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August 25, 2019Cart

Business

by Fairfield County Business Journal
by FCBJ

New York and Connecticut are tops for income inequality

The gap between the haves and have-nots has become significantly wider. According to a new study released by the Economic Policy Institute (EPI), the nation is facing a level of income inequality not seen in 90 years, and the situation is especially acute in New York and Connecticut.

In 2015, the Internal Revenue Service determined that the top-earning households in the U.S. – the so-called “1 percent” – took home 22 percent of all income. The peak for this level of income disparity was in 1928, when the record share was 23.9 percent of income. But in the EPI report, titled “The New Gilded Age: Income Inequality in the U.S. by State, Metropolitan Area and County,” New York led the states with the top 1 percent holding a 31 percent share of income, followed by Florida at 28.5 percent and Connecticut at 27.3 percent. Among the nation’s major metro areas, the Bridgeport-Stamford-Norwalk corridor ranked fifth with the top 1 percent holding a 38.6 percent share of income.

Within Connecticut, Fairfield County was dubbed the most unequal county by the EPI researchers, with the top 1 percent making 62.2 times more than the bottom 99 percent. The average income of the top 1 percent for the county was $6.29 million, while the average income of the bottom 99 percent was $101,213. Fairfield County ranked 12th nationally followed by Westchester County in the ranking as 13th, with the top 1 percent recording an average income of $5.1 million and the bottom 99 percent averaging $89,408.

“The rise of top incomes relative to the bottom 99 percent represents a sharp reversal of the trend that prevailed in the mid-20th century,” wrote Estelle Sommeiller and Mark Price, the authors of the EPI report. “From 1928 to 1973, the share of income held by the top 1 percent declined in every state for which we have data. This earlier era was characterized by a rising minimum wage, low levels of unemployment after the 1930s, widespread collective bargaining in private industries (manufacturing, transportation, telecommunications and construction) and a cultural, political and legal environment that kept a lid on executive compensation in all sectors of the economy.”

Sommeiller and Price argued that in order to bridge the gap, “We need policies that return the economy to full employment and keep it there, return bargaining power to U.S. workers, increase political participation by all citizens, and boost public investments in child care, education, housing and health care. Such policies will help prevent the wealthiest few from appropriating more than their fair share of the nation’s expanding economic pie.”