As the economy recovers, some people are reaping the benefits more than others.
The top 1 percent of earners are amassing a disproportionate share of the income growth in each state, driving inequality to levels not seen in decades, according to a new report from the Economic Policy Institute. Between 1979 and 2007, more than half of all of the income growth in the nation went to the top 1 percent, the report found. For the bottom 99 percent of taxpayers, income grew by less than 20 percent.
“The benefits of economic growth have been going increasingly to this tiny share of households,” said Mark Price, a labor economist at the Keystone Research Center and one of the authors of the report.
EPI used data from the Internal Revenue Service to track how incomes have changed over time. As my colleague Niraj Chokshi reported, the trend is widespread, affecting most states. He wrote:
What EPI found is that income inequality is growing in every region of the country, with the top 1 percent of earners in Connecticut in 2012 making as much as 51 times what their fellow residents make, the widest such gap of any state. The gap was smallest that year in Hawaii, where the average income for the top slice of earners was still 14.6 times the average for the remaining 99 percent. In Washington, D.C., that multiple is 32.3.
In four states — Nevada, Wyoming, Michigan, and Alaska — only people in the top 1 percent saw incomes rise between 1979 and 2007, according to the EPI analysis.
But what exactly does it look like to be in the top 1 percent? Depends on where you live.
As the map shows, you don’t need millions in annual income to make the cut. States that are hubs for higher earning industries, like finance, had higher thresholds.
In New York, workers in the top 1 percent bring in at least $506,000 in income each year. But in New Mexico, the bar comes down to $241,000. In the District, where incomes have been on the rise, one needs to make $555,341 to be in the top 1 percent.
EPI also broke down what the income was for the top 0.1 percent and 0.01 percent of earners in each state. In D.C., those thresholds were $15 million and $53 million, respectively.