Special Report

The States Where the Rich Are Getting Richer

10. South Dakota
> Income growth, top 1% 2009-2012: 42.7%
> Income growth, bottom 99% 2009-2012: 7.0% (2nd highest)
> Avg. income top 1%: $1,249,327 (14th highest)
> Avg. income bottom 99%: $50,089 (13th highest)

Incomes among South Dakota residents earning at least $404,010 in 2012 — the threshold of the state’s top 1% — grew by 42.7% from 2009 to 2012, the 10th fastest growth rate in the country. Everyone else’s income grew much slower, although the growth rate was still relatively high. The average income of the bottom 99% grew by 7.0%, the second fastest nationwide. Among all residents, personal income grew by 12.7% in that time, faster than in every state except for North Dakota. One component of income, wages, grew in South Dakota by 13.5% from 2009 to 2013, fourth fastest in the nation. Meanwhile, the dividend growth rate, another component of income, was the slowest in the country from 2009 to 2012. The 1% captured 53.4% of income growth in South Dakota during 2009-12, not a particularly large share relative to other states. Yet, the average income of the top 1%, which reached $1,249,327 in 2012, was one of the higher incomes and almost 25 times the average income of the bottom 99% of $50,089.

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9. Washington
> Income growth, top 1% 2009-2012: 45.0%
> Income growth, bottom 99% 2009-2012: -3.5% (4th lowest)
> Avg. income top 1%: $1,272,313 (13th highest)
> Avg. income bottom 99%: $47,517 (16th highest)

Average real income in Washington grew by 3.9% overall from 2009 to 2012, a faster pace than in all but 12 other states. The incomes of the top 1%, though, rose by 45% over the period, as they grabbed 175% of the state’s income growth, one of the largest shares nationwide. By contrast, the income of the bottom 99% contracted by 3.5%, nearly the worst decline. Within Washington’s top 1%, the average income of the state’s top 0.01% was $34,885,599, just over 27 times the average income of the entire top 1%. The dividends component of income represented 27.8% of total income growth in Washington from 2009 to 2012, 17th highest in the country. Another component, wages and salaries, grew 12% from 2009 to 2013, 10th largest improvement in the nation.

8. Massachusetts
> Income growth, top 1% 2009-2012: 46.8%
> Income growth, bottom 99% 2009-2012: -1.5% (10th lowest)
> Avg. income top 1%: $1,819,077 (4th highest)
> Avg. income bottom 99%: $52,758 (7th highest)

Massachusetts was one of 17 states where the total income of the bottom 99% of earners declined from 2009 to 2012. Nonetheless, the average annual income of the bottom 99% was $52,758 in 2012, seventh highest in the nation. The average total annual income of the top 1% in the state was $1.8 million in 2012, 34.5 times as much as the bottom 99%. This was the seventh highest gap in the nation. Dividend income in Massachusetts grew by $52.2 billion from 2009 to 2012, the eighth highest nominal growth in the country. With 40.3% of residents holding at least a bachelor’s degree, Massachusetts was the best educated state in the nation, which may have helped raise wages. The Bay State’s wages and salaries grew by 11.9% during 2009-12, the 12th largest growth rate in the nation.