Income inequality in the United States has been a real problem for quite some time, and new research from the Economic Policy Institute (EPI) finds that the gap is only growing wider.
Rising income inequality is a reverse of the trend that dominated during the mid-20th century. According to the EPI, the share of income held by the top 1 percent declined from 1928 to 1973. However, since the 1970s, things have been going in the other direction. This new report, based on data collected from 1917-2015, illuminates the current state of income equality in the United States.
Here are a few key findings from the report:
1. The top 1 percent earn much more than the other 99 percent
The picture of economic inequality in the U.S. is pretty bleak. In 2015, the top 1 percent of families in the U.S. earned 26.3 times as much as the other 99 percent. In 2013, they made 25.3 times as much. The top earners take home 21 percent of the total income. We haven’t seen a discrepancy like that since the early part of the 20th century.
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2. Income inequality is vast and widespread
The gap between the top 1 percent and everyone else is growing wider in most states. Overall, the income of the bottom 99 percent has risen in recent years. However, from 2009 to 2015, the income of the top 1 percent grew faster than the rest in 43 states and the District of Columbia. This is not an isolated issue – the problem of rising income inequality is vast and widespread. Check out your state or region to see how income inequality impacts your area specifically.
3. The gap in some places is especially Large
Income inequality varies considerably across the United States. Teton County, Wyoming is the most unequal county, according to these findings. There, the top 1 percent earns an average income of $22,508,018. That’s 142.2 times more than the bottom 99 percent, with average earnings of $158,290. In New York, Florida and Connecticut, the states with the widest gaps overall, the top 1 percent earns 35 times more than the rest.
4. There are huge earnings at the top
In order to be in the top 1 percent, a family would need to have earned a total income of $421,926 or more in 2015. In some states, you’d need even more. In Connecticut, for example, the top 1 percent earns $700,800. About 40 percent of the total earnings of the 1 percent came from families in five states: California, Texas, Florida, New York and Illinois.
5. Certain policies can make all the difference
The mid-20th century trend of improving economic equality went hand in hand with a few key policies and circumstances. Unemployment was low, like it is today at just 3.9 percent. But, wages were also on the rise, and today real wages are stagnant for most U.S. workers. Between Q1 and Q2 2018, real wages declined 1.8 percent, according to The PayScale Index. Real wages have declined 9.3 percent since 2006.
What can be done to reverse these economic trends?
“We need policies that return the economy to full employment and keep it there, return bargaining power to U.S. workers, increase political participation by all citizens, and boost public investments in child care, education, housing, and health care,” the report states. “Such policies will help prevent the wealthiest few from appropriating more than their fair share of the nation’s expanding economic pie.”
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