Income inequality rose to the highest level since the Census Bureau began tracking it more than 50 years ago, NPR reports.
Even though the median US income hit a record high in 2018, income inequality was “significantly higher” in 2018 than in 2017, the bureau said. The level had not risen significantly since 2013.
Though many states did not experience a change, the states that saw the most rising inequality were Alabama, Arkansas, California, Kansas, Nebraska, New Hampshire, New Mexico, Texas, and Virginia.
William Rodgers III, the chief economist at the Rutgers University Heldrich Center, told NPR that it was worrying that the rise in inequality came amid low unemployment and sustained GDP growth.
The data, he said, "clearly illustrates the inability of the current economic expansion, the longest on record, to lessen inequality."
How is income inequality calculated?
“Income inequality is measured through the Gini index, which measures how far apart incomes are from each other,” NPR explained. “To do that, the index assigns a hypothetical score of 0.0 to a population in which incomes are distributed perfectly evenly and a score of 1.0 to a population where only one household gets all of the income. In the U.S., the Gini index figure had been holding steady for the past several years. But it moved from 0.482 in 2017 to 0.485 in 2018. While that change may seem small, it's statistically significant, the Census Bureau says. The agency notes that back in 2006, the figure stood at 0.464.”
Median income misleading:
The Census data shows that the median income in the US increased to a record high of $61,937 in 2018, but 29 states and Puerto Rico still have median household incomes lower than the median.
The data also shows that the number of people living in poverty, or earning less than $15,000, continued to fall but the rich got richer. The number of households earning $250,000 or more grew by 15 percent since 2007, The Washington Post reported.