Pulling
Apart:
A State-by-State Analysis of Income Trends - Chapter Three
by Kathryn Larin and Elizabeth McNichol
III. The Recent Trend: The Mid-1980s to the Mid-1990s
The economic recovery of the 1990s has been referred to as one of the most robust periods of economic growth in the postwar period in the United States. A close look at income growth over the past decade, however, reveals a sobering trend; the benefits of the strong economy of the past few years have done little to turn around the longer-term trend toward increasing income inequality. The gains low- and middle-income families have made during the recent recovery have not made up for the losses suffered by these families during the last recession.
Over the past decade, trends in the distribution of family income have varied by state. Figure 3 summarizes these trends by showing the number of states where average incomes rose and fell over the past decade. In 24 states home to two-thirds of the U.S. population the incomes of the poorest fifth of families with children fell over the last decade, after adjusting for inflation. The average incomes of families in the second and middle fifths of the income distribution fell in 26 states and 20 states respectively, including the most populous states. By contrast, the average incomes of families in the fourth quintile increased in nearly three-quarters of the states and, in every state except Wyoming, the average incomes of families with children in the richest 20 percent of the distribution grew.
Income Trends: Differences Between High- and Low-Income Families
Table 9 shows how the average incomes of the top and bottom fifths of families with children changed between the mid-1980s and the mid-1990s in every state. In 23 states, high-income families grew richer while poor families became poorer over the past decade. In Pennsylvania, for example, the average incomes of families in the bottom fifth of the distribution fell by $1,000, a decline of 9 percent. Over the same period, the richest fifth of families saw their incomes rise by more than $29,000, an increase of over 30 percent.
The average incomes of the bottom fifth of families rose over the decade in 26 states, but despite this growth the gap between high-income and low-income families widened in 13 of these states as the incomes of the richest families grew far faster than the incomes of the poor. In Idaho, for example, the average income of the poorest fifth of families with children increased from $9,569 to $10,721, which translates to a gain of $1,150 or 12 percent. The average income of the richest fifth of families with children, in contrast, increased from $80,004 to $104,725 a gain of $24,700 or 31 percent.
Income inequality was reduced in the remaining 13 states where the average incomes of the poorest families increased. The growth in the incomes of the bottom fifth of families was faster than for families in the top fifth, resulting in reduced inequality in these states.
For example, in Colorado, the average income of the poorest fifth of families increased from $10,281 in the mid-1980s to $14,326 by the mid-1990s, a 40 percent increase. By contrast, incomes of the richest 20 percent of Colorado's families with children increased from $113,507 in the mid-1980s to $131,368 in the mid-1990s, an increase of about 16 percent. Since the rate of growth in the incomes of the poorest fifth of families was more rapid than the income growth for the highest income families in the state, income inequality lessened between the mid-1980s and the mid-1990s. (Note, however, that the $4,050 average income gain for the bottom fifth was much smaller than the $17,850 gain for the top fifth. It also should be pointed out that the gains over the past decade did not reverse the longer-term trend. By the 1990s, the poorest fifth of families in Colorado had incomes some $825 below their late 1970s level, while the richest fifth of families had gained significantly in income since the 1970s.)
Table 9 Percentage Change in Average Incomes of Bottom and Top Fifths of Families with Children, '85-'87 to '94-'96 |
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State | Bottom Fifth | Top Fifth | |||||||
23 States Where the Bottom Fifth Grew Poorer and the Top Fifth Grew Richer | |||||||||
Arizona | ($4,316) | * | -37% | $2,597 | 3% | ||||
