Inequality is everywhere. No state in the country has managed to prevent the top 1 percent from gaining a greater share of the nation’s income.
But few have seen their economies so riven by inequality as Massachusetts. Top earners in the state make about 30 times as much as the bottom 99 percent. That’s higher than 44 other states.
The bleak state-by-state picture is laid out in a new report from the left-leaning Economic Policy Institute, which has combed through the latest available tax returns (from 2013) to figure out who’s really benefiting from our slow-moving economic recovery.
And the results aren’t pretty — even if they have become darkly familiar.
The worst cases are nearby New York and Connecticut, but these days, all paths seem to lead to higher inequality. It doesn’t matter whether you’re a hub of high finance (like New York),information technology (like California), gambling (Nevada), or warm-weather retirement communities (Florida). Inequality is everywhere on the march.
Being a 1 percenter means something different in each state. To crack that club in Massachusetts requires earnings of about $540,000.
In New Mexico, you’d need less than half that amount. But these differences between states are dwarfed by the universally widening gap between the top 1 percent and everyone else.
EPI did find evidence of a slight decline in inequality between 2012 and 2013, but it partly attributes that to tax avoidance strategies. And in any event, it was barely enough to register in the broader trends.
From 2009 to 2013, about 85 percent of all the gains made by the US economy landed in the pockets of the 1 percent.
Massachusetts matched this pattern almost exactly, with top-earning households claiming 83 cents of every new dollar.
In some places, things were even more uneven. In fact, there were 15 states — spanning from Connecticut to Wyoming — where the 1 percent are the only people who benefited from the 2009-2013 period of the recovery. Average incomes fell for everyone else.
And this isn’t the way expansions are supposed to go. In the past, there really was such a thing as trickle-down growth. Prior to 1980, the bottom 99 percent of families received the lion’s share of gains during economic recoveries — across the country and in Massachusetts.
Somehow, this doesn’t seem to happen anymore. And that simple fact has blunted the longstanding argument that the best way to boost the welfare of the poor and middle-class is to stimulate economic growth. Given that growth increasingly seems to enrich the already-rich, it seems like something else is needed to rebalance the US economy — policies that target inequality more directly, like support for unions, a stronger minimum wage, or more generous tax-and-transfer programs.
Now, it’s possible things have already improved since 2013.
For instance, here in Massachusetts the minimum wage has jumped from $8 to $10 an hour since 2013. We know, from other sources, that this increase has helped boost wages among low-income workers, and it’s possible it could also be stemming the rise of inequality. Around the country, there’s a growing movement to push the minimum wage as high as $15 per hour, which would be another anti-inequality step.
Still, these kinds of changes are relatively narrow, and there’s little reason to think recent years have really turned the tide against economic inequality.
There’s nothing inevitable about inequality — we fought it once before, in the middle of the 20th century, and with the right mix of policies we could probably do so again.
But the other big takeaway is that we remain near the historic high-water mark. Today, Massachusetts is about as unequal as we were at the height of the Roaring Twenties, before the fall into the Great Depression.Evan Horowitz digs through data to find information that illuminates the policy issues facing Massachusetts and the U.S. He can be reached at email@example.com. Follow him on Twitter @GlobeHorowitz.