The “1%” label has become synonymous for wealth inequality and economic injustice, warning of the rise of a new global elite. But at what point do you actually become a member of the economic aristocracy?
According to a report released by the Economic Policy Institute, it depends on what state you live in.
The paper, which examines income inequality in every U.S. state, shows that disparity between 99% of earners and the top 1% varies wildly from state to state.
Connecticut tops the EPI’s report as the state with the highest 1% threshold. Residents have to earn at least $678,000 to be considered a member of the Nutmeg State’s economic elite. The Huffington Post‘s Emily Cohn notes that Connecticut also happens to also be the state with the worst inequality: There, the top 1% of earners “make on average about 51 times as much as the bottom 99 percent of earners.”
According to the EPI, Connecticut is also closely followed by New York, where top earners make 48 times as much as residents, on average. Chances are, this disparity in New York and Connecticut comes from the concentration of occupants who work in the financial sector: Many Wall Street workers reside in Connecticut and commute into New York.
You don’t have to work on Wall Street to join the 1% in America: In Hawaii, you have to earn $278,718 to be considered an elitist. Hawaii also has the smallest gap between the 1% percent and everyone else, with the richest making only 14.6 times as much as everybody else.
The EPI is careful to note that the rise of the 1% is not just a symptom of growing gains on Wall Street, but growing gains by top earners in every state. The report notes that between 1979 and 2007, the top 1% of taxpayers in all states captured an increasing share of income, and from 2009 to 2012, in the wake of the Great Recession, the highest 1% incomes in most states once again grew faster than the incomes of the bottom 99%.
“Growing inequality blocks living standards growth for the middle class,” report authors Estelle Sommeiller and Mark Price write. “Additionally, increased inequality may eventually reduce intergenerational income mobility. More than in most other advanced countries, in America the children of affluent parents grow up to be affluent, and the children of the poor remain poor. …Can rising inequality be tolerated in a country that values so dearly the ideal that all people should have opportunity to succeed, regardless of the circumstances of their birth?”
According to the EPI: No, it cannot. “In the next decade, something must give,” the authors conclude. “Either America must accept that the American dream of widespread economic mobility is dead, or new policies must emerge that will begin to restore broadly shared prosperity.”
Source: Economic Policy Institute
h/t Huffington Post