Alaska was the only state to see its Gini Index score decline, while 15 states posted increases. D.C. and the remaining 34 states saw no change. The 15 states that saw income inequality rise last year were: Arizona, California, Delaware, Hawaii, Illinois, Indiana, Iowa, Maryland, Nebraska, New Jersey, New York, North Carolina, Pennsylvania, Texas and Washington.
Those results reflect a multi-year trend: Earlier this month, the Federal Reserve reported that “[o]nly families at the very top of the income distribution saw widespread income gains between 2010 and 2013.”
And income inequality can have cascading effects. In a Monday analysis, credit ratings agency Standard & Poor’s concluded that income inequality acted as a drag on state tax collections.
“The findings from our research indicate that tax revenue growth slows as income inequality rises, especially for the sales tax-dependent states,” the report’s authors wrote. “This suggests to us that inequality is having a detrimental effect on economic growth.”
Five states and D.C. had Gini scores above that of the nation, while 36 were lower, and nine were not statistically different. The inequality estimates are based on the American Community Survey, the Census’s annual survey of about 3.5 million households.