California | ($2,246) | * | -20% | $17,093 | * | 15% | |||
Connecticut | ($4,651) | * | -31% | $14,915 | * | 11% | |||
Florida | ($2,290) | * | -23% | $5,630 | 6% | ||||
Hawaii | ($195) | -2% | $4,311 | 4% | |||||
Kansas | ($1,864) | * | -15% | $14,360 | * | 15% | |||
Kentucky | ($911) | -11% | $17,749 | * | 22% | ||||
Maryland | ($243) | -2% | $31,917 | * | 28% | ||||
Massachusetts | ($980) | -8% | $17,266 | * | 15% | ||||
Mississippi | ($167) | -3% | $2,341 | 3% | |||||
New Hampshire | ($5,113) | * | -26% | $13,259 | * | 13% | |||
New Mexico | ($1,702) | * | -21% | $5,630 | 7% | ||||
New York | ($1,695) | * | -20% | $24,721 | * | 23% | |||
North Carolina | ($333) | -3% | $18,662 | * | 21% | ||||
Ohio | ($221) | -2% | $13,827 | * | 14% | ||||
Oklahoma | ($1,447) | * | -16% | $4,672 | 5% | ||||
Oregon | ($1,813) | * | -16% | $5,118 | 6% | ||||
Pennsylvania | ($1,009) | * | -9% | $29,161 | * | 31% | |||
Rhode Island | ($1,373) | * | -12% | $12,542 | * | 13% | |||
South Carolina | ($980) | -11% | $7,988 | 9% | |||||
Tennessee | ($44) | -1% | $23,054 | * | 27% | ||||
Texas | ($264) | -3% | $10,632 | * | 10% | ||||
Virginia | ($277) | -3% | $5,340 | 5% | |||||
13 States Where Incomes of the Top Fifth Grew Faster than Incomes of the Bottom Fifth | |||||||||
Delaware | $534 | 5% | $24,377 | * | 26% | ||||
Georgia | $1,585 | * | 19% | $25,994 | * | 27% | |||
Idaho | $1,152 | * | 12% | $24,721 | * | 31% | |||
Illinois | $1,625 | * | 19% | $21,651 | * | 21% | |||
Indiana | $851 | 8% | $28,403 | * | 34% | ||||
Maine | $772 | 7% | $8,159 | 10% | |||||
Michigan | $810 | 10% | $14,418 | * | 14% | ||||
Nebraska | $1,808 | * | 17% | $15,712 | * | 18% | |||
New Jersey | $960 | 7% | $20,348 | * | 17% | ||||
South Dakota | $1,291 | 16% | $15,459 | * | 20% | ||||
Utah | $2,192 | * | 16% | $19,112 | * | 21% | |||
West Virginia | $854 | 15% | $14,338 | * | 20% | ||||
Wisconsin | $1,232 | * | 10% | $11,039 | * | 12% | |||
1 State Where Incomes of the Bottom Fifth Fell Faster than the Incomes of the Top Fifth | |||||||||
Wyoming | ($404) | -3% | ($1,415) | * | -1% | ||||
13 States Where Incomes of the Bottom Fifth Grew Faster than Incomes of the Top Fifth | |||||||||
Alabama | $2,062 | * | 38% | $21,429 | * | 28% | |||
Alaska | $499 | 3% | $1,666 | 1% | |||||
Arkansas | $2,550 | * | 40% | $6,072 | 8% | ||||
Colorado | $4,045 | * | 39% | $17,861 | * | 16% | |||
Iowa | $3,487 | * | 36% | $26,428 | * | 34% | |||
Louisiana | $664 | 12% | $6,088 | 6% | |||||
Minnesota | $3,973 | * | 37% | $22,190 | * | 23% | |||
Missouri | $2,156 | * | 24% | $11,868 | * | 13% | |||
Montana | $964 | 12% | $7,707 | 9% | |||||
Nevada | $1,826 | * | 17% | $5,404 | 6% | ||||
North Dakota | $754 | 6% | $3,991 | 5% | |||||
Vermont | $780 | 6% | $4,887 | 5% | |||||
Washington | $1,249 | * | 14% | $8,371 | 8% | ||||
District of Columbia | ($1,107) | * | -17% | $36,061 | * | 32% | |||
Total U.S. | ($274) | * | -3% | $16,463 | * | 16% | |||
* Dollar changes marked with an asterisk are statistically significant. The direction of the change is known with 95 percent certainty. See the footnote to Table 1 for details. |
In the one remaining state, Wyoming, neither the average income of the top fifth of families nor the average income of the bottom fifth of families changed significantly.
Changes in Income Gaps
As discussed above, one way to assess income gaps is to compare average income of the top fifth of families to the average income of the bottom fifth of families. Table 10 shows the top-to-bottom ratio for each state in the mid-1980s compared to the ratio in the mid-1990s. As shown, between the mid-1980s and the mid-1990s, the gap in income between the poorest fifth of families with children and the richest fifth increased in 37 states.(1) In many states, the increase in inequality was substantial.
The last column of the table shows the percentage change in the ratio over the past decade. As shown, the gap between the richest 20 percent of families with children and the poorest 20 percent grew most in Arizona. In the mid-1980s, the top fifth of families with children in Arizona had incomes nine times as large as the bottom fifth. In just one decade, the top-to-bottom ratio had increased by some two-thirds. By the mid-1990s, the richest fifth of Arizona families had incomes over 14 times as large as the poorest fifth of families.
