Income inequality has widened in all 50 states in the last few decades. More recently, as the United States recovered from the latest recession, the gap between the richest and poorest residents in many states has increased. From 2009 to 2012, a period of economic recovery in the U.S., income growth has varied considerably between states but not between income brackets. Top earners have disproportionately captured the bulk of the income growth across all states.

Based on “The Increasingly Unequal States of America,” a report published by the Economic Policy Institute (EPI), 24/7 Wall St. reviewed the 10 states where incomes of the top 1% of earners grew the fastest from 2009 to 2012. Income was measured before taxes and included income from wages, salaries, pensions, profits, dividends, interest, rents, and realized capital gains. All government transfers as well as non-taxable benefits were excluded from income figures.

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Over the 2009-2012 period, 105.5% of all of the income growth was captured by the top 1%. In other words, the top 1% of earners captured all of the growth, and more, as incomes of other cohorts declined. Additionally, the top 1% of earners accounted for at least half of income growth in 39 states over that time. In four of the 10 states — California, Colorado, Michigan, and Massachusetts — average income increased exclusively for the top 1%, while it declined for the bottom 99%. West Virginia was the only state where the income growth among the bottom 99% exceeded that of the top 1%.

No income bracket reported faster income growth than the top 1% in any of the 10 states. The richest 20% of earners in these 10 states also had fast-growing incomes. Incomes among the top quintile grew by at least 1.3% in seven of the 10 states from 2009 to 2013, versus the comparable national growth rate of 0.4%.

People living in the states where incomes among the top 1% grew the fastest from 2009 to 2012 also had relatively high incomes across the board. The median household income in all but four of the 10 states exceeded the national median income of $52,250 in 2013.

While members of the financial sector and leaders of major corporations were among the hardest hit by the Great Recession, they also experienced the strongest recovery. In an interview with 24/7 Wall St., Mark Price, coauthor of the study and a labor economist at the Keystone Research Center, explained that in these states as well as across the nation, the financial and top management sectors were the primary drivers of income growth among the top 1%. Price explained that states with lower concentrations of people working in the financial industry were actually much less likely to have fast-growing incomes among the top 1%.

Price explained that compensation for labor has accounted for the vast majority of income growth, even among top earners. However, that compensation often takes very different forms, and in many cases is closely tied to stock market performance. “One of the key drivers of course is the way in which top executives are compensated, these complicated schemes of stock options,” Price said.

Another way for many among the top 1% of earners — such as top managers and members of the financial sector — to add to their incomes is through dividends and returns on investments. Growth in dividend payments from 2009 through 2012 accounted for 26.2% of the aggregate personal income growth nationwide. At the state level, the comparable figure in six of the 10 states exceeded the national average contribution.

According to Price, not only do top earners “have a bit more economic power and are able to extract gains,” but “the pattern of the last 35 years is that the top actually does better in recovery.” As the rich continue to become richer, it only becomes more difficult for middle and low earners to catch up. Price explained that in the mid 20th century, when the economy expanded during a recovery, the bulk of income growth was captured by the bottom 99% of earners. Now, however, the middle class is not going to catch up “unless something fundamentally changes about the economy.”

To identify the 10 states where the rich are getting richer, 24/7 Wall St. reviewed average real income growth from 2009 through 2012 among the top 1% of earners in each state. This data, as well as average real income growth for all residents and the bottom 99%, average incomes, top to bottom ratios (the relationship between average income among the top 1% and bottom 99% of earners), and income thresholds also came from “The Increasingly Unequal States of America,” a study by Estelle Sommeiller and Mark Price published by the EPI. The authors derived average income growth from taxable income data, net of inflation. We also reviewed unemployment data from the Bureau of Labor Statistics and an assortment of figures from the U.S. Census Bureau’s 2013 American Community Survey. In addition, we looked at the Bureau of Economic Analysis’ quarterly personal income detailing wages and salaries, dividend, and total personal income including government transfer payments such as Social Security benefits and unemployment insurance.

These are the states where the rich are getting richer.

10. South Dakota
> Income growth, top 1% 2009-2012: 42.7%
> Income growth, bottom 99% 2009-2012: 7.0% (2nd highest)
> Avg. income top 1%: $1,249,327 (14th highest)
> Avg. income bottom 99%: $50,089 (13th highest)

Incomes among South Dakota residents earning at least $404,010 in 2012 — the threshold of the state’s top 1% — grew by 42.7% from 2009 to 2012, the 10th fastest growth rate in the country. Everyone else’s income grew much slower, although the growth rate was still relatively high. The average income of the bottom 99% grew by 7.0%, the second fastest nationwide. Among all residents, personal income grew by 12.7% in that time, faster than in every state except for North Dakota. One component of income, wages, grew in South Dakota by 13.5% from 2009 to 2013, fourth fastest in the nation. Meanwhile, the dividend growth rate, another component of income, was the slowest in the country from 2009 to 2012. The 1% captured 53.4% of income growth in South Dakota during 2009-12, not a particularly large share relative to other states. Yet, the average income of the top 1%, which reached $1,249,327 in 2012, was one of the higher incomes and almost 25 times the average income of the bottom 99% of $50,089.

