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High class families outpacing incomes state by state { January 26 2006 } Original Source Link: (May no longer be active)    http://money.cnn.com/2006/01/25/news/economy/income_gap/ http://money.cnn.com/2006/01/25/news/economy/income_gap/ Mind the gap: Income inequality, state by state New report looks at where the growth in incomes of high-income families has outpaced that of middle- and low-income households. By Jeanne Sahadi, CNNMoney.com senior writer January 26, 2006: 6:11 PM EST NEW YORK (CNNMoney.com) – You don't need to be a statistician to realize that economic growth in the past 20 years hasn't lifted everyone's boat equally. The good news is that incomes across the board are up. But so is the income gap. That is, incomes for high-income families have risen faster than for everyone else. But growth in the income gap has been greater in some states than in others, according to a report released Thursday by two liberal think tanks – the Economic Policy Institute and the Center on Budget and Policy Priorities. (See table below to see where the greatest disparities are.) For the period between the early 1980s and the early 2000s, the report found that the incomes of the top fifth of families grew faster than those of the bottom fifth of families in 38 states. The states where the gap grew the most were Arizona, New York, Massachusetts, Tennessee and New Jersey. In only one state – Alaska – did income growth for low-income families outpace that of high-income households. By the early 2000s, the average income of the top 20 percent of families in 32 states was at least 6.4 times higher than that of low-income families. That's a big change since the early 1980s, when no state had a "top to bottom" ratio exceeding 6.4. When the authors looked at the incomes of the top 5 percent of households in 11 large states, they found sharp disparities. The top 5 percent of families saw their incomes rise as much as 132 percent between 1980 and 2003. The bottom 20 percent of families, meanwhile, saw their incomes rise by no more than 24 percent. In dollars and cents, average incomes of those in the top 5 percent rose between $80,400 to over $153,000. Increases for the bottom 20 percent in those 11 states, meanwhile, didn't exceed $4,000. Since the early 1980s, the gap between high-income and middle-income households also rose. The report noted that the top 20 percent of households had incomes more than 2.3 times greater than that of middle-income households in 36 states by the early 2000s. Again, that's a huge difference compared with the early '80s, when that was the case in only one state. Why the disparity? The authors of the report point to several factors that have contributed to the widening income gaps since the early 1980s. Among those they cite as having disproportionately hurt the earnings of low- and middle-income households are: long periods of high unemployment, globalization, the loss of manufacturing jobs, the growth in low-wage service jobs, and a stagnant minimum wage. The federal minimum wage -- $5.15 an hour – has remained unchanged since 1997. Only 17 states and the District of Columbia have set their minimums higher. They also point to the growth in investment income in the 1990s as another factor that has disproportionately boosted the incomes of higher income households. Consequences of income inequality That incomes have grown overall may seem like an unqualified good. But there can be social and political consequences when the income gap widens, some economists say. Robert Frank, an economist at Cornell University, for instance, found that in counties with the widest income gaps, rates of personal bankruptcy and divorce rates were higher than average. He also notes that when wealthier families see their incomes rise at a faster pace than everyone else, their spending can create what he calls an "expenditure cascade." That is, the demand for bigger and better homes or safer cars can create new standards for those lower down on the economic scale. But since their incomes aren't growing as fast, they have a hard time keeping up, leading to what Frank calls "welfare loss." For example, as home prices rise, it becomes harder to afford a home in a neighborhood with good public schools. And when the majority of households come under financial stress to provide a solid life for their families, voters will be less inclined to pay for public services such as bridge and highway maintenance, port security and food inspection. And that can adversely affect everyone. ------------------------------------- Mind the Gap: Income inequality, state by state The Economic Policy Institute and the Center on Budget and Policy Priorities ranked each state according to the ratio of the average income for the top 5% of families to the average income for the bottom 20% of families. Income listed is after federal tax and includes capital gains. Click on state name for more statistics on major cities and towns. Avg income of top Avg income of bottom Top-to-bottom Rank State 5% of families 20% of families ratio 1 Arizona $223,081 $15,719 14.2 