> Middle income growth 2010-2014: -1.2%
> Fifth quintile income growth 2010-2014: 5.6% (14th highest)
> Fifth quintile share of income: 52.1% (3rd highest)
> Middle class household income: $62,428 (9th highest)
Unions can sometimes provide workers the organizational clout to prevent stagnant or decreasing wages. This was not the case in California, however. Despite 16.3% of workers belonging to a union, the sixth highest share in the country, incomes went up for the wealthiest Californians, while the poorest state residents got poorer. The middle 20% of households earned 1.2% less in 2014 compared to 2010. Incomes of the top 20% of households increased 5.6% during that time, by contrast.
6. South Carolina
> Middle income growth 2010-2014: -1.6%
> Fifth quintile income growth 2010-2014: 2.5% (21st lowest)
> Fifth quintile share of income: 50.3% (19th highest)
> Middle class household income: $45,236 (9th lowest)
High unemployment and low union membership in South Carolina may partially explain why the middle class is doing so poorly. From 2010 through 2014, middle class incomes fell 1.6%, more than double the national decline. Meanwhile, incomes among the top 20% of households grew by 2.5%, and household incomes of the top 5% grew faster still, increasing by 4.2%. Currently, the top 20% of earners control more than half of all income in the state, up from five years earlier. The state also levies a 6% sales tax, one of the highest nationwide. Many argue sales taxes are regressive, because poorer residents tend to spend a larger share of their income on taxed goods and services.
> Middle income growth 2010-2014: -1.8%
> Fifth quintile income growth 2010-2014: 3.8% (22nd highest)
> Fifth quintile share of income: 51.5% (7th highest)
> Middle class household income: $44,635 (6th lowest)
In 2010, middle class households in Tennessee earned 14.7% of all income in the state, a slightly higher share than that earned by middle class households nationwide. By 2014, that share had dropped to 14.2%, nearly twice the comparable decline across the country. In fact, the share of income controlled by the bottom 95% of Tennessee households contracted between 2010 and 2014, with all income gains going to the top 5%. Those gains contributed to a 7.1% increase in incomes among the top 5% of households, larger than the 6.1% growth for that cohort nationwide.
At 7.0%, Tennessee’s sales tax is among the highest in the country and may contribute to declining middle class incomes. A sales tax causes poorer residents — roughly 18.3% of Tennesseans live in poverty — to pay a larger share of their income in taxes compared to wealthier residents.
4. North Carolina
> Middle income growth 2010-2014: -1.8%
> Fifth quintile income growth 2010-2014: 3.3% (25th highest)
> Fifth quintile share of income: 51.0% (11th highest)
> Middle class household income: $46,677 (11th lowest)
North Carolina’s unemployment rate dropped 4.8 percentage points from 2010 to 6.1% in 2014, just below the national unemployment rate of 6.2% that year. Despite the improvement, however, income inequality has been getting worse in the state. The highest earning 20% of North Carolina households have an average income of more than $166,000, up 3.3% since 2010. Meanwhile, the income of a typical middle class North Carolina household fell by 1.8%, more than twice the comparable national income decline of 0.7%.
Union membership, which is often associated with middle class health, fell 1.3 percentage points to 1.9% in 2014, the lowest share in the country. Low union membership can often make it more difficult for workers to organize and advocate for themselves. North Carolina has resisted workers’ demands to raise the minimum wage above the federal minimum of $7.25 per hour, which many argue would help mitigate income inequality.
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