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Income inequality rises in all 50 states

Freddie Allen | 2/9/2015, 8:30 a.m.
Income inequality is rising and it affects workers in every state, according to a new report by the Economic Policy ...
Lakia Wilson, a guidance counselor from Detroit, Michigan, said that even though you hear on television that the economy is coming back, it hasn’t come back for everyone. Freddie Allen

WASHINGTON (NNPA) – Income inequality is rising and it affects workers in every state, according to a new report by the Economic Policy Institute.

Researchers from EPI, a nonpartisan think tank focused on low- and middle-income workers, analyzed Internal Revenue Service data for all 50 states and found that not only was the income gap between the top 1 percent of earners and everyone else getting wider, but that the disparities were not just confined to financial centers in the east or technology centers on the west coast.

All workers took a hit during the Great Recession, but top earners have recovered faster than low- and middle-income earners. According to the report, the top 1 percent of earners captured all of the income gains (100 percent) in 17 states following the Great Recession.

And Blacks live disproportionately in states that experienced the greatest income inequality.

In seven of those states where the top 1 percent captured 100 percent of the income growth since the Great Recession, the share of the population that is Black is higher than the national average. Those states include Delaware (22.1 percent), Florida (16.7 percent), South Carolina (27.9 percent), North Carolina (22 percent), Louisiana (32.4 percent), Virginia (19.7 percent) and New York (17.5 percent).

With the exception of Texas, where Blacks account for 12.4 percent of the population, the Black population is higher than the national average in states where the top 1 percent collected at least 80 percent of the income growth including Illinois, Arkansas, Michigan, New Jersey and Maryland.

Mark Price, an economist at the Keystone Research Center in Harrisburg, Pennsylvania, said in a statement that state leaders and policymakers need to realize that inequality is a problem everywhere.

“If states are not passing progressive taxes and raising revenue from top earners, they are missing out on a large and growing source of income,” Price said.

Researchers found the greatest disparities between the top 1 percent and the rest of workers in New York and Connecticut where the top 1 percent earned 48 times more than the bottom 99 percent.

Disparities exist in every state.

“Even in the 10 states with the smallest gaps between the top 1 percent and bottom 99 percent in 2012, the top 1 percent earned between 14 and 19 times the income of the bottom 99 percent,” EPI reported.

Estelle Sommeiller, a socio-economist at the Institute for Research in Economic and Social Sciences in Greater Paris, France, and co-author of the report, said that every state and every region in the United States is going to have to grapple with the effects of rising inequality.

“Our study paints a picture of the top 1 percent in each state. While there are differences from the 1 percent nationally, no state has escaped the troubling growth of inequality.”

The report comes on the heels of President Barack Obama’s State of the Union address where he urged employers to invest in their workforce and to pay employees overtime that they earned.

“And to everyone in this Congress who still refuses to raise the minimum wage, I say this: If you truly believe you could work full-time and support a family on less than $15,000 a year, try it,” Obama urged. “If not, vote to give millions of the hardest-working people in America a raise.”