States with the Widest Gap Between the Rich and Poor

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5. California
> Gini coefficient: 0.4812
> Median household income: $57,287 (10th highest)
> Households earning $200,000+: 7.8% (7th highest)
> Population living below poverty line: 16.6% (18th highest)

Nearly 8% of households in California earned at least $200,000 in 2011, more than all states but six. But while California has its sliver of Hollywood bigwigs and self-made billionaires striking it rich in Silicon Valley, the state also has a fair share of residents on the lower-end of the income spectrum. The state’s 16.6% poverty rate was higher than the national poverty rate of 15.9%. Despite this, California in some regards did better than its peers. For instance, the 8.3% of Californians on food stamps in 2011 was a lower percentage than all but four states. Furthermore, the 4.7% of households earning less than $10,000 in 2011, while far from being the lowest percentage among all states, was better than the 5.1% across the country.

Also Read: America’s Best (and Worst) Educated States

4. New Mexico
> Gini coefficient: 0.4821
> Median household income: $41,963 (8th lowest)
> Households earning $200,000+: 3.4% (tied for 15th lowest)
> Population living below poverty line: 21.5% (2nd highest)

Between 2010 and 2011, New Mexico’s Gini coefficient rose from 0.464 — then 15th in the nation — to 0.482, one of the highest in the country. During this time, many New Mexicans brought home less money, as median income fell from $43,326 in 2010 to $41,963 in 2011. Also, 7.2% of the state’s households earned less than $10,000 last year — one of the highest rates in the nation. Poverty is a long-running problem in New Mexico. The percentage of households living below the poverty line rose from 18.1% in 2010 to 21.5% last year — the second-highest poverty rate in the nation. Despite the state’s high poverty rate, one of its three congressman, Steve Pearce, received a “D-” from the Institute for Policy Studies on promoting income equality.

3. Louisiana
> Gini coefficient: 0.4836
> Median household income: $41,734 (7th lowest)
> Households earning $200,000+: 3.5% (17th lowest)
> Population living below poverty line: 20.4% (3rd highest)

The percentage of households below the poverty line shot up to 20.4% in 2011, the third-highest percentage in the country, from 18.7% in 2010, the sixth-highest rate that year. Households earning less than $10,000 grew to 7.7% in 2011, the second-highest in the country. In 2010, it was 6.2% — sixth-highest at the time. This happened even as the unemployment rate in Louisiana dropped to 5.6% in 2011 from 6.2% in 2010, indicating job growth primarily at the lower-end of the wage spectrum. East Carroll Parish, located in the northeast corner of the state, had the highest income inequality of all counties in the U.S., according to a Feb. 2012 report from the U.S. Census Bureau looking at data from 2006-2010.

2. Connecticut
> Gini coefficient: 0.4859
> Median household income: $65,753 (4th highest)
> Households earning $200,000+: 11.2% (the highest)
> Population living below poverty line: 10.9% (5th lowest)

At 11.2%, Connecticut has the highest percentage of household making $200,000 or more. On the other side of the income gap, the percentage of the population living below the poverty line rose from 10.1% in 2010 to 10.9% in 2011. Many residents also lost their jobs. The state’s unemployment rate in Sept. 2012 was 8.9%, up from 8.6% the year before. During that time, the national unemployment rate fell from 9% to 7.8%. In Connecticut’s Fairfield County, the Gini coefficient was 0.535 — higher than any state. The county is home to several hedge funds and country clubs, but also to government housing and food pantries.

1. New York
> Gini coefficient: 0.5033
> Median household income: $55,246 (16th highest)
> Households earning $200,000+: 8.0% (6th highest)
> Population living below poverty line: 16.0% (21st highest)

New York, which had the highest income inequality in 2010, had an even higher inequality in 2011. The 16% of the population living below the poverty line in 2011 increased from 14.9% in 2010 to 16% in 2011. The median income declined by $466 between 2010 and 2011. Meanwhile, the percentage of households raking in at least $200,000 was 8.0% in 2011, virtually unchanged from 2010 and well above the national rate of 5.6%. According to a recent study conducted by Martin Prosperity Institute, income inequality in the New York City metro area is roughly equivalent to that of Swaziland, a poor sub-Saharan country that has the lowest life expectancy in the world.

-Michael B. Sauter, Alexander E. M. Hess, Samuel Weigley

Also Read: America’s Richest States

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