Ten States Where Income Inequality Has Soared

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5. Arizona
> Share of growth captured by the 1%: 84.2%
> Real income growth 1979-2007: 17.0% (8th least)
> Income growth, bottom 99%: 3.0% (6th least)
> Income growth, top 1%: 157.8% (23rd least)

In 1979, the top 1% of earners accounted for just 9.1% of all income in Arizona. By 2007, the top 1% accounted for a full one-fifth of all income. Incomes of the top 1% of earners soared by more than 157% during that time, while incomes of the bottom 99% rose by just 3%. Since then, matters have not changed. Between 2009 and 2011, the average real income of the bottom 99% of earners fell by 1%, even as incomes of the top 99% rose by nearly 6%. While real income growth in the state lagged the national rate over both periods, the state’s economy was among the fastest growing in the U.S. between 1979 and 2007. One possible explanation for why GDP grew as incomes remained flat is that Arizona added more than 1 million non-farm jobs between 1990 and 2007.

4. Michigan
> Share of growth captured by the 1%: 101.7%
> Real income growth 1979-2007: 8.9% (3rd least)
> Income growth, bottom 99%: -0.2% (4th least)
> Income growth, top 1%: 100.0% (4th least)

Despite some good economic news for Michigan since the 2008 financial crisis, the state’s average real income growth between 1979 and 2007, as well as from 2009 to 2011, still trailed the nation as a whole. The wealthiest 1% enjoyed a 100% increase in average income between 1979 and 2007, while the average income of the bottom 99% dropped by 0.2% during those years. The income growth gap has remained wide in the years following the 2008 economic crisis. Between 2009 and 2011, the average income increase of the top 1% was 12.8%, while the average income increase of the bottom 99% was 0.2%. The good news for the bottom 99% of Michigan workers is that the U.S. auto industry has bounced back in terms of job creation and car sales.

3. Wyoming
> Share of growth captured by the 1%: 102.3%
> Real income growth 1979-2007: 31.5% (23rd least)
> Income growth, bottom 99%: -0.8% (3rd least)
> Income growth, top 1%: 354.3% (4th highest)

While Wyoming’s wealthiest residents have enjoyed the benefits of the state’s immense resources, the average income of the bottom 99% of workers in the state slid by 0.8% between 1979 and 2007. The state’s overall real income grew by 31.5% in the same period, however, due entirely to a 354% increase in the average income of the top-earning 1%. The income gap continued to grow between 2009 and 2011 as well. Average income of the bottom 99% of workers rose 6.9%, and that of the top 1% increased by 13.6%. Roughly 12.7% of the state’s labor force worked in the agriculture and mining industries in 2012, the most in the nation.

2. Nevada
> Share of growth captured by the top 1%: 218.5%
> Real income growth 1979-2007: 8.6% (2nd least)
> Income growth, bottom 99%: -11.6% (2nd least)
> Income growth, top 1%: 164.0% (24th highest)

The average income in Nevada rose just 8.6% between 1979 and 2007, among the lowest increases in the nation. However, most of the state’s residents actually lost money during that time, as average real income dropped by 11.6% for the bottom 99% of earners. For the remaining top percentile of earners, average incomes rose by 164% between 1979 and 2007. As of 2007, the top 1% accounted for 28% of state residents’ total income, the fifth highest percentage in the United States. The gap between the top percentile and other earners has further increased in recent years. Incomes for the top 1% rose by 4% between 2009 and 2011, while incomes for the bottom 99% of earners slipped by a nation-leading 6.7%. Nevada has struggled with high unemployment in recent years, including an average unemployment rate of 11.1% in 2012, the highest in the nation that year.

1. Alaska
> Share of growth captured by the top 1%: All
> Real income growth 1979-2007: -10.3% (the least)
> Income growth, bottom 99%: -17.5% (the least)
> Income growth, top 1%: 118.6% (10th least)

The average real income for all workers in Alaska dropped by more than 10% between 1979 and 2007, making Alaska the only state where total income declined during that period. Despite this, the average income of Alaska’s top 1% of earners more than doubled, and incomes among the wealthy represented the only income growth in the state. Alaska’s average income per worker in the bottom 99% was $58,482 in 2011, second highest in the nation, trailing only Maryland. Due to the state’s high corporate tax collections, as well as no state sales or income taxes, Alaska has among the lowest tax burdens in the country. Alaska also benefits from its petroleum profits tax, which is paid by companies based on the value of the oil and natural gas they produce.

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