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Census: U.S. inequality grows, including in New Hampshire

  • FILE-In this Tuesday, Jan. 27, 2015 file photo, Terry, cleans out his tent at a large homeless encampment, near downtown St. Louis. The gap between the haves and have-nots in the United States grew last year. Income inequality in the United States expanded from 2017 to 2018, with several heartland states among the leaders of the increase, even though several wealthy coastal states still had the most inequality overall, according to figures released Thursday, Sept. 26, 2019, by the U.S. Census Bureau. (AP Photo/Jeff Roberson) Jeff Roberson

Associated Press
Published: 9/26/2019 2:44:25 PM

The gap between the haves and have-nots in the United States grew last year to its highest level in more than 50 years of tracking income inequality, according to U.S. Census Bureau figures released Thursday.

Income inequality in the United States expanded from 2017 to 2018, with New Hampshire among the states with the largest increases.

The news comes as no surprise to New Hampshire economists, who pointed to a wage decline among the state’s lowest-paid workers despite years of economic growth and record employment in the state.

“In straightforward terms, those individuals in the state making the median wage or less actually have less purchasing power than … before the Great Recession,” according to a recent report from the New Hampshire Fiscal Policy Institute. “Individuals consistently making less than the median wage of $20.95 per hour in 2018 have experienced what feels like a pay cut compared to the past.”

The report found that the largest gains in pay rates came to those who were making the most in the first place.

Due to similar trends, the nation’s Gini Index, which measures income inequality, has been rising steadily over the past five decades.

The Gini Index grew from 0.482 in 2017 to 0.485 last year, according to the bureau’s one-year American Community Survey data. The Gini Index is on a scale of 0 to 1; a score of “0” indicates perfect equality, while a score of 1 indicates perfect inequality, where one household has all the income.

The inequality expansion last year took place at the same time median household income nationwide increased to almost $62,000, the highest ever measured by the American Community Survey. 

A big factor has to do with two large population groups on either end of the economic spectrum: On one side, are baby boomers at the peak of their earnings, and on the other side are millennials and Gen Zers, who are in the early stages of their work life and have lower salaries, according to Sean Snaith, an economist at the University of Central Florida..

The areas with the most income inequality last year were coastal regions with large amounts of wealth — the District of Columbia, New York and Connecticut — as well as areas with great poverty: Puerto Rico and Louisiana.

Three of the states with the biggest gains in inequality from 2017 to 2018 were places with large pockets of wealth: California, Texas and Virginia. But the other six states were primarily in the heartland: Alabama, Arkansas, Kansas, Nebraska, New Hampshire and New Mexico.

While some states have raised the minimum wage, other states such as New Hampshire and Kansas haven’t. At the same time, the sustained economic growth from the recession a decade ago has enriched people who own stocks, property and other assets, and have sources of income other than wages, said Donna Ginther, an economist at the University of Kansas.

“We’ve had a period of sustained economic growth, and there are winners and losers. The winners tend to be at the top,” Ginther said. “Even though we are at full employment, wages really haven’t gone up much in the recovery.”

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