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

NORTH CAROLINA

Inequality has been increasing in North Carolina for nearly two decades. This can be observed by ranking all North Carolina 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 11 times as large as the poorest 20 percent of families.

• The richest 20 percent of families with children had average incomes 2.7 times as large as the middle 20 percent of families.

The Long-Term Trend

Since the late 1970s, income inequality has increased in North Carolina. 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 69 percent since the 1970s. The gap between the rich and poor increased faster than in all but 11 states. The gap between the rich and the middle class increased faster than in all but 18 states.

• The average income of the poorest fifth of families fell by $2,180 between the late 1970s and the mid-1990s, from $11,540 to $9,360.

• The average income of the middle fifth of families increased by $2,850 between the late 1970s and the mid-1990s, from $37,210 to $40,060.

• The average income of the richest fifth of families increased by $28,980 between the late 1970s and the mid-1990s, from $78,510 to $107,490.

The Recent Trend

Over the past decade, income inequality increased in North Carolina. The average incomes of poor families with children have remained about the same since the mid-1980s, while the average incomes of the richest fifth of families increased faster than the incomes of middle class families.

The gap between the top fifth of families and the bottom fifth of families increased between the mid-1980s and the mid-1990s faster than in all but 16 states. The gap between the rich and the middle class also increased.

• The average income of the poorest fifth of families decreased by $330 between the mid-1980s and the mid-1990s, from $9,700 to $9,360.⁽¹⁾

• The average income of the middle fifth of families increased by $2,810 between the mid-1980s and the mid-1990s, from $37,250 to $40,060.

• The average income of the richest fifth of families increased by $18,660 between the mid-1980s and the mid-1990s, from $88,830 to $107,490.

End Notes

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

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