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

NEW MEXICO

Inequality has been increasing in New Mexico for nearly two decades. This can be observed by ranking all New Mexico 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 14 times as large as the poorest 20 percent of families.

• The richest 20 percent of families with children had average incomes 3.1 times as large as the middle 20 percent of families.

The Long-Term Trend

Since the late 1970s, income inequality has increased in New Mexico. 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 50 percent since the 1970s. The gap between the rich and poor increased faster than in all but 20 states.

• The average income of the poorest fifth of families fell by $2,430 between the late 1970s and the mid-1990s, from $8,840 to $6,410.

• The average income of the middle fifth of families fell by $4,680 between the late 1970s and the mid-1990s, from $34,240 to $29,560.

• The average income of the richest fifth of families increased by $7,350 between the late 1970s and the mid-1990s, from $84,390 to $91,740.⁽¹⁾

The Recent Trend

Over the past decade, income inequality increased in New Mexico. While the average incomes of the richest fifth of families with children have approximately held steady since the mid-1980s, the average incomes of the poor and middle class families have declined.

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 eight states. The gap between the rich and the middle class also increased.

• The average income of the poorest fifth of families decreased by $1,700, between the mid-1980s and the mid-1990s, from $8,110 to $6,410.

• The average income of the middle fifth of families decreased by $1,240 between the mid-1980s and the mid-1990s, from $30,790 to $29,560.

• The average income of the richest fifth of families increased by $5,630, between the mid-1980s and the mid-1990s, from $86,110 to $91,740.¹

End Notes

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

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