Land of the Free and Home of the Unequal Income

A new report released last month by the Economic Policy Institute displays data on the extensive income inequality across the United States. With the gap between the rich and the poor increasingly widening, traversing what CityLab best describes as an income “chasm” can be exceptionally difficult for those at the bottom of the income distribution. A person’s ability to improve her economic security is inextricably linked to income and as the rungs in the ladder move further and further apart, the more momentum required to make the leap and the higher the risk of never scrambling to the next step. The share of all income controlled by the top 1 percent of the U.S. population has steadily increased for the past thirty years, climbing to 21.1 percent, the highest concentration of wealth controlled by the top 1 percent since before the Great Depression.

How did this happen?

Since the 1970s, those already at the top have reaped the benefits of productivity gains, while those lower on the distribution didn’t, as worker wages didn’t keep pace with increasing productivity. Because of the difficulty of upward economic movement, those at the top often stay where they are—and so do those on the lower end.

Income inequality in the South

Inequality varies across the South and from state to state and continues to be a pressing issue for many Americans. The stickiness at the top and bottom is a national issue, but it’s particularly problematic in the South, even though what you need to make to be considered in the top 1 percent is much lower here than in other parts of the country.

NC Income Inequality

In North Carolina, Kentucky, and Mississippi, an income of less than $330,000 would, at minimum, put you in the top 1 percent, while in some New England states like Connecticut and New Jersey, the top 1percent starts at more than $600,000. New York has the highest rate of income inequality, with the top 1 percent making 45.4 times more than the other 99. That 1 percent collects almost a third of New York’s entire income.

So while the South’s income inequality might not be as drastic as other areas, it’s harder to move up here than anywhere else—in large part because of policies that have concentrated affluence and poverty in different places, limited investment in public education and infrastructure, and reinforced racial inequity that limits the mobility of a large portion of Southerners. The South is home to centers of economic and cultural growth, but also elevated levels of poverty and socioeconomic stagnation.

With the right tools and resources, Southern states can work to alleviate the burden of income inequity and make upward mobility an achievable reality. Financial empowerment efforts to address the racial wealth gap and local programs to build strong connections between education and career advancement are key to creating a region where people can thrive—no matter where they start.