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News from EPI › The top 1 percent took home the majority of income growth since the Great Recession in 24 states: New York, Connecticut, and Wyoming top the list of most unequal states

Press Releases • June 16, 2016

In Income inequality in the U.S. by state, metropolitan area, and county, a new paper published by EPI for the Economic Analysis and Research Network (EARN), by Mark Price, an economist at the Keystone Research Center in Harrisburg, Penn. and Estelle Sommeiller, a socio-economist at the Institute for Research in Economic and Social Sciences in Greater Paris, France, shows that the top 1 percent of income earners captured the majority of income growth between the end of the Great Recession in 2009 and 2013 in 24 states—with the top 1 percent taking home all income growth in 15 states.

In their latest examination of income inequality throughout the country, Price and Sommeiller examine the incomes of the top 1 percent and the bottom 99 percent by state and, for the first time, by metropolitan area and county. The authors detail the average incomes of the top 1 percent, the income required to be in the top 1 percent, and the gap between the top 1 percent and the bottom 99 percent in every county and state as well as in 916 metropolitan areas.

“Rising inequality is not a new phenomenon, and it’s not confined to large urban areas or financial centers,” said Price. “It’s a persistent problem throughout the country—in big cities and small towns, in all 50 states. In the face of this national problem, we need national policy solutions to jumpstart wage growth for the vast majority.”

Key findings include:

  • In 2013 the top 1 percent of families nationally made 25.3 times as much as the bottom 99 percent.
  • Nine states had gaps between the top 1 percent and the bottom 99 percent that were wider than the overall national gap. In the most unequal states—New York, Connecticut, and Wyoming—the top 1 percent had average incomes more than 40 times those of the bottom 99 percent.
  • Between 2009 and 2013 the incomes of the top 1 percent declined in only five states (Alabama, Alaska, Montana, New Mexico, and West Virginia).
  • To be in the top 1 percent nationally, a family needed an income of $389,436 in 2013. Twelve states, 109 metro areas, and 339 counties had thresholds above that level.
  • Jackson, WY-ID, Bridgeport-Stamford-Norwalk, CT, and Naples-Immokalee-Marco Island, FL topped the list of most unequal metro areas, while Teton County, WY, La Salle County, TX, Shackelford County, TX, and New York County, NY, were the most unequal counties.

“The degree of income inequality differs from one city to another, but the underlying forces are clear. Inequality isn’t a regional issue. It’s the result of intentional policy decisions to shift bargaining power away from working people and towards the top 1 percent,” said Sommeiller. “To reverse this, we should enact policies that boost worker’s ability to bargain for higher wages, rein in the salaries of CEOs and the financial sector, and prioritize full employment.”

The share of income earned by the top 1 percent reached a post–Great Recession peak in 2012, thanks in part to tax planning that shifted to 2012 taxable income that would otherwise have been reported in 2013. As a result, the average income of the top 1 percent fell across every region 14 percent between 2012 and 2013. Preliminary data available at the national level indicate this pause in top income growth was brief, as top incomes grew again in 2014.