Map 2 shows how the gap in income between the top 20 percent of families and the bottom 20 percent of families has changed over the past decade. Those states where the income gap narrowed were concentrated primarily in the Northwest and Mountain Plains region, stretching from Washington state to Minnesota and down the middle of the country to Louisiana. Income gaps grew the most in the Southwest and the eastern regions of the country.
Table 10 Change in Ratio of Incomes of Top and Bottom Fifths of Families with Children, '85-'87 - '94-'96 |
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State | Rank | Top-to- Bottom ratio '85-'87 | Top-to- Bottom ratio '94-96 | Percent Change in Top/Bottom ratio | |
Arizona | 1 | 8.7 | 14.2 | 63.4% | * |
Connecticut | 2 | 8.8 | 14.2 | 60.9% | * |
New York | 3 | 12.7 | 19.5 | 53.7% | * |
New Hampshire | 4 | 5.3 | 8.1 | 53.3% | * |
California | 5 | 9.8 | 14.1 | 44.2% | * |
Pennsylvania | 6 | 8.3 | 11.8 | 43.1% | * |
Florida | 7 | 10.2 | 14.0 | 36.9% | * |
Kentucky | 8 | 9.8 | 13.5 | 36.9% | * |
New Mexico | 9 | 10.6 | 14.3 | 34.8% | * |
Kansas | 10 | 7.6 | 10.2 | 34.8% | * |
Maryland | 11 | 8.5 | 11.1 | 29.8% | * |
Rhode Island | 12 | 8.7 | 11.2 | 28.3% | * |
Tennessee | 13 | 10.2 | 13.1 | 28.2% | * |
Oklahoma | 14 | 10.0 | 12.6 | 25.5% | * |
Massachusetts | 15 | 9.9 | 12.4 | 25.5% | * |
Oregon | 16 | 8.1 | 10.1 | 25.4% | * |
North Carolina | 17 | 9.2 | 11.5 | 25.3% | * |
Indiana | 18 | 8.0 | 10.0 | 24.1% | * |
South Carolina | 19 | 9.7 | 11.9 | 22.1% | * |
Delaware | 20 | 8.0 | 9.7 | 20.7% | * |
Idaho | 21 | 8.4 | 9.8 | 16.8% | * |
Ohio | 22 | 10.3 | 12.0 | 16.8% | * |
Texas | 23 | 11.5 | 13.1 | 13.7% | * |
New Jersey | 24 | 9.3 | 10.1 | 8.7% | |
Virginia | 25 | 10.0 | 10.7 | 7.5% | |
Georgia | 26 | 11.7 | 12.4 | 6.5% | |
Mississippi | 27 | 12.2 | 12.9 | 5.7% | |
Hawaii | 28 | 8.6 | 9.1 | 5.4% | |
West Virginia | 29 | 12.6 | 13.1 | 4.5% | |
Michigan | 30 | 12.2 | 12.7 | 4.1% | |
Utah | 31 | 6.8 | 7.1 | 4.0% | |
South Dakota | 32 | 9.6 | 9.9 | 3.4% | |
Maine | 33 | 8.0 | 8.2 | 2.2% | |
Wyoming | 34 | 8.3 | 8.5 | 2.1% | |
Wisconsin | 35 | 7.6 | 7.7 | 1.6% | |
Illinois | 36 | 12.1 | 12.3 | 1.6% | |
Nebraska | 37 | 8.1 | 8.2 | 1.0% | |
Vermont | 38 | 7.5 | 7.5 | -1.0% | |
Iowa | 39 | 8.1 | 7.9 | -1.6% | |
North Dakota | 40 | 7.5 | 7.3 | -1.8% | |
Alaska | 41 | 8.9 | 8.7 | -2.1% | |
Montana | 42 | 10.2 | 9.9 | -2.3% | |
Louisiana | 43 | 16.7 | 15.9 | -4.7% | |
Washington | 44 | 11.7 | 11.1 | -5.3% | |
Alabama | 45 | 14.2 | 13.2 | -7.3% | |
Missouri | 46 | 10.0 | 9.1 | -8.7% | |
Nevada | 47 | 8.9 | 8.0 | -9.9% | |
Minnesota | 48 | 9.2 | 8.2 | -10.6% | |
Colorado | 49 | 11.0 | 9.2 | -16.9% | * |
Arkansas | 50 | 12.0 | 9.3 | -22.7% | * |
District of Columbia | 17.7 | 28.2 | 59.3% | * | |
Total U.S. | 10.6 | 12.7 | 19.7% | * | |
* The direction of the changes in the top/bottom ratio marked with an asterisk are statistically significant at the 95 percent level of confidence. That is, one can say with 95 percent certainty that the increases shown in the table are true increases in income inequality. |
Changes in Income Shares
Trends over the past decade in the share of total family income held by families in each quintile also illustrate the degree to which the recent economic expansion has benefited the richest fifth of the population more than low- or middle-income families.
