The term “top 1%” is used a lot these days to illustrate the widening chasm between the richest Americans and nearly everyone else in the country. The data is measured either by comparing annual income from wages, rent collection, stock dividends, and capital gains, or by the total value of wealth, which includes home equity, stock portfolios, and other possessions, like second homes, trust funds, and yachts.
Either way you look at it, it’s clear that the richest Americans have for years been pulling away from the rest of the population. To a great extent, today’s wealth inequality can be traced to the robust growth in the value of stocks and real estate since the Great Recession officially ended in June 2009. Income inequality statistics, however, reveal the uneven distribution of the compensation people earn for the work they perform. Here’s a look at states where income inequality has gotten worse since 2010.
According to a widely cited and uncontested analysis of U.S. income data by UC Berkeley economist Emmanuel Saez, the average annual income for a family in the top 1% was nearly $1.46 million in 2018, or almost 40 times greater than that for families in the bottom 90%, whose incomes averaged $36,397. In 2018, the top 1% took in about 22% of all income, up from 15% in 1988, while poor or low-income households (about 40% of the total) fell from 12% to 10% over the same 30-year period.
According to the Economic Policy Institute, the threshold to be in the top 1% of income earners was $737,697 in 2018, but that’s a national average. This threshold varies by state, which means a wealthy household can be comfortably in the top 1% of income earners in Alabama or Kentucky, but not make the cut in wealthier states, like Connecticut and New York. These are the states with the widest gaps between rich and poor.