List_of_U.S._states_and_territories_by_income_inequality

List of U.S. states and territories by income inequality

List of U.S. states and territories by income inequality

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The United States has the greatest income disparity among developed nations.[1] However, the inequality indicators vary considerably from state to state. States that have a high concentration of skilled jobs, implement regressive tax policies, or have weaker worker protections in general tend to have greater income inequalities. As of 2019, the highest inequality may be observed in Puerto Rico, around the New York City and Washington, D.C. metropolitan areas, across much of the Southern United States, in California, and in Massachusetts.

Reasons for differences in income inequality among the states

In the framework of American federalism, states generally have wide latitude to enact policies within their borders, including state taxation and labor laws. Among the factors that may increase inequality in a state are regressive state tax policies[2] (taxation has played a growing role in diminishing inequality since the 1980s),[3] tax incentives for large companies,[4] corruption,[5] reduced labor-union membership,[6] right-to-work laws,[7] lower minimum wages,[8] poorer healthcare,[9] and increased welfare spending on the poor.[7] Additionally, since the 1970s, income disparities have disproportionately increased in metropolitan areas, because of the concentration of high-skilled jobs there.[10][11] For example, even though New York is the state with the highest inequality, Upstate New York has much less income inequality than Downstate New York, because the economy of New York City (Gini index 0.5469)[12] relies greatly on high-salary earners.[11] States with better financial development tend to be more unequal than those with worse financial opportunities; but the trends go in the opposite directions for high-income and low-income states, the former having more equality up to a certain level of development, beyond which the inequality rises non-linearly.[13] The influx of foreign direct investment lessens the disparity at the federal level, but it does not necessarily do so for individual states.[14]

Gini coefficient

Map of Gini coefficients by US state, 2019

The Gini coefficient is a measure of inequality of incomes (or sometimes wealth) across individuals. A score of "0" on the Gini coefficient represents complete equality, i.e. every person has the same income. A score of 1 would represent the case in which one person would have all the income and others would have none. Therefore, a lower Gini score is roughly associated with a more equal distribution of income and vice versa. In 2018 U.S. income inequality as measured by the Gini index was close to the highest recorded values ever.[15][16]

The information was tabulated in 2019 from data from the American Community Survey (ACS) conducted by the US Census Bureau. The South, the tri-state area around New York City and California tend to have more income inequality, while the Upper Midwest, the Northwest and Northern New England are relatively more equal. According to the American Community Survey's (ACS) 2019 estimate, Utah is the most equal state when it comes to income, while New York is the most unequal by this measure, with the Gini indices, before taxes and transfer,[17] of 0.4268 and 0.5149, respectively.[18]

The uncertainties are not shown in the table. The ACS gives a much higher estimate of the Gini coefficient for the United States than other sources.[15][16][19]

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Shares of income by percentiles

States and territories are sorted by the share of the lowest quintile in aggregate household income, i.e. the share of household income of 20% of the poorest households in the total household income. Due to different methodologies by which the United States Census Bureau and the EPI have calculated their results, the data should not be compared.

By households

Data for quintiles and top 5% come from the American Community Survey estimates in 2019.[21]

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By families

The data presented in the table comes from the Economic Policy Institute (EPI), a think tank, relying on data from 2015 tax returns.[22][23] The table is sorted according to mean income of families (leftmost column).

