This Is the State With the Widest Income Gap

By Douglas A. McIntyre Published Oct 22, 9:30AM EDT

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This Is the State With the Widest Income Gap — © A-Basler / Getty Images

How many people were lifted out of poverty by programs that put $400 billion into the COVID-19-damaged economy? According to the Supplemental Poverty Measure (SPM) from the U.S. Census Bureau, the total was 11.7 million in 2020, a remarkable number.

Even with this advance, the richest Americans have done better recently. The top 10% of Americans based on net worth hold 69.8% of the total wealth across the U.S. population. The top 1% hold 32.1%

Income inequality varies considerably within the United States, and in some parts of the country it is far more pronounced than in others.

Using data from the U.S. Census Bureau’s 2019 American Community Survey, 24/7 Wall St. identified the state with the widest income gap. States are ranked by their Gini coefficient, a measure of income inequality based on the distribution of income across a population on a 0 to 1 scale, with 0 representing perfect equality and 1 representing the highest possible level of inequality.
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Depending on the state, income inequality ranges from a Gini score of 0.427 to 0.515. Nationwide, the Gini coefficient stands at 0.481.

The causes of rising inequality are complex and varied. A report published by the National Bureau of Economic Research ties the rising disparity to a range of economic factors, including globalization, technological advancement, a stagnant minimum wage and the decline of labor unions.

The state with the widest income gap is New York. Here are the details:

Gini index: 0.515
Average household income, top 20%: $291,906 (fifth highest)
Average household income, bottom 20%: $13,372 (13th lowest)
Share of all income that went to top 20%: 54.4% (the highest)
Share of all income that went to bottom 20%: 2.5% (the lowest)
Median household income: $72,108 (14th highest)

Methodology: To determine the state with the widest income gaps, 24/7 Wall St. reviewed one-year estimates of the Gini Index of income inequality from the U.S. Census Bureau’s 2019 American Community Survey (ACS).

The Gini Index of income inequality summarizes income dispersion in an area on a scale from 0 to 1. A value of 0 indicates perfect equality; that is, everyone in the area receives an equal share of income. A value of 1 indicates perfect inequality; that is, only one recipient receives all the income.

States were ranked based on their Gini Index. Additional information on average household income by quintile, share of aggregate household income by quintile and median household income are also one-year estimates from the 2019 ACS.

Click here to see all the states with the widest income gaps.
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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.