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Why some of America’s richest people are living in the middle of nowhere


It’s widely known that income inequality has grown rapidly in recent decades. As it stands in the United States, an average member of the top 1 percent of earners makes 25 times as much money as an average member of the other 99 percent. But this is just a national figure; across the country, the ratio ranges from 5 all the way up to 233.

What might be more surprising is precisely where income inequality hits those peaks. Yes, a lot of inequality is where you’d expect it: in big cities along the coasts. The super-wealthy live cosmopolitan lifestyles near the financial centers where they work, alongside the poor who live in the city for its social services, job opportunities and inexpensive transportation. Counties with a population greater than 1 million are twice as unequal, on average, than those with populations less than 1 million.

But there is also a more hidden inequality in America, deep pockets of extreme income gaps in a place where it might not be expected: rural America.

Look at the dark blue spots in the map below, which shows the level of inequality in every U.S. county, and you’ll see zones of surprising inequality far from coasts and big urban centers.

The data comes from the Economic Policy Institute, which last Thursday put out a report calculating income inequality county by county. Almost all similar studies have looked only at major metropolitan areas.

This rural inequality seems to come in two forms. One, which I’ll call “home-grown” inequality, is where the local industries create large income disparities. The other, which I’ll call “flown-in” inequality, is where rich people who made their income elsewhere take up residence.

Home-grown inequality occurs predominately in areas with significant energy-related industries. Drilling for oil or using hydraulic fracturing, or fracking, for natural gas requires a lot of open land, so it happens in rural areas. And because of the immense value of these energy sources, the landowners who have property rights over them become tremendously wealthy, while the working class people who keep the oil rigs running do not.

This is clear in South Texas, which is filled with oil fields. In La Salle County, where nearly a third of residents are below the poverty line, the top 1 percent of earners make 126 times as much as the 99 percent. Karnes, De Witt, and Gonzales Counties – the dark blue cluster Northeast of La Salle on the map – all also have high oil production and income inequality.

In La Salle, the income distribution is particularly extreme. There's a significant population of low earners and some people in the middle. But aside from the handful of the ultra-rich, there are very few high earners. Nearly a fifth of households make less than $10,000 per year, the fourth-highest rate out of Texas's 254 counties. The county's median income is similarly low.

On the wealthy side of the distribution, incomes escalate quickly. Only 1.2 percent of households make more than $200,000, according to 2013 census figures. The EPI study says the top 1 percent makes more than $700,000, and the top 0.5 percent makes more than $6 million, the second-highest such measure nationwide.

But this phenomenon is not confined to Texas. Mark Price, one of the authors of the report, says a similar disparity is starting to show up in eastern Ohio, a major center for fracking. “There was a rapid growth in all incomes, but particularly top incomes, in counties with high levels of drilling and fracking,” he said. “Energy extraction may play a role here.”

With the recent oil bust, it’s unclear whether the inequality created by these energy production sites will subside — or intensify. Although there has probably been a lot of lost wealth at the top, tens of thousands of workers who got jobs in the oil boom have lost them.

Then there’s “flown-in” inequality — the already-rich moving to rural resort towns. As Price puts it, “If you were a billionaire, where would you want to live in the United States?”

One answer to that question is the sparsely populated Teton County, Wyo., which is by far the most unequal county in the United States. Here, the top 1 percent make 233 times as much as the lower 99 percent. Home to the famed Jackson Hole ski resort, the area has been home to the ultra-rich, putting Dick Cheney and Christy Walton, Wal-Mart heiress and richest woman in America, among the chairlift ticket scanners.

Teton County sees a very different income distribution than La Salle County, Tex. Here, the income inequality is driven by the immense wealth of its richest residents. In Teton, more than 9 percent of its households make more than $200,000. That's the highest in Wyoming by far — more than triple the state average and more than double the rate of the next highest county. The average income of a member of the 1 percent here tops $28 million, more than quadruple the next highest average in the country.

But the rest of Teton County is not much worse off; even ignoring the households making more than $200,000, Teton County is still among the richest counties in Wyoming. It has the second-lowest rate of households making less than $10,000 among the state's 23 counties — just 3 percent — and its other low and middle-income measures are similar. In other words, Teton County's top 1 percent are so wealthy that they can take an already-rich community and still make it the most unequal place in America.

A similar effect, though to a lesser extent, is seen in ski resort towns all across the Rockies: Summit County, Utah, home to the Park City resort, as well as Pitkin County, Colo., home to Aspen.

The wealth migration also happens outside resort areas. In Monroe County, Fla., a rural county that includes the Florida Keys, the 1 percent makes 59 times as much as the 99 percent. Eastward, in Palm Beach County, which is more populated than Monroe but also more of a retiree destination, that figure is 62.

Even though these few examples are extreme, the report on the whole reconfirms what we already knew — that income inequality is high across the country. “There has been a lot of income growth in the U.S., but it seems to be largely unbalanced compared to in the past,” Price said. “That’s what we’re really trying to draw people’s attention to.”

Correction: In an earlier version of the national map, La Salle County, Texas was miscolored. The map has been corrected.

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