For all the commotion recently about income inequality in America, it’s surprising how little attention has been paid to where the rich poor gap is worst and where it’s getting worst. Thanks to the 24/7WallSt.com website and the Census bureau, we have some answers – and the results are darned interesting politically, to say the least.
According to figures released this week by the 24/7WallSt folks, from worst to “best,” here are the ten states in which middle-class household incomes fell by the greatest percentages between 2009 (the current U.S. economic recovery started in the middle of that year) and 2013:
Does anything strike you as unusual about this list? Give yourself a gold star if you answered that most of these states voted for avowed income-inequality scourge Barack Obama for president in 2012 over avowed income-inequality scrooge (remember the “47 percent”?) Mitt Romney. Indeed, all of the six worst states by this measure were Obama states. Only Louisiana, Idaho, and Indiana went for Romney.
Now this isn’t the only way to measure income inequality. Economists use a gauge called the Gini Index to gauge it on both static and dynamic bases. Last fall, the Census Bureau reported on the states’ performances by this standard, and here are the ten most inequal states in descending order of inequality, along with their Gini scores:
New York (0.510)
FLorida, Georgia, and Massachusetts (tied at 0.484)
New Jersey (0.480)
Again, only three of these states (Louisiana, Georgia, and Texas) voted for Romney in 2012. Incidentally, Census also provided figures for the District of Columbia (an Obama stronghold) and Puerto Rico (which can’t vote in federal elections), and they both led the nation in inequality by far (with scores of 0.510 and 0.547, respectively). FYI, the national U.S. Gini score (unweighted by state) is 0.481.
Now unquestionably many disparate reasons explain these results – most obviously, that so many of America’s super-rich (plus best-educated) have congregated in the New York City metropolitan area, California, Washington, D.C., and the Boston area (which extends into some of New England). But the 24/7WallSt data also tells us that these bastions of liberalism and progressivism have been peculiarly ineffective at preventing middle-income families from losing out during the current recovery.
As I’ve stated before, I’m not entirely convinced that income inequality per se should be a major national policy focus (as opposed to falling real incomes for the great majority of Americans). I’m even less sure of the policy implications that flow from the above pattern of inequality. What I am certain of, however, is that if politicians do go after the rich-poor gap in some serious way (and the jury remains way out, at best, on that score), these data indicate that they’re bound to fail if they take a one-size-fits-all approach.