One cannot avoid facing the fact that in several parts of the United States (if not, most parts) the top earners are getting richer, while the middle-to-lower-middle income majority are getting poorer. And there are unnerving, clear examples of this trend across all levels of geography, from the city-level up to the state-level.
After analyzing Census Bureau American Community Survey data from 2011 through 2016, five U.S. states in particular display unsettling levels of income inequality and, worse, its continuing rapid growth. The principal factors evaluated were the mean household income and median household income in 2011; their growth over the five years from 2011 to 2016; and the consequent growth in the gap between mean income and median income, which is an indicator of worsening wealth inequality.
Three of the top five worst states for income inequality rank among the most populous states in the country: California, No. 1; Washington, No. 13; and Massachusetts, No. 15, out of 50 states plus the District of Columbia. The other two states, however, are among the least populated: Montana and North Dakota. Let’s take a closer look at these five states that are so severely afflicted by rising inequality.
5. Massachusetts
- 2011 mean income-median income gap: $22,596
- 2016 mean income-median income gap: $26,341
- Five-year increase in income gap: $3,745 | 17%
Income inequality in Massachusetts is among the worst in the country. Although the 2000s dotcom bubble saw the biggest discrepancy develop between what the top 1% and what the bottom 99% earned, the income gap has only steadily gotten worse since, according to data from GOBankingRates. In Suffolk County, where Boston is located, the top 1% earns an average income that’s nearly 54-times more than the bottom 99%, according to data from Economic Policy Institute.
4. California
- 2011 mean income-median income gap: $23,516
- 2016 mean income-median income gap: $27,366
- Five-year increase in income gap: $3,850 | 16%
Income inequality in California has worsened significantly since the turn of the millennium. Middle incomes have barely budged, with the state median rising just $2,151 from 2011 to 2016. Meanwhile, California’s mean income got a solid $6,000 bump over the same five years, climbing to a current average household income of $91,149.
3. Washington
- 2011 mean income-median income gap: $17,614
- 2016 mean income-median income gap: $21,174
- Five-year increase in income gap: $3,560 | 20%
Washington is home to Seattle, the scene of a booming tech industry whose growth has fueled a population and housing surge to an unprecedented level for the state. But the Seattle metro area, not coincidentally, is also the most unequal place in Washington. Both the Seattle metro area and Washington state overall have a top 1% that earns more than 24-times that of the bottom 99% of households, according to recent data.
2. Montana
- 2011 mean income-median income gap: $13,525
- 2016 mean income-median income gap: $17,021
- Five-year increase in income gap: $3,496 | 26%
In Montana, the median household income only grew from $45,324 in 2011 to $48,380 in 2016. The mean income, however, rose from $58,849 to $65,401 — an increase of $6,552 in average household incomes over five years versus just a $3,000 increase for median incomes.
1. North Dakota
- 2011 mean income-median income gap: $14,691
- 2016 mean income-median income gap: $19,714
- Five-year increase in income gap: $5,023 | 34%
The good news for North Dakota is that its rates of growth for both mean and median household incomes rank among the highest nationally. From 2011 to 2016, median income rose from $49,415 to $59,114, an increase of about $9,700. Mean income fared even better, rising more than $14,700 over the same five years, from $64,106 to $78,828. Including all 50 states plus D.C., North Dakota’s average household income is now the 19th highest in the U.S.
The bad news is North Dakota has experienced the biggest growth in mean-to-median income discrepancy from 2011 to 2016: An increase of 34%, which has created a current gap of almost $20,000 between mean and median household incomes.
