Special Report

The States Where the Rich Are Getting Richer

4. California
> Income growth, top 1% 2009-2012: 49.6%
> Income growth, bottom 99% 2009-2012: -3.0% (6th lowest)
> Avg. income top 1%: $1,598,161 (5th highest)
> Avg. income bottom 99%: $45,775 (21st highest)

The average income growth rate of the top 1% in the Golden State was 49.6%, almost 53 percentage points more than the growth rate of the state’s bottom 99%, whose incomes contracted by 3.0%. The state’s top 1% had an average income of $1.6 million in 2012, fifth highest in the country, while the average income of the bottom 1% was $45,775. The income of the top 1% was 34.9 times the income of the bottom 99%, the fifth highest gap in the country. California has the second highest concentration of information jobs — second only to Colorado. The concentration is largely due to the presence of Silicon Valley where some of the highest-paying jobs in the nation can be found. Dividend payments to Californians grew by nearly $300 billion from 2009 to 2012, by far the largest growth in the nation. As the most populous state in the country, California paid more in total wages in 2013 than any other state. Wage payouts increased by $404.1 billion from 2012 to 2013, the largest nominal increase.

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3. Texas
> Income growth, top 1% 2009-2012: 50.2%
> Income growth, bottom 99% 2009-2012: 1.7% (23rd lowest)
> Avg. income top 1%: $1,499,944 (8th highest)
> Avg. income bottom 99%: $46,102 (19th highest)

Average real income in Texas grew by 50.2% from 2009 to 2012, with 86.8% of that growth going to the top 1%. The average annual income of the top 1% was just under $1.5 million in 2012, while the average income of the bottom 99% was $46,102, a difference of $1.45 million, one of the largest such gaps. Texas had the third highest percentage of jobs in the high-paying construction sector, which may account for the high wages across the state. The BLS reported strong growth in the construction sector from 2010, which may partly explain Texas’ wage grow rate of 16.8% from 2009 through 2013. Texas also had the second fastest nominal wage growth in the nation for that period, due in large part to its status as the second most populous state in the country. Aggregate dividends paid to Texans rose by $169.8 billion from 2009 to 2012, the second highest increase in the country. Much of this growth likely went to the top 1%, who rely on unearned income far more than people in lower income brackets.

2. North Dakota
> Income growth, top 1% 2009-2012: 103.6%
> Income growth, bottom 99% 2009-2012: 21.2% (the highest)
> Avg. income top 1%: $1,566,183 (6th highest)
> Avg. income bottom 99%: $59,931 (3rd highest)

The average income of North Dakota’s top 1% grew by 103.6% during 2009-12, second most in the country. By 2012, the average income of the state’s top 1% of earners was $1,556,183, sixth highest in the country. This was also just over $1.5 million more than the average income of the state’s bottom 99%. Overall average income in North Dakota increased by 32.4%, the largest growth rate in the country from 2009-12. The mining and construction sectors have grown dramatically in North Dakota since 2009 and largely account for the spike in income growth. Compensation for labor was a huge driver. However, dividends, which are mostly enjoyed by top earners, grew by $9.4 billion from 2009 to 2012, higher than the wage and salary increase of $8.13 billion.

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1. Wyoming
> Income growth, top 1% 2009-2012: 283.60%
> Income growth, bottom 99% 2009-2012: n/a
> Avg. income top 1%: $5,078,696 (the highest)
> Avg. income bottom 99%: n/a

The average annual income of the top 1% in Wyoming was the nation’s highest at $5.1 million in 2012, driven in large part by unearned income — dividends rather than wages. Nearly half of all personal income growth from 2009 through 2012 was from dividend payments. This was the largest share in the country, perhaps not surprising for a state that counts members of the Walton family, owners of Wal-Mart, among its residents. Inequality widened dramatically in Wyoming during 2009-12, as the income of the top 1% grew by a staggering 283.6%. This was almost certainly due to the fortunes of just a handful of individuals. According to a national magazine ranking, there are six billionaires in Wyoming. In a state with such a small population, these individuals have a substantial impact on income figures.