Last year, income inequality in America reached its highest level since the Census Bureau started tracking it in 1967, according to federal data released Thursday.

In the midst of the longest economic expansion that the United States has ever seen, with poverty and unemployment rates at historic lows, the separation between rich and poor from 2017 and 2018 was greater than it has ever been, federal data show.

The gulf is starkest in wealthy coastal areas such as Washington, D.C.; New York; Connecticut; and California, as well as in areas with widespread poverty like Puerto Rico and Louisiana.

Alaska, Utah and Wyoming have the lowest, or best, level of inequality, while Nebraska and Iowa tie for sixth best, according to Census data compiled by the University of Nebraska at Omaha’s Center for Public Affairs Research.

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The Gini index measures wealth distribution across a population, with zero representing total equality and 1 representing total inequality, where all wealth is concentrated in a single household. The indicator has been rising steadily during the past several decades. When the Census Bureau began studying income inequality more than 50 years ago, the Gini index was 0.397. In 2018, the Gini index rose to 0.485.

By comparison, no European country had a Gini index greater than 0.38 between 2017 and 2018.

Recent economic gains by lower-income workers who have found jobs and benefited from minimum-wage increases in many states have not been enough to close the long-running trend of the wealthy seeing far larger income growth than middle- or lower-income earners. The number of families earning $15,000 or less has fallen since 2007, according to the latest census data, while the number of households bringing in $250,000 a year or more has grown more than 15%.

Though the gap between the richest and poorest expanded, the nation’s median household income topped $63,000 for the first time — though after adjusting for inflation, it’s roughly the same as it was 20 years ago.

The persistent rise in inequality has become a central topic in the 2020 presidential race, with candidates like Bernie Sanders and Elizabeth Warren calling for a wealth tax. This week, Sanders announced his plan for a wealth tax as high as 8% on the ultrawealthy, which would raise $4.35 trillion over a decade, according to analysis by economists who consulted with the Warren and Sanders campaigns.

“There should be no billionaires,” Sanders tweeted to announce his plan. “We are going to tax their extreme wealth and invest in working people.”

World-Herald staff writer Henry J. Cordes contributed to this report.


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