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9. Washington
> Income growth, top 1% 2009-2012: 45.0%
> Income growth, bottom 99% 2009-2012: -3.5% (4th lowest)
> Avg. income top 1%: $1,272,313 (13th highest)
> Avg. income bottom 99%: $47,517 (16th highest)

Average real income in Washington grew by 3.9% overall from 2009 to 2012, a faster pace than in all but 12 other states. The incomes of the top 1%, though, rose by 45% over the period, as they grabbed 175% of the state’s income growth, one of the largest shares nationwide. By contrast, the income of the bottom 99% contracted by 3.5%, nearly the worst decline. Within Washington’s top 1%, the average income of the state’s top 0.01% was $34,885,599, just over 27 times the average income of the entire top 1%. The dividends component of income represented 27.8% of total income growth in Washington from 2009 to 2012, 17th highest in the country. Another component, wages and salaries, grew 12% from 2009 to 2013, 10th largest improvement in the nation.

8. Massachusetts
> Income growth, top 1% 2009-2012: 46.8%
> Income growth, bottom 99% 2009-2012: -1.5% (10th lowest)
> Avg. income top 1%: $1,819,077 (4th highest)
> Avg. income bottom 99%: $52,758 (7th highest)

Massachusetts was one of 17 states where the total income of the bottom 99% of earners declined from 2009 to 2012. Nonetheless, the average annual income of the bottom 99% was $52,758 in 2012, seventh highest in the nation. The average total annual income of the top 1% in the state was $1.8 million in 2012, 34.5 times as much as the bottom 99%. This was the seventh highest gap in the nation. Dividend income in Massachusetts grew by $52.2 billion from 2009 to 2012, the eighth highest nominal growth in the country. With 40.3% of residents holding at least a bachelor’s degree, Massachusetts was the best educated state in the nation, which may have helped raise wages. The Bay State’s wages and salaries grew by 11.9% during 2009-12, the 12th largest growth rate in the nation.

7. Michigan
> Income growth, top 1% 2009-2012: 47.3%
> Income growth, bottom 99% 2009-2012: 1.8% (24th lowest)
> Avg. income top 1%: $942,993 (24th lowest)
> Avg. income bottom 99%: $37,324 (11th lowest)

The average total income of Michigan’s top 1% was $942,993 in 2012, middle of the pack compared with other states. However, because the income of the lowest 99% in the state was just $37,324 in 2012, the income gap was still one of the largest — the top 1% earned 25.3 times what the bottom 99% did. Only 24.3% of the income growth between 2009 and 2012 in the state was provided by dividends, a relatively low share compared to other states. With a reviving manufacturing sector — particularly the auto industry — Michigan had one of the top 10 salaries and wage growth rates from 2009 to 2013. Within the top 1%, the top 0.01% of earners in the Great Lakes State had an average income of $23,501,671, which was in the middle of the pack among all 50 states but almost 25 times the average income of the top 1% in 2012.

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6. Nebraska
> Income growth, top 1% 2009-2012: 47.7%
> Income growth, bottom 99% 2009-2012: 2.4% (21st highest)
> Avg. income top 1%: $1,106,763 (20th highest)
> Avg. income bottom 99%: $51,654 (10th highest)

The annual average income of Nebraska’s top 1% grew by 47.7% from 2009 to $1.1 million in 2012, 20th highest in the country. Still, the top 1% captured 74.9% of all income growth in the state during 2009-2012. At the same time, the average income of the bottom 99% increased 2.4% to $51,654 in 2012, the 10th highest average income in the nation for that group. The average income among top earners in Nebraska was 21.4 times the income of the bottom 99%, the 21st smallest gap in the country. Wages for all Nebraskans grew by less than 10% from 2009 to 2013, one of the weaker wage growth rates in the nation.