For each quintile, Figure 4 shows the number of states where the share of income held by families in that quintile either decreased or increased. As shown, in the vast majority of states, families in the second, third and fourth quintiles lost ground. In more than half the states, including the largest states, families in the bottom fifth of the distribution also saw their share of total income fall, although in 21 states the share of income held by the poorest fifth of families rose. By contrast, in 47 states, the share of income held by the top fifth of the distribution increased.
Table 11 shows the share of income held by the bottom and top quintiles of the income distribution in both the mid-1980s and the mid-1990s. Over the past decade, the proportion of total family income held by the bottom 20 percent of families has continued to fall overall, from 4 percent to 3.7 percent in the United States as a whole, whereas the share held by the richest fifth of families has increased from 42.9 percent to 46.6 percent over the same period.
Table 11
Share of State Income Held by the Bottom and Top Fifths of Families with Children, '85-'87 through '94-'96 |
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Share of state income
|
Share of state income |
||||||||
State | '85-'87 | '94-'96 | '85-'87 | '94-'96 | |||||
Alabama | 3.1% | 3.4% | 43.4% | 44.8% | |||||
Alaska | 4.8% | 4.9% | 42.9% | 42.5% | |||||
Arizona | 4.9% | 3.4% | 42.6% | 48.7% | |||||
Arkansas | 3.6% | 4.7% | 43.7% | 43.3% | |||||
California | 4.4% | 3.4% | 43.0% | 48.6% | |||||
Colorado | 4.0% | 4.9% | 44.2% | 44.8% | |||||
Connecticut | 4.8% | 3.3% | 41.9% | 46.3% | |||||
Delaware | 4.9% | 4.6% | 39.7% | 44.5% | |||||
District of | 2.8% | 2.1% | 50.4% | 59.7% | |||||
Florida | 4.4% | 3.4% | 44.9% | 47.3% | |||||
Georgia | 3.7% | 3.8% | 43.5% | 47.6% | |||||
Hawaii | 4.7% | 4.7% | 40.6% | 43.2% | |||||
Idaho | 4.9% | 4.6% | 41.1% | 44.7% | |||||
Illinois | 3.5% | 3.7% | 42.6% | 45.4% | |||||
Indiana | 4.9% | 4.6% | 39.8% | 45.7% | |||||
Iowa | 4.9% | 5.4% | 39.2% | 42.4% | |||||
Kansas | 5.2% | 4.4% | 39.7% | 44.6% | |||||
Kentucky | 4.3% | 3.4% | 42.3% | 46.3% | |||||
Louisiana | 2.7% | 3.1% | 45.1% | 48.9% | |||||
Maine | 5.0% | 5.0% | 40.2% | 41.3% | |||||
Maryland | 4.8% | 4.1% | 41.1% | 45.9% | |||||
Massachusetts | 4.2% | 3.7% | 41.3% | 45.6% | |||||
Michigan | 3.5% | 3.5% | 42.1% | 44.3% | |||||
Minnesota | 4.4% | 5.1% | 40.3% | 42.1% | |||||
Mississippi | 3.6% | 3.5% | 43.7% | 45.2% | |||||
Missouri | 4.1% | 4.7% | 41.0% | 43.1% | |||||
Montana | 4.1% | 4.4% | 41.9% | 43.4% | |||||
Nebraska | 5.1% | 5.1% | 41.4% | 42.2% | |||||
Nevada | 4.6% | 5.1% | 41.4% | 40.9% | |||||
New Hampshire | 7.0% | 5.2% | 37.2% | 42.5% | |||||
New Jersey | 4.4% | 4.3% | 40.7% | 43.4% | |||||
New Mexico | 4.2% | 3.4% | 45.1% | 48.1% | |||||
New York | 3.5% | 2.6% | 44.7% | 50.7% | |||||
North Carolina | 4.6% | 3.9% | 41.8% | 45.0% | |||||
North Dakota | 5.2% | 5.5% | 39.1% | 40.0% | |||||
Ohio | 4.0% | 3.7% | 41.5% | 44.8% | |||||
Oklahoma | 4.2% | 3.6% | 42.3% | 45.6% | |||||
Oregon | 5.1% | 4.3% | 41.0% | 43.9% | |||||
Pennsylvania | 4.9% | 3.9% | 40.6% | 45.8% | |||||
Rhode Island | 4.5% | 4.0% | 39.6% | 44.5% | |||||
South Carolina | 4.3% | 3.8% | 41.5% | 44.7% | |||||
South Dakota | 4.3% | 4.2% | 41.1% | 42.0% | |||||
Tennessee | 4.1% | 3.6% | 42.1% | 47.4% | |||||
Texas | 3.8% | 3.7% | 43.8% | 48.0% | |||||
Utah | 5.8% | 6.0% | 39.5% | 42.1% | |||||
