Income Inequality Continues to Grow Despite Bump in Median Income

September 27, 2019 by Dan McCue

WASHINGTON – The gap between those who are well-off in the United States and those who aren’t is now the largest it’s been in the past 50 years – this despite the median U.S. income setting a new record high, the U.S. Census Bureau said this week.

According to the agency’s new American Community Survey report, the median household income in the United States hit a new high in 2018, coming in at $61,937.

However, in 29 states, the median household income was lower than the national figure.

The report says many states didn’t see a change in income inequality last year, but in nine the income gap widened.

These states were Alabama, Arkansas, California, Kansas, Nebraska, New Hampshire, New Mexico, Texas and Virginia.

Income inequality is measured through something called the Gini index, which measures how far apart incomes are from each other. The Gini index is a scale from 0 to 1 with zero representing perfect equality and 1 representing perfect inequality. 

In the United States, the Gini index figure had been holding steady for the past several years. But it moved from 0.482 in 2017 to 0.485 in 2018. 

While this number might not raise the eyebrow of a typical reader, the Census Bureau says the change is statistically significant.

The agency said five states — California, Connecticut, Florida, Louisiana and New York — and the District of Columbia had higher inequality rates than the rest of the U.S. in 2018.

Despite these sobering numbers, the Census Bureau also had some good news to report: The poverty rate actually fell in 14 states, and in four states — California, Florida, Georgia and North Carolina — the poverty rate dropped for the fifth consecutive year.

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