979 and 2007 had big financial sectors, including New York, Connecticut, New Jersey and Illinois.
However, in an interview with 24/7 Wall St., Mark Price, co-author of the study and a labor economist at the Keystone Research Center, said that income inequality is pervasive across the country.
“It’s not just a story of the financial markets in New York City,” Price said. “Over time, that [top] group in each state is accruing an increasingly larger share of the growth in income.”
24/7 Wall St. used the EPI report to help determine the 10 states where income inequality has increased the most. Here are the top five:
We’ve all heard the saying: The rich get richer and the poor get poorer.