Pulling Apart:
A State-by-State Analysis of Income Trends

UNITED STATES OVERVIEW

Inequality has been increasing in the United States for nearly two decades. This can be observed by ranking all United States families with children according to their income level, dividing them into five groups (or fifths) of equal size, and calculating the average income of each fifth of families. This analysis shows by the mid-1990s:

• The richest 20 percent of families with children had average incomes over 13 times as large as the poorest 20 percent of families.

• The richest 20 percent of families with children had average incomes over 2.9 times as large as the middle 20 percent of families.

The Long-Term Trend

Since the late 1970s, income inequality has increased in the United States. The long-term economic growth of the past two decades was not shared evenly among the poor, the rich, and the middle class. Instead, the top fifth of families with children fared substantially better than other income groups.

The gap between the top fifth of families and the bottom fifth of families grew by 65 percent since the 1970s.

• The average income of the poorest fifth of families fell by $2,500 between the late 1970s and the mid-1990s, from $11,760 to $9,250.

• The average income of the middle fifth of families fell by $710 between the late 1970s and the mid-1990s, from $41,430 to $40,720.

• The average income of the richest fifth of families increased by $26,770 between the late 1970s and the mid-1990s, from $90,730 to $117,500.

The Recent Trend

Over the past decade, income has increased in the United States. While the average incomes of poor and middle class families with children have stayed about the same or decreased since the mid-1980s, the average income of the richest fifth of families has increased.

The gap between the top fifth of families and the bottom fifth of families increased between the mid-1980s and the mid-1990s. The gap between the rich and the middle class also increased.

• The average income of the poorest fifth of families decreased by $270 between the mid-1980s and the mid-1990s, from $9,530 to $9,250.

• The average income of the middle fifth of families decreased by $390 between the mid-1980s and the mid-1990s, from $41,110 to $40,720.

• The average income of the richest fifth of families increased by $16,460 between the mid-1980s and the mid-1990s, from $101,040 to $117,500.

• Press Release
• State contacts
• I. Executive Summary and Introduction
• II. The Long-Term Trend: The Late 1970s to the Mid-1990s
• III. The Recent Trend: The Mid-1980s to the Mid-1990s
• IV. States Can Choose a Different Course
• V. Conclusion
• Methodological Appendix