Income Inequality By State 2020

Income includes the revenue from wages, salaries, interest on a savings account, dividends from shares of stock, rent, and profits from selling something for more than you paid for it. Income inequality refers to the extent to which income is distributed unevenly among a population.

The Gini coefficient, also called the Gini Index or Gini ratio, is a statistical measure of distribution intended to represent the income or wealth distribution of a nation. It ranges from 0 (0%) to 1 (100%), with 0 representing perfect equality and 1 representing perfect inequality. A higher Gini coefficient means greater inequality. The Gini coefficient would be zero is everyone in a nation had the same income.

The Gini coefficient is defined based on the Lorenz curve. The Lorenz curve plots the percentiles of the population on the horizontal axis of the graph according to income or wealth, whichever is being measured (income, in this case). The cumulative income of the population is plotted on the vertical axis.

The United States has a Gini coefficient of 0.485, the highest it has been in 50 years, according to the United States Census Bureau. Each state also has a Gini coefficient.

Zippia analyzed datasets from 2010 and 2016 from the American Community Survey and then analyzed the Gini coefficient for each state in both periods. Based on this, the five states with the highest income inequality in the United States are:

  1. New York (.5102)
  2. Connecticut (.4947)
  3. Louisiana (.4903)
  4. California (.4880)
  5. Florida (.4852)

All five of these states have a Gini coefficient that is higher than the U.S. Gini coefficient.

New York has the greatest income inequality in the United States. In 2015, the average income of the top 1% was $2.2 million and the average income of the bottom 99% was $49,617. This is a ratio of 44.4 to 1. Nationally, the numbers were $1.32 million for the top 1% and $50,107 for the bottom 99%, a ratio of 26.3 to 1.

The five states with the least income inequality are:

  1. Alaska (.4174)
  2. Utah (.4261)
  3. Wyoming (.4279)
  4. New Hampshire (.4344)
  5. Hawaii (.4369)

Despite these states being the least unequal in the U.S., their Gini coefficients are still higher than many countries around the world. Alaska is about as unequal as Russia.

Montana, California, Rhode Island, and Maine are experiencing the fastest changes in income inequality in the U.S. From 2010 to 2016, Montana’s Gini coefficient increased by .022, California’s increased by .019, and both Rhode Island’s and Maine’s increased by .018.

Income inequality has both economic and political impacts such as slower GDP growth, reduced income mobility, greater household debt, political polarization, and higher poverty rates. Crime has been shown to be correlated with inequality. The separation of society into the “elites” and the “masses” played a central role in the collapse of other advanced civilizations such as the Roman Empire.

The income inequailty of each state can be found on Zippia.

Income Inequality By State 2020

Source:
State 2020 Pop.
Alabama4,908,620
Alaska734,002
Arizona7,378,490
Arkansas3,039,000
California39,937,500
Colorado5,845,530
Connecticut3,563,080
Delaware982,895
District of Columbia720,687
Florida21,993,000
Georgia10,736,100
Hawaii1,412,690
Idaho1,826,160
Illinois12,659,700
Indiana6,745,350
Iowa3,179,850
Kansas2,910,360
Kentucky4,499,690
Louisiana4,645,180
Maine1,345,790
Maryland6,083,120
Massachusetts6,976,600
Michigan10,045,000
Minnesota5,700,670
Mississippi2,989,260
Missouri6,169,270
Montana1,086,760
Nebraska1,952,570
Nevada3,139,660
New Hampshire1,371,250
New Jersey8,936,570
New Mexico2,096,640
New York19,440,500
North Carolina10,611,900
North Dakota761,723
Ohio11,747,700
Oklahoma3,954,820
Oregon4,301,090
Pennsylvania12,820,900
Rhode Island1,056,160
South Carolina5,210,100
South Dakota903,027
Tennessee6,897,580
Texas29,472,300
Utah3,282,120
Vermont628,061
Virginia8,626,210
Washington7,797,100
West Virginia1,778,070
Wisconsin5,851,750
Wyoming567,025