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Census: U.S. inequality grew, including in heartland states

ORLANDO, Fla.— 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 several heartland states among the leaders of the increase, even though several wealthy coastal states still had the most inequality overall, according to the figures.

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 increase in income inequality comes as two Democratic presidential candidates, U.S. Sens. Bernie Sanders and Elizabeth Warren, are pitching a “wealth tax” on the nation’s richest citizens as a way to reduce wealth disparities.

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. But the 0.8 percent income increase from 2017 to 2018 was much smaller compared to increases in the previous three years, according to the bureau.

Even though household income increased, it was distributed unevenly, with the wealthiest helped possibly by a tax cut passed by Congress in 2017, said Hector Sandoval, an economist at the University of Florida.

“In 2018, the unemployment rate was already low, and the labor market was getting tight, resulting in higher wages. This can explain the increase in the median household income,” Sandoval said. “However, the increase in the Gini index shows that the distribution became more unequal. That is, top income earners got even larger increases in their income, and one of the reasons for that might well be the tax cut.”

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