Vermont | 5.3% | 5.5% | 40.3% | 40.9% | |||||
Virginia | 4.2% | 4.2% | 42.2% | 45.4% | |||||
Washington | 3.8% | 4.0% | 44.1% | 44.7% | |||||
West Virginia | 3.5% | 3.5% | 43.7% | 45.4% | |||||
Wisconsin | 5.2% | 5.2% | 39.7% | 39.8% | |||||
Wyoming | 4.8% | 4.9% | 39.6% | 41.2% | |||||
Total U.S. | 4.0% | 3.7% | 42.9% | 46.6% |
Income Trends: Differences Between High- and Middle-Income Families
The recent trend toward increasing income inequality, like the long-term trend, is not limited to the increasing gap between low- and high-income families. Income disparities between middle class and high-income families also have been on the rise over the past decade. Table 12 shows the amount by which the incomes of families in the middle and top fifths of the income distribution rose or fell over the past decade in each state. In all but three states, families in the middle of the income distribution did worse than families at the top of the distribution between the mid-1980s and the mid-1990s.
In 19 states, high income families became richer while the middle-class became poorer. In Massachusetts, for example, the average income of the middle 20 percent of families with children fell from $50,422 to $48,333 between the mid-1980s and the mid-1990s, a decline of about four percent. The average income of the richest 20 percent of families with children rose from $115,696 to $132,962 over the same period, an increase of 15 percent.
In Wyoming, average income of the middle fifth of families fell 8 percent, from $44,677 to $41,073. The slight decline in the average income of the top fifth of families was not statistically significant.
In 27 of the remaining states, the average incomes of families in the middle of the income distribution increased, but by a smaller percentage than the incomes of the top fifth of families. In New Jersey, for example, the average income of the middle fifth of families increased from $55,041 to $56,718. This 3 percent increase, however, is modest when compared to the increase in the average income of the richest fifth of families. The top 20 percent of families with children saw their average income rise from $122,662 to $143,101, an increase of 17 percent.
There were just three states, Alaska, Nevada, and Vermont, where families with children in the middle fifth of the distribution did marginally better than families with children in the top fifth. In these states, average incomes of families with children in the middle fifth of the distribution increased by a slightly greater percentage than the average incomes of the top fifth of families.
Changes in Income Gaps
The increase in the income gaps between middle class and high-income families in the majority of states can be seen in Table 13, which shows how the ratio of the average incomes of the top fifth of families to the average incomes of the middle fifth of families has changed over the past decade.
Table 12 Percentage Change in Average Incomes of Middle and Top Fifths of Families with Children , '85-'87 to '94-'96 |
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State | Middle fifth | Top fifth | ||||||
19 States Where the Middle Fifth Grew Poorer and the Top Fifth Grew Richer | ||||||||
Arizona | ($8,445) | * | -21% | $2,597 | 3% | |||
California | ($3,957) | * | -9% | $17,093 | * | 15% | ||
Connecticut | ($3,321) | * | -6% | $14,915 | * | 11% | ||
Florida | ($894) | -2% | $5,630 | 6% | ||||
