WV Center on Budget and Policy > Blog > Economy > Income Inequality Continues to Grow in West Virginia

Income Inequality Continues to Grow in West Virginia

A new report from the Economic Analysis and Research Network takes a deep look at income inequality, by focusing on how the top 1 percent in each state have fared over 1917–2011. The report finds that not only is income inequality on the rise nationally, but each of the 50 states has experienced growing income inequality over the past few decades. Some of the overall findings include:

  • Between 1979 and 2007, the top 1 percent took over half of the total increase in U.S. income.
  • All 50 states experienced an increase in their top 1%’s share of total income since 1979.
  • The growth in income inequality started in the latter half of the 20th century, the share of income held by the top 1 percent declined in every state but one between 1928 and 1979.

Data on all income groups in each state can be downloaded here, and the report also included an interactive feature for each state.

While income inequality is often associated with Wall Street, bankers, and the financial sector, the report shows that is not the case. Income inequality is growing in every state, including West Virginia, making it a Main Street problem, not just a Wall Street problem.

So what does income inequality look like in West Virginia