January 26, 2006. New studies find that New York has the most unequal income distribution of the 50 states. And the situation in the Empire State has gotten much worse over the last two decades. This is among the findings of a new report from FPI, Pulling Apart in New York: An Analysis of Income Trends in New York, by the Fiscal Policy Institute. Also see Pulling Apart: A State-by-State Analysis of Income Trends, a new analysis of income trends in the 50 states by the Center on Budget and Policy Priorities and the Economic Policy Institute. FPI release below.
Gap Between New York’s Wealthiest and Poorest is Widest in the Nation
Over the past two decades, a huge gap has opened up between rich and poor in New York State, according to a major new report. In the early 1980s families in the top 20 percent made five-and-a-half times as much as those in the bottom 20 percent. By the early 2000s the top earners made over eight times as much.
On this measure of top to bottom inequality, New York has the most unequal income distribution of any of the 50 states, according to the study, which is being released by the Fiscal Policy Institute in coordination with a national study by the Center on Budget and Policy Priorities and the Economic Policy Institute. In the early 1980s, New York State ranked 11th in income inequality. The report also shows new data on New York City, where inequality is even more extreme than in the state as a whole.
“We used to think of income inequality as a typically Southern problem,” said Trudi Renwick, Fiscal Policy Institute senior economist and principal author of the study. “In the early 1980s, seven out of ten of the most unequal states located in the South. New York was more unequal than most industrial states, but it wasn’t in the top 10. And this is one top-ten list we don’t want to be on.”
Over the last twenty years, through two full cycles of expansion and recession in the economy, the rich got significantly richer, while poor families saw only minimal increases in their standard of living. The average income of the richest 20 percent of New Yorkers increased from $79,000 to $130,000 over 20 years (in 2002 dollars)—an increase of 65%—while the average income of the bottom fifth went just from $14,000 to $16,000.
“If the bottom quintile had grown as quickly as the top during these past twenty years, families who have incomes of $16,000 today would instead have incomes of over $23,000, an increase of 65% instead of 13%,” according to James Parrott, deputy director and chief economist of the institute.
“The time has certainly come for New York’s business and government leaders to address the implications of a growing income inequality not only for our economy, but also for our democracy,” said Frank Mauro, executive director of the Fiscal Policy Institute.