Hawaii | ($3,458) | * | -7% | $4,311 | 4% | |||
Kansas | ($2,877) | * | -7% | $14,360 | * | 15% | ||
Louisiana | ($3,908) | * | -11% | $6,088 | 6% | |||
Massachusetts | ($2,089) | * | -4% | $17,266 | * | 15% | ||
Mississippi | ($712) | -2% | $2,341 | 3% | ||||
New Hampshire | ($4,058) | * | -8% | $13,259 | * | 13% | ||
New Mexico | ($1,236) | * | -4% | $5,630 | 7% | |||
New York | ($1,702) | * | -4% | $24,721 | * | 23% | ||
Ohio | ($114) | -0% | $13,827 | * | 14% | |||
Oklahoma | ($2,787) | * | -8% | $4,672 | 5% | |||
Oregon | ($3,259) | * | -8% | $5,118 | 6% | |||
Rhode Island | ($3,663) | * | -8% | $12,542 | * | 13% | ||
South Carolina | ($2,147) | * | -6% | $7,988 | 9% | |||
Texas | ($3,720) | * | -9% | $10,632 | * | 10% | ||
Virginia | ($4,965) | * | -11% | $5,340 | 5% | |||
27 States Where Incomes of the Top Fifth Grew Faster than Incomes of the Middle Fifth | ||||||||
Alabama | $6,566 | * | 21% | $21,429 | * | 28% | ||
Arkansas | $1,993 | * | 7% | $6,072 | 8% | |||
Colorado | $5,149 | * | 12% | $17,861 | * | 16% | ||
Delaware | $129 | 0% | $24,377 | * | 26% | |||
Georgia | $1,089 | * | 3% | $25,994 | * | 27% | ||
Idaho | $5,108 | * | 15% | $24,721 | * | 31% | ||
Illinois | $2,355 | * | 5% | $21,651 | * | 21% | ||
Indiana | $870 | 2% | $28,403 | * | 34% | |||
Iowa | $5,694 | * | 15% | $26,428 | * | 34% | ||
Kentucky | $1,785 | * | 5% | $17,749 | * | 22% | ||
Maine | $1,748 | * | 5% | $8,159 | 10% | |||
Maryland | $3,017 | * | 6% | $31,917 | * | 28% | ||
Michigan | $1,894 | * | 4% | $14,418 | * | 14% | ||
Minnesota | $5,180 | * | 12% | $22,190 | * | 23% | ||
Missouri | $409 | 1% | $11,868 | * | 13% | |||
Montana | $418 | 1% | $7,707 | 9% | ||||
Nebraska | $3,961 | * | 11% | $15,712 | * | 18% | ||
New Jersey | $1,677 | * | 3% | $20,348 | * | 17% | ||
North Carolina | $2,807 | * | 8% | $18,662 | * | 21% | ||
North Dakota | $468 | 1% | $3,991 | 5% | ||||
Pennsylvania | $2,523 | * | 6% | $29,161 | * | 31% | ||
Tennessee | $830 | 2% | $23,054 | * | 27% | |||
South Dakota | $5,294 | * | 15% | $15,459 | * | 20% | ||
Utah | $3,044 | * | 7% | $19,112 | * | 21% | ||
Washington | $718 | 2% | $8,371 | 8% | ||||
West Virginia | $3,710 | * | 14% | $14,338 | * | 20% | ||
Wisconsin | $4,481 | * | 10% | $11,039 | * | 12% | ||
1 State Where Incomes of the Middle Fifth Fell Faster than Incomes of the Top Fifth | ||||||||
Wyoming | ($3,604) | * | -8% | ($1,415) | -1% | |||
3 States Where Incomes of the Middle Fifth Grew Faster than Incomes of the Top Fifth | ||||||||
Alaska | $2,739 | * | 6% | $1,666 | 1% | |||
Nevada | $3,575 | * | 9% | $5,404 | 6% | |||
Vermont | $2,229 | * | 5% | $4,887 | 5% | |||
District of Columbia | ($2,797) | * | -9% | $36,061 | * | 32% | ||
Total U.S. | ($390) | * | -1% | $16,463 | * | 16% | ||
* Dollar changes marked with an asterisk are statistically significant. The direction of the change is known with 95 percent certainty. See the footnote to Table 1 for details. |
Table 13 Change in Ratio of Incomes of Top and Middle Fifths of Families with Children, '85-'87 - '94-'96 |
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State | Rank |
Top-to-middle ratio '85-'87 | Top-to-middle ratio '94-96 | Change in Top/ Middle ratio | |||
Indiana | 1 | 2.2 | 2.9 | 31.4% | * | ||
Arizona | 2 | 2.5 | 3.2 | 29.5% | * | ||
New York | 3 | 2.6 | 3.4 | 28.3% | * | ||
California | 4 | 2.5 | 3.2 | 26.8% | * | ||
Delaware | 5 | 2.2 | 2.7 | 26.0% | * | ||
Tennessee | 6 | 2.4 | 3.0 | 24.5% | * | ||
