The U.S. wealth gap is worse than it’s been in 50 years, new Census Bureau figures show.
And what are the key reasons?
Economists speaking to the Associated Press mainly blamed three things: demographics, since baby boomers are approaching the peak of their earnings as they age; wealthy families benefiting from a tax cut passed by a Republican-controlled Congress in 2017; and sluggish wage growth.
Income inequality — determined by a globally used measurement called the Gini index — grew from 2017 to 2018, from 0.482 to 0.485, according to American Community Survey Data. The nation’s level of income inequality has been consistently increasing over the last 50 years.
Using the Gini index, a perfectly equal country would record an inequality score of 0. The most economically equal countries, including Ukraine, Finland and Norway, trend toward scores lower than 0.30, according to the World Bank. (In 1967, according to the earliest data available from the Census Bureau, the U.S. ranked at 0.397.) But today, the U.S. is approaching income-inequality levels seen in developing countries like Uganda and Nigeria.
While the U.S. poverty rate has actually dropped slightly and unemployment is at a record low, the cost of living is also increasing in many cities across the country due to a decline in affordable housing and a rise in health care costs.
“We’ve had a period of sustained economic growth, and there are winners and losers. The winners tend to be at the top,” Donna Ginther, an economist at the University of Kansas, told the AP. “Even though we are at full employment, wages really haven’t gone up much in the recovery.”
The states that saw increases in inequality, according to the Census Bureau, were Alabama, Arkansas, California, Kansas, Nebraska, New Hampshire, New Mexico, Texas and Virginia. Still, the states that have long maintained unusually high levels of inequality — New York, California, the District of Columbia — continued to outpace the rest of the U.S. Utah, Alaska, Iowa, and the Dakotas were among the most economically equal states.
Cover: Residents of Metropolitan Gardens, Alabama's largest public housing project, can see shiny downtown bank towers from the windows of 55 dilapidated, red-brick apartment buildings, pictured here on Jan. 12, 2001 in Birmingham, Ala. The 910 units in the project - some of which are 60 years old -will be replaced with about 600 townhouses for rent and purchase. Only 260 or so homes will be offered as low-cost public housing, meaning many current residents must either move up or move on. The $35 million program is part of HOPE VI, a U.S. Housing and Urban Development plan to replace the nation's worst housing projects with new, mixed-income residences. (AP Photo/Dave Martin)