5. Colorado
> Income growth, top 1% 2009-2012: 48.4%
> Income growth, bottom 99% 2009-2012: -1.0% (17th lowest)
> Avg. income top 1%: $1,347,381 (12th highest)
> Avg. income bottom 99%: $50,367 (12th highest)

Like most of the 10 states where the rich are getting richer, Colorado is one of the better educated states in the nation. Nearly 38% of its residents held a bachelor’s degrees or higher in 2013, higher than in every state except for Massachusetts. The state’s top 1% of earners had the fifth largest income growth from 2009 to 2012. The income growth of the top-earning Coloradans represented 112.6% of all income growth in the state during the period, one of the highest figures. Meanwhile, income of the bottom 99% fell 1%. As the wealthiest Americans tend to rely more heavily on unearned income, dividend growth in Colorado may account in part for the disparate income growth. Dividends paid to Colorado residents grew by 29.9% from 2009 through 2012, 11th highest in the country.

4. California
> Income growth, top 1% 2009-2012: 49.6%
> Income growth, bottom 99% 2009-2012: -3.0% (6th lowest)
> Avg. income top 1%: $1,598,161 (5th highest)
> Avg. income bottom 99%: $45,775 (21st highest)

The average income growth rate of the top 1% in the Golden State was 49.6%, almost 53 percentage points more than the growth rate of the state’s bottom 99%, whose incomes contracted by 3.0%. The state’s top 1% had an average income of $1.6 million in 2012, fifth highest in the country, while the average income of the bottom 1% was $45,775. The income of the top 1% was 34.9 times the income of the bottom 99%, the fifth highest gap in the country. California has the second highest concentration of information jobs — second only to Colorado. The concentration is largely due to the presence of Silicon Valley where some of the highest-paying jobs in the nation can be found. Dividend payments to Californians grew by nearly $300 billion from 2009 to 2012, by far the largest growth in the nation. As the most populous state in the country, California paid more in total wages in 2013 than any other state. Wage payouts increased by $404.1 billion from 2012 to 2013, the largest nominal increase.

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3. Texas
> Income growth, top 1% 2009-2012: 50.2%
> Income growth, bottom 99% 2009-2012: 1.7% (23rd lowest)
> Avg. income top 1%: $1,499,944 (8th highest)
> Avg. income bottom 99%: $46,102 (19th highest)

Average real income in Texas grew by 50.2% from 2009 to 2012, with 86.8% of that growth going to the top 1%. The average annual income of the top 1% was just under $1.5 million in 2012, while the average income of the bottom 99% was $46,102, a difference of $1.45 million, one of the largest such gaps. Texas had the third highest percentage of jobs in the high-paying construction sector, which may account for the high wages across the state. The BLS reported strong growth in the construction sector from 2010, which may partly explain Texas’ wage grow rate of 16.8% from 2009 through 2013. Texas also had the second fastest nominal wage growth in the nation for that period, due in large part to its status as the second most populous state in the country. Aggregate dividends paid to Texans rose by $169.8 billion from 2009 to 2012, the second highest increase in the country. Much of this growth likely went to the top 1%, who rely on unearned income far more than people in lower income brackets.

2. North Dakota
> Income growth, top 1% 2009-2012: 103.6%
> Income growth, bottom 99% 2009-2012: 21.2% (the highest)
> Avg. income top 1%: $1,566,183 (6th highest)
> Avg. income bottom 99%: $59,931 (3rd highest)

The average income of North Dakota’s top 1% grew by 103.6% during 2009-12, second most in the country. By 2012, the average income of the state’s top 1% of earners was $1,556,183, sixth highest in the country. This was also just over $1.5 million more than the average income of the state’s bottom 99%. Overall average income in North Dakota increased by 32.4%, the largest growth rate in the country from 2009-12. The mining and construction sectors have grown dramatically in North Dakota since 2009 and largely account for the spike in income growth. Compensation for labor was a huge driver. However, dividends, which are mostly enjoyed by top earners, grew by $9.4 billion from 2009 to 2012, higher than the wage and salary increase of $8.13 billion.

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1. Wyoming
> Income growth, top 1% 2009-2012: 283.60%
> Income growth, bottom 99% 2009-2012: n/a
> Avg. income top 1%: $5,078,696 (the highest)
> Avg. income bottom 99%: n/a

The average annual income of the top 1% in Wyoming was the nation’s highest at $5.1 million in 2012, driven in large part by unearned income — dividends rather than wages. Nearly half of all personal income growth from 2009 through 2012 was from dividend payments. This was the largest share in the country, perhaps not surprising for a state that counts members of the Walton family, owners of Wal-Mart, among its residents. Inequality widened dramatically in Wyoming during 2009-12, as the income of the top 1% grew by a staggering 283.6%. This was almost certainly due to the fortunes of just a handful of individuals. According to a national magazine ranking, there are six billionaires in Wyoming. In a state with such a small population, these individuals have a substantial impact on income figures.

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