Report Reveals The Unequal States Of America

Isaiah J. Poole

The top 1 percent captured all of the income growth between 2009 and 2011 in 26 out of the 50 states and the District of Columbia, the Economic Policy Institute found in a report released today.

The report is a detailed look at the geography of income inequality. The broad contours are familiar: University of California at Berkeley economist Emmanuel Saez has estimated that the top 1 percent received 95 percent of all of the income gains between 2009 and 2012. So it is not surprising that state-by-state profiles would show similar lopsided gains concentrated at the top. But they are still sobering.

The full EPI report looks at nearly a century of data, but the comparisons from 2009 are important because they mark what has happened to income growth since the end of the Great Recession.

In addition to the states where the bottom 99 percent received none of the income growth since the end of the recession, in another six states the top 1 percent received between 60 percent and 91 percent of the income growth. In five states – New Mexico, Montana, Hawaii, Louisiana and Alaska – the incomes of the top 1 percent declined while that of the bottom 99 percent grew. In three states – Delaware, Utah, and Mississippi – both the 1 percent and the 99 percent saw income declines.

According to the report, “the 10 states with the biggest jumps (at least 11.8 percentage points) in the top 1 percent share from 1979 to 2007 include four states with large financial services sectors (New York, Connecticut, New Jersey, and Illinois), three with large information technology sectors (Massachusetts, California, and Washington), one state with a large energy industry (Wyoming), one with a large gaming industry (Nevada), and Florida, a state in which many wealthy individuals retire.”

But the report’s conclusion stresses that the income inequality findings should not be dismissed as merely the artifacts of the rise of the financial and information technology sectors in certain regions of the country. Income inequality cuts across regions and industry sectors. “Policy choices and cultural forces have combined to put downward pressure on the wages and incomes of most Americans even as their productivity has risen,” the report concludes, and those same policy choices and cultural forces have pushed up the outsized earnings of a small group of elites.

“In the next decade, something must give. Either America must accept that the American Dream of widespread economic mobility is dead, or new policies must emerge that will begin to restore broadly shared prosperity,” the report concludes.

Find out where your state stands among the “Unequal States of America” through EPI’s income inequality website.

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