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See also

Notes

  1. State, district or territory
  2. State or district

References

  1. [1]
    United Press International (UPI), 22 Jun. 2018, "U.N. Report: With 40M in Poverty, U.S. Most Unequal Developed Nation"
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    Hatch, Megan E.; Rigby, Elizabeth. "How States Can Fight Growing Economic Inequality". Scholars Strategy Network. Retrieved 2022-02-09.
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    Cooper, Daniel H.; Lutz, Byron F.; Palumbo, Michael G. (2015-12-01). "The Role of Taxes in Mitigating Income Inequality Across the U.S. States". National Tax Journal. 68 (4): 943–974. doi:10.17310/ntj.2015.4.03. ISSN 0028-0283. S2CID 157588016.
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    Jansa, Joshua. "Inequality is higher in some states like New York and Louisiana because of corporate welfare". The Conversation. Retrieved 2022-02-09.
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    Apergis, Nicholas; Dincer, Oguzhan C.; Payne, James E. (2010-10-01). "The relationship between corruption and income inequality in U.S. states: evidence from a panel cointegration and error correction model". Public Choice. 145 (1): 125–135. doi:10.1007/s11127-009-9557-1. ISSN 1573-7101. S2CID 153354176.
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    Bucci, Laura C. (June 2018). "Organized Labor's Check on Rising Economic Inequality in the U.S. States". State Politics & Policy Quarterly. 18 (2): 148–173. doi:10.1177/1532440018760198. ISSN 1532-4400. S2CID 158728596.
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    Hatch, Megan E.; Rigby, Elizabeth (2015). "Laboratories of (In)equality? Redistributive Policy and Income Inequality in the American States". Policy Studies Journal. 43 (2): 163–187. doi:10.1111/psj.12094. ISSN 1541-0072.
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    Volscho, Thomas W. (2005-01-01). "Minimum Wages and Income Inequality in the American States, 1960–2000" (PDF). Research in Social Stratification and Mobility. 23: 343–368. doi:10.1016/S0276-5624(05)23011-1. ISSN 0276-5624. Archived from the original (PDF) on 10 August 2017.
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    Shi, Leiyu; Macinko, James; Starfield, Barbara; Wulu, John; Regan, Jerri; Politzer, Robert (2003-09-01). "The Relationship Between Primary Care, Income Inequality, and Mortality in US States, 1980–1995". The Journal of the American Board of Family Practice. 16 (5): 412–422. doi:10.3122/jabfm.16.5.412. ISSN 1557-2625. PMID 14645332. S2CID 33284246.
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    Morrill, Richard (2000-03-01). "Geographic variation in change in income inequality among US states, 1970–1990". The Annals of Regional Science. 34 (1): 109–130. doi:10.1007/s001680050129. ISSN 1432-0592. S2CID 153673682.
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    "Why Are Some Places So Much More Unequal Than Others? - FEDERAL RESERVE BANK of NEW YORK". www.newyorkfed.org. Retrieved 2022-02-09.
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    Bach, Trevor (2020-09-21). "The 10 U.S. Cities With the Largest Income Inequality Gaps". U.S. News & World Report.
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    Bittencourt, Manoel; Chang, Shinhye; Gupta, Rangan; Miller, Stephen M. (2019-11-01). "Does financial development affect income inequality in the U.S. States?". Journal of Policy Modeling. 41 (6): 1043–1056. doi:10.1016/j.jpolmod.2019.07.008. hdl:2263/73542. ISSN 0161-8938. S2CID 158772280.
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    Chintrakarn, Pandej; Herzer, Dierk; Nunnenkamp, Peter (2012). "Fdi and Income Inequality: Evidence from a Panel of U.s. States". Economic Inquiry. 50 (3): 788–801. doi:10.1111/j.1465-7295.2011.00384.x. hdl:10419/30062. ISSN 1465-7295. S2CID 14076863.
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    "The Distribution of Household Income, 2018 | Congressional Budget Office". www.cbo.gov. Retrieved 2022-02-08.
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    World Bank (1974-01-01). "GINI Index for the United States". FRED, Federal Reserve Bank of St. Louis. Retrieved 2022-02-08.
  17. [17]
    OECD (2021). "Income redistribution". Government at a Glance. doi:10.1787/1c258f55-en. ISBN 9789264909694. S2CID 242842694. Retrieved 16 May 2022.
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    "B19083: Gini index of income inequality (1-year estimate)". United States Census Bureau. Retrieved 2022-02-08.
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    "Income inequality – Gini Index". Our World in Data. Retrieved 2022-02-08.
  20. [20]
    "B19083: Gini index of income inequality (5-year estimate)". United States Census Bureau. Retrieved 2022-02-08.
  21. [21]
    "B19082: Shares of aggregate household income by quintiles". data.census.gov. Retrieved 2022-02-09.
  22. [22]
    Sommeiller, Estelle; Price, Mark (2018-07-19). "The new gilded age: Income inequality in the U.S. by state, metropolitan area, and county". Economic Policy Institute.
  23. [23]
    "Data to EPI's report". Economic Policy Institute. 2018-06-07.
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