Census report: More states have rising income inequality

A business man walks by a homeless woman holding a card requesting money in New York City.

Today the Census Bureau released statistics on income and poverty at the state level.  The release is a more condensed version of a national study that came out earlier this month. 

The report measures increases and decreases in income and poverty on a state by state basis.  It also shows how each state is faring in those catagories when compared to the national rate.

Income: Inequality on the rise, more than half of states have incomes lower than national average

The report showed that 27 states had median incomes lower than the national average of $50,502. Nineteen states and the District of Columbia had incomes higher than the national average.  Nebraska, North Dakota, Pennsylvania and Wisconsin evened out, having median incomes that were close to the national average.

When comparing today’s numbers to last year’s, only one state saw an increase in median household income.  Vermont saw a jump of more than $2,000.  In 18 states, median household income dropped. Nevada saw the biggest dip at 6 percent. During the period from 2009 to 2010, 35 states showed decreases in household income.

While fewer states showed a drop in income this time around, the study suggests that income inequality in the U.S. is on the rise. The Census reported that income inequality rose in 20 states. The 2010 study only showed an increase in 9 states.  The five states with the highest levels of income inequality were California, Connecticut, Florida, Louisiana and New York.

Poverty: Majority of states saw no increase in poverty rate

In 2011 more than 15 percent of the U.S. had incomes below the poverty level.  Seventeen states saw an increase in the number of people living in poverty. For 10 of these states, this is the third year in a row with an increase. The report also shows a jump in individuals living near poverty and  in deep poverty.

“The percentage of people in the United States with income below 125 percent of their poverty threshold increased from 20.1 percent to 20.8 percent between 2010 and 2011. During the same time period, the percentage of people with income below 50 percent of their poverty threshold increased from 6.8 percent to 7.1 percent.”

-Poverty: 2010 and 2011, American Community Survey Briefs - U.S. Census Bureau

New Hampshire had the lowest poverty rate at 8.8 percent. Maryland, New Jersey and Alaska also had  lower poverty rates.  Mississippi had the highest rate at 22.6 percent with New Mexico coming in 2nd at 21.5 percent.

Poverty rates in large metro areas crept to almost 37 percent. McAllen-Edinburg-Mission, Texas had the highest rate at 37.7 percent, while the Washington metro area had the lowest rate at 8.8 percent. The metro numbers may be the most relevant indicators because a large portion of the population lives in these areas.

“More than 80 percent of the U.S. population lives in one of the 366 metropolitan areas and about two-thirds of the total U.S. popula­tion reside in these largest areas.”

-Poverty: 2010 and 2011, American Community Survey Briefs - U.S. Census Bureau

Twenty-seven states  saw neither a rise nor a fall in the number of people living in poverty or at the poverty line.  

Want yet another way to measure income inequality without crunching numbers? Read about disparity-by-tree-cover here.

About the author

John Ketchum is an assistant producer for Marketplace’s wealth & poverty desk.

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