Pennsylvania | 7 | 2.3 | 2.8 | 23.2% | * | ||
Georgia | 8 | 2.5 | 3.1 | 23.1% | * | ||
Kansas | 9 | 2.2 | 2.7 | 23.1% | * | ||
New Hampshire | 10 | 2.0 | 2.5 | 22.8% | * | ||
Rhode Island | 11 | 2.1 | 2.6 | 22.4% | * | ||
Texas | 12 | 2.6 | 3.1 | 21.7% | * | ||
Maryland | 13 | 2.3 | 2.8 | 20.2% | * | ||
Massachusetts | 14 | 2.3 | 2.8 | 19.9% | * | ||
Louisiana | 15 | 2.6 | 3.1 | 19.0% | * | ||
Connecticut | 16 | 2.4 | 2.8 | 18.3% | * | ||
Virginia | 17 | 2.4 | 2.8 | 17.4% | * | ||
Iowa | 18 | 2.1 | 2.5 | 16.0% | * | ||
South Carolina | 19 | 2.4 | 2.7 | 15.7% | * | ||
Kentucky | 20 | 2.4 | 2.8 | 15.6% | * | ||
Illinois | 21 | 2.4 | 2.7 | 15.0% | * | ||
Oregon | 22 | 2.3 | 2.6 | 14.7% | * | ||
Ohio | 23 | 2.3 | 2.6 | 14.4% | * | ||
Idaho | 24 | 2.3 | 2.7 | 13.9% | * | ||
Oklahoma | 25 | 2.4 | 2.8 | 13.8% | * | ||
New Jersey | 26 | 2.2 | 2.5 | 13.1% | * | ||
Utah | 27 | 2.2 | 2.5 | 12.6% | * | ||
North Carolina | 28 | 2.4 | 2.7 | 12.5% | * | ||
Missouri | 29 | 2.2 | 2.5 | 12.2% | * | ||
Hawaii | 30 | 2.3 | 2.6 | 11.9% | * | ||
New Mexico | 31 | 2.8 | 3.1 | 11.0% | * | ||
Minnesota | 32 | 2.2 | 2.4 | 9.9% | * | ||
Michigan | 33 | 2.3 | 2.6 | 9.3% | * | ||
Florida | 34 | 2.8 | 3.0 | 8.1% | * | ||
Montana | 35 | 2.4 | 2.5 | 8.1% | |||
Wyoming | 36 | 2.2 | 2.3 | 7.2% | |||
Nebraska | 37 | 2.3 | 2.5 | 6.7% | |||
Washington | 38 | 2.6 | 2.7 | 6.2% | |||
West Virginia | 39 | 2.6 | 2.7 | 6.0% | |||
Mississippi | 40 | 2.6 | 2.7 | 5.4% | |||
Alabama | 41 | 2.5 | 2.6 | 5.4% | |||
Maine | 42 | 2.2 | 2.3 | 4.9% | |||
South Dakota | 43 | 2.3 | 2.4 | 3.7% | |||
North Dakota | 44 | 2.1 | 2.2 | 3.4% | |||
Colorado | 45 | 2.7 | 2.7 | 3.3% | |||
Wisconsin | 46 | 2.1 | 2.2 | 1.4% | |||
Arkansas | 47 | 2.5 | 2.6 | 1.2% | |||
Vermont | 48 | 2.3 | 2.3 | -0.2% | |||
Nevada | 49 | 2.3 | 2.3 | -2.9% | |||
Alaska | 50 | 2.6 | 2.5 | -4.0% | |||
District of Columbia | 3.6 | 5.1 | 44.5% | * | |||
Total U.S. | 2.5 | 2.9 | 17.4% | * | |||
* The direction of the changes in the top/bottom ratio marked with an asterisk are statistically significant at the 95 percent level of confidence. That is, one can say with 95 percent certainty that the increases shown in the table are true increases in income inequality. |
As shown, the gap in income between middle class and high-income families increased in every state except Alaska, Nevada, and Vermont over the past decade. In Indiana, Arizona, New York, California, and Delaware, the gap in income inequality between high- and middle-income families increased more than 25 percent.
Changes in Income Shares
The share of total income held by middle-class families has fallen in virtually every state over the past decade. Since the mid-1980s, the share of income held by the middle fifth of families has fallen in 47 states. There were only three states, Alaska, Nevada, and Vermont, where the share of income held by the middle quintile increased modestly over the decade. By contrast, the share of income held by the top fifth of families increased in all but three states, Alaska, Arkansas, and Nevada.
Table 14 shows the share of income held by families in the middle and top quintiles in the mid-1980s and the mid-1990s. In the United States as a whole, the share of income held by the middle fifth of families fell from 17.4 percent to 16.1 percent. The share of total family income held by the top fifth of families with children increased from 42.9 percent to 46.6 percent over the same period.
