A new Economic Policy Institute report highlights income inequality across states, metro areas, and counties.
Nationwide, the income gap could be more accurately described as a chasm: at $1,153, 293, the average yearly income of the top 1 percent of earners is 25.3 times that of the bottom 99 percent, who bring in $45,567.
But a new report from the Economic Policy Institute—the the first to include data at the metropolitan and county level—found that in nine states, 54 metro areas, and 165 counties, those numbers are even more disparate.
The problem is a national one. While New York is the most unequal state, the Jackson metropolitan area, which spans Wyoming and Idaho, shows the greatest disparity at that level: there, the top 1 percent in 2013 earned an average income 213 times that of the bottom 99 percent.
Nationwide, the share of all income held by the top 1 percent has been steadily rising over the past three decades. It now rests at 21.2 percent—a rate not seen since before the stock market crash of 1928. In the years following the Great Depression, income growth held relatively steady across all levels of pay, from the lowest wage-earner to top CEOs. When the principle of trickle-down economics gained momentum the late 1970s, growth disproportionately favored those already on top. Today, the U.S. is still feeling the consequences.
These findings have numerous implications. My colleague Tanvi Misra previously reported that in cities with higher inequality ratios, low-income families find it harder to afford housing, and often must pay up to 70 percent of their annual income in rent. The stratification of American wealth has already reduced purchasing power at the minimum-wage level; it may also reduce intergenerational income mobility. In a report from last year, the Urban Institute suggested that economic stratification is ingrained in neighborhoods. Maps show how low-income areas have spread since 1990, while wealth has remained concentrated. The new Economic Policy Institute report brings what that picture looks like today into sharper focus.
Take the Bridgeport-Stamford-Norwalk metro area. Connecticut is second only to New York in terms of statewide income inequality. In Connecticut, the top 1 percent makes, on average, 42.6 times more than the bottom 99 percent—a gap nearly double that of the national average. In Bridgeport-Stamford-Norwalk, the top 1 percent earn an average of $6,061,230—73.7 times that of the lower bracket. (Peruse state and regional interactives in greater detail here.)
Even with several states and cities moving toward a $15 minimum wage, it’s clear that the gap between the 1 percent and the rest of the country will not begin to close without a widespread reassessment of the policies that have pulled them apart. It will not be immediate, but the authors of the report see a clear path forward. They write:
We need policies that return the economy to full employment, return bargaining power to U.S. workers, and reinstate the cultural taboo on allowing CEOs and financial-sector executives at the commanding heights of the private economy to appropriate more than their fair share of the nation’s expanding economic pie.