2 Texas $203,174 $14,724 13.8 3 New York $216,061 $16,076 13.4 4 New Jersey $268,889 $20,391 13.2 5 Kentucky $193,766 $14,814 13.1 6 Tennessee $187,026 $14,303 13.1 7 Florida $199,892 $15,396 13 8 California $207,363 $16,773 12.4 9 North Carolina $183,253 $14,884 12.3 10 Pennsylvania $223,152 $18,548 12 11 Massachusetts $233,108 $19,690 11.8 12 Maryland $253,923 $21,480 11.8 13 Arkansas $163,908 $13,888 11.8 14 Alabama $172,029 $14,765 11.7 15 Washington $195,170 $16,911 11.5 16 Louisiana $153,334 $13,347 11.5 17 Kansas $209,125 $18,284 11.4 18 New Mexico $157,011 $13,748 11.4 19 Colorado $215,109 $18,983 11.3 20 Illinois $203,876 $18,032 11.3 21 Michigan $200,814 $17,927 11.2 22 West Virginia $147,434 $13,208 11.2 23 Virginia $200,191 $18,110 11.1 24 Connecticut $231,928 $21,003 11 25 Mississippi $145,342 $13,456 10.8 26 Hawaii $208,340 $19,294 10.8 27 Ohio $195,175 $18,216 10.7 28 Rhode Island $200,859 $18,916 10.6 29 South Carolina $157,634 $14,957 10.5 30 Indiana $195,217 $18,590 10.5 31 Maine $164,232 $15,975 10.3 32 Oregon $175,976 $17,367 10.1 33 Minnesota $223,411 $22,608 9.9 34 Utah $192,142 $19,594 9.8 35 New Hampshire $226,178 $23,128 9.8 36 Georgia $158,382 $16,345 9.7 37 Oklahoma $150,011 $15,483 9.7 38 Missouri $176,320 $18,482 9.5 39 Nevada $180,521 $19,143 9.4 40 Vermont $176,291 $18,846 9.4 41 Delaware $188,435 $20,225 9.3 42 Montana $135,164 $14,788 9.1 43 Idaho $162,923 $17,847 9.1 44 North Dakota $147,519 $16,805 8.8 45 Alaska $180,148 $20,533 8.8 46 Wisconsin $174,919 $20,197 8.7 47 South Dakota $155,427 $18,353 8.5 48 Iowa $155,722 $18,503 8.4 49 Nebraska $160,862 $19,242 8.4 50 Wyoming $145,587 $18,171 8 Note: Analysis based on data from the Census Bureau's Current Population Survey.

2001-crash 2002-early-fall 2002-wrapup 2003 2004 2005 2006-jan-aug 2006-sep-dec 2007-aug-dec 2007-jan-may 2007-jun-jul 2008-jan-may 2008-jun-jul jobs real-estate vet-benefit-cuts 2002 worst 25 years { December 31 2002 } Adjustable rate mortgages will be time bomb for low income { July 25 2004 } American class immobility { December 1 2003 } Americans income shrank for two years { July 29 2004 } Americans overworked since 1950 Americans spend all and save lowest since 1930s { February 1 2007 } Americans wages reduced in 2005 { January 19 2006 } Americans work ninie weeks more than europeans { August 2 2005 } Budget deficit over 2 trillion 2004 { September 7 2004 } Buffet lashes out against derivatives Bugget disarm derivatives now { March 5 2003 } Bush aide says outsourcing a good thing Bush blames economy on tv war coverage { August 2 2003 } Cities face more hungry homeless { December 14 2004 } Controversial overtime rules take effect { August 23 2004 } Corporate profits overshadow wages in GDP { August 28 2006 } Cost of insuring workers health increases 11 perc { September 10 2004 } Defense spending drops buy america { January 4 2006 } Depend japan { December 22 2001 } Disposable worker conditions Fast food classified as manufacturing job { February 20 2004 } Future chronic deficits { May 28 2003 } Gold 6yr high { January 7 2003 } Greenspan urges cuts in social security { February 26 2004 } Greenspan war threat hurts economy { February 11 2003 } Greenspan warns natural gas outlook { June 11 2003 } Greenspan warns of retirement benefit cuts { August 28 2004 } Half americans will use food stamps { August 25 2004 } Health insurance costs rise faster than wages { September 28 2004 } High class families outpacing incomes state by state { January 26 2006 } Homeless vets 500 000 year Income gap between black and white grows { October 2007 } Inflation deflation yes Larouche brings message of financial doom { May 14 2004 } Long communtes dragging american economy { July 28 2006 } Long heightened terror alerts too expensive { August 4 2004 } Long working hours erode family life { September 3 2004 } Mcdonalds first loss Mcdonalds suffers losses Minimum wage unable to pay rent in america More blacks extreme poverty { May 1 2003 } One third homeless veterans { August 31 2003 } Outsourcing doubled in last four years Over million more americans in poverty uninsured Pentagon to end buy american { May 22 2003 } Permanent jobs are elusive { October 11 2004 } PublicRadio MarketPlace 5 12 2006 inflation [mp3] Report calls US healthcare expensive and inefficient { May 15 2007 } Report says 10 thousand work in forced labor { September 25 2004 } Returning troops have lost their jobs { August 16 2004 } Rich poor income gap widens { January 27 2006 } Savings rate lowest since great depression Sector change from aerospace to retail hubs { December 24 2004 } Senate gop blocks minimum wage hike { July 12 2003 } Shooting messenger { January 3 2003 } Small indiana town in political fight over outsourcing { April 4 2004 } States 40b 2003 deficit United states lost 1 5m jobs to china in 14 years Us economy pot porn over corn { May 2 2003 } US high in UN child poverty table { March 1 2005 } Us japan bubble { October 2 2002 } US trade deficit tops half trillion as farming imported Working poor struggle to make ends meet { May 3 2004 } Files Listed: 63

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