States Where the Middle Class Is Dying
4. Rhode Island
> Middle income growth 2009-2013: -5.6%
> Fifth quintile income growth 2009-2013: 2.5%
> Fifth quintile share of income: 50.7%
> Middle class household income: $56,432 (17th highest)
Middle class households in Rhode Island earned $56,432 in 2013, roughly $4,000 more than the national average, but still 5.6% less than they earned in 2009. Nationally, middle class incomes fell by 4.3%. By contrast, incomes of the top 20% of households rose by 2.5% between 2009 and 2013, far greater than the 0.5% growth among the top quintile nationwide. Like in many of the states on this list, income gains among the top 20% of households were disproportionately concentrated in the hands of the top 5%. In fact, the top 5% of households in Rhode Island received more than 96% of the income gains made by the top 20% of households between 2009 and 2013. Nationally, the top 5% only captured 74% of gains in the upper quintile over the same period.
> Middle income growth 2009-2013: -5.8%
> Fifth quintile income growth 2009-2013: 2.2%
> Fifth quintile share of income: 49.0%
> Middle class household income: $47,018 (14th lowest)
Like in several other states where the middle class is falling behind, income in Maine is relatively well distributed. However, the income gap in Maine is widening faster than in the nation as a whole. Average incomes among the wealthiest 20% of households in the state grew by 2.2% between 2009 and 2013, one of the faster growth rates and much faster than the comparable national figure of just 0.4%. Incomes among households in the third quintile, on the other hand, declined by 5.8% over that time. While more income is shifting faster to the state’s wealthiest residents, both Maine’s unemployment rate and its poverty rate were better than the respective national rates.
> Middle income growth 2009-2013: -5.9%
> Fifth quintile income growth 2009-2013: 2.8%
> Fifth quintile share of income: 48.8%
> Middle class household income: $53,020 (20th highest)
Incomes among the wealthiest 20% of Vermont households grew by nearly 3% between 2009 and 2013, the sixth largest increase nationwide. Over the same period, incomes among middle class households fell by 5.9%, one of the larger declines. As in most of the nation, income in Vermont is becoming even more concentrated among the wealthiest 5% of households. These households accounted for 21.1% of all income in Vermont in 2013, up considerably from 2009. The state’s wealthiest 5% of households also accounted for the vast majority — nearly 90% — of income gains among the wealthiest 20% of households between 2009 and 2013. Despite the worsening income gap, Vermont had an exceptionally low unemployment rate, at just 4.4% in 2013, versus the national rate of 7.4%.
> Middle income growth 2009-2013: -6.9%
> Fifth quintile income growth 2009-2013: 1.3%
> Fifth quintile share of income: 52.2%
> Middle class household income: $60,143 (10th highest)
California’s middle class household income shrank by 6.9% between 2009 and 2013 to $60,143, while incomes of the top 20% of households rose by 1.3% to $223,841 over that time. By 2013, the fifth quintile accounted for more than 52% of the state’s aggregate income, the third highest share in the country. Perhaps as a result, the state’s Gini coefficient increased by the second highest margin in the country, reflecting worsening income inequality. At 7.5%, California has the highest sales tax rate in the nation, which may further aggravate the purchasing power of middle- and low-income households. By definition, sales taxes are regressive — they disproportionately fall on the poor — because richer households tend to spend a smaller share of their income on consumption.