Census: Four consecutive years of income increases, poverty decreases, but inequality among states grows

Income inequality in the U.S. reached its highest level in 2018 since the U.S. Census Bureau started tracking it in 1967, according to a report that analyzes wealth distribution.

According to the bureau, the 2017-2018 data reveals that median household incomes for family households increased for four consecutive years. During the same period, the poverty rate also declined for four consecutive years.

“In 2018, for the first time in 11 years, the official poverty rate was significantly lower than 2007, the year before the most recent recession,” the report states.

Between 2017 and 2018, the real median earnings of all workers increased by 3.4 percent.

From 2017 to 2018, 14 states reported increases in real median household income, with Maine reporting a decrease of 3.3 percent.

According to the 2018 American Community Survey (ACS), median household income also rose between 2017 and 2018 for 10 of the 25 most populous metropolitan areas. Median household income in 2018 ranged from $107,898 in the San Francisco-Oakland-Hayward Metro Area to $54,912 in the Tampa-St. Petersburg-Clearwater Metro Area.

Despite income gains, poverty rate decreases, the longest economic expansion the U.S. has ever seen, and historic low unemployment rates, 9 states still saw spikes in income inequality, the report notes.

The nine states are Alabama, Arkansas, California, Kansas, Nebraska, New Hampshire, New Mexico, Texas and Virginia.

The most wealth was concentrated in Washington, D.C., New York, Connecticut and California, the report adds, with widespread poverty still plaguing Louisiana.

States with the greatest level of income equality were Utah, Alaska and Iowa, the report found.

The Census Bureau first began measuring income equality in 1967 using the Gini index, among other tools. The index measures wealth distribution in a single household across a population, with zero representing total income equality and 1 representing total inequality. More than 50 years ago, the Gini index was 0.397. In 2018, it was 0.485.

The number of families earning $15,000 or less has fallen since 2007, according to the bureau, while the number of households bringing in $250,000 a year or more grew by more than 15 percent.

The nation’s median household income topped $63,000 in 2018. However, after adjusting for inflation, this income level is nearly the same as it was 20 years ago, the report notes.

The report presents data on income, earnings, income inequality and poverty in the U.S. based on information collected in the 2019 and earlier Current Population Survey Annual Social and Economic Supplements (CPS ASEC) conducted by the U.S. Census Bureau.

Comparing the 2017 ACS with the 2018 ACS is not an exact comparison of economic conditions in 2017 and 2018, the bureau emphasizes.

To narrow the income gap, Democratic presidential candidates Sens. Bernie Sanders and Elizabeth Warren both proposed a wealth tax to increase the minimum wage.

“There should be no billionaires,” Sanders tweeted when he announced his plan. “We are going to tax their extreme wealth and invest in working people.”

This article was first published by The Center Square.



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