Table 14 Share of State Income Held by the Middle and Top Fifths of Families with Children, '85-'87 through '94-'96 |
||||||||
Share of state income held by middle fifth |
Share of state income held by top fifth | |||||||
State | '85-'87 | '94-'96 | '85-'87 | '94-'96 | ||||
Alabama | 17.4% | 17.1% | 43.4% | 44.8% | ||||
Alaska | 16.8% | 17.3% | 42.9% | 42.5% | ||||
Arizona | 17.2% | 15.1% | 42.6% | 48.7% | ||||
Arkansas | 17.1% | 16.8% | 43.7% | 43.3% | ||||
California | 17.2% | 15.3% | 43.0% | 48.6% | ||||
Colorado | 16.6% | 16.3% | 44.2% | 44.8% | ||||
Connecticut | 17.7% | 16.5% | 41.9% | 46.3% | ||||
Delaware | 18.3% | 16.3% | 39.7% | 44.5% | ||||
Florida | 16.2% | 15.8% | 44.9% | 47.3% | ||||
Georgia | 17.4% | 15.5% | 43.5% | 47.6% | ||||
Hawaii | 17.6% | 16.7% | 40.6% | 43.2% | ||||
Idaho | 17.6% | 16.8% | 41.1% | 44.7% | ||||
Illinois | 18.1% | 16.8% | 42.6% | 45.4% | ||||
Indiana | 18.3% | 16.0% | 39.8% | 45.7% | ||||
Iowa | 18.5% | 17.3% | 39.2% | 42.4% | ||||
Kansas | 18.0% | 16.5% | 39.7% | 44.6% | ||||
Kentucky | 17.3% | 16.4% | 42.3% | 46.3% | ||||
Louisiana | 17.2% | 15.6% | 45.1% | 48.9% | ||||
Maine | 18.2% | 17.8% | 40.2% | 41.3% | ||||
Maryland | 17.7% | 16.4% | 41.1% | 45.9% | ||||
Massachusetts | 18.0% | 16.6% | 41.3% | 45.6% | ||||
Michigan | 17.9% | 17.2% | 42.1% | 44.3% | ||||
Minnesota | 18.4% | 17.4% | 40.3% | 42.1% | ||||
Mississippi | 16.9% | 16.6% | 43.7% | 45.2% | ||||
Missouri | 18.4% | 17.3% | 41.0% | 43.1% | ||||
Montana | 17.8% | 17.0% | 41.9% | 43.4% | ||||
Nebraska | 17.8% | 17.0% | 41.4% | 42.2% | ||||
Nevada | 17.6% | 17.9% | 41.4% | 40.9% | ||||
New Hampshire | 18.3% | 17.1% | 37.2% | 42.5% | ||||
New Jersey | 18.3% | 17.2% | 40.7% | 43.4% | ||||
New Mexico | 16.1% | 15.5% | 45.1% | 48.1% | ||||
New York | 17.0% | 15.0% | 44.7% | 50.7% | ||||
North Carolina | 17.5% | 16.8% | 41.8% | 45.0% | ||||
North Dakota | 18.4% | 18.2% | 39.1% | 40.0% | ||||
Ohio | 18.0% | 17.0% | 41.5% | 44.8% | ||||
Oklahoma | 17.5% | 16.5% | 42.3% | 45.6% | ||||
Oregon | 18.1% | 16.9% | 41.0% | 43.9% | ||||
Pennsylvania | 17.9% | 16.4% | 40.6% | 45.8% | ||||
Rhode Island | 18.6% | 17.1% | 39.6% | 44.5% | ||||
South Carolina | 17.5% | 16.2% | 41.5% | 44.7% | ||||
South Dakota | 18.0% | 17.7% | 41.1% | 42.0% | ||||
Tennessee | 17.7% | 16.0% | 42.1% | 47.4% | ||||
Texas | 17.1% | 15.4% | 43.8% | 48.0% | ||||
Utah | 18.0% | 17.0% | 39.5% | 42.1% | ||||
Vermont | 17.7% | 18.0% | 40.3% | 40.9% | ||||
Virginia | 17.7% | 16.2% | 42.2% | 45.4% | ||||
Washington | 17.2% | 16.4% | 44.1% | 44.7% | ||||
West Virginia | 17.0% | 16.6% | 43.7% | 45.4% | ||||
Wisconsin | 18.5% | 18.3% | 39.7% | 39.8% | ||||
Wyoming | 18.4% | 17.8% | 39.6% | 41.2% | ||||
District of | 14.2% | 11.6% | 50.4% | 59.7% | ||||
Total U.S. | 17.4% | 16.1% | 42.9% | 46.6% |
End Notes for Chapter Three
1. In 13 of these states, the increase was not statistically significant.