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

COLORADO

Inequality has been increasing in Colorado for nearly two decades. This can be observed by ranking all Colorado 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 9 times as large as the poorest 20 percent of families.

• The richest 20 percent of families with children had average incomes over 2.8 times as large as the middle 20 percent of families.

The Long-Term Trend

Since the late 1970s, income inequality has increased in Colorado. 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 31 percent since the 1970s.

• The average income of the poorest fifth of families fell by $830 between the late 1970s and the mid-1990s, from $15,150 to $14,330.⁽¹⁾

• The average income of the middle fifth of families increased by $1,630 between the late 1970s and the mid-1990s, from $46,170 to $47,800.

• The average income of the richest fifth of families increased by $25,510 between the late 1970s and the mid-1990s, from $105,860 to $131,370.

The Recent Trend

Over the past decade, income inequality has lessened somewhat in Colorado. While the average incomes of most families with children have increased since the mid-1980s, the average incomes of the poorest fifth of families have increased faster than the incomes of the richest families.

The gap between the top fifth of families and the bottom fifth of families lessened between the mid-1980s and the mid-1990s while the gap between the rich and the middle class remained about the same.

• The average income of the poorest fifth of families increased by $4,050 between the mid-1980s and the mid-1990s, from $10,280 to $14,330.

• The average income of the middle fifth of families increased by $5,150 between the mid-1980s and the mid-1990s, from $42,650 to $47,800.

• The average income of the richest fifth of families increased by $17,860 between the mid-1980s and the mid-1990s, from $113,510 to $131,370.

End Notes

1. The direction of this change was not statistically significant at the 95 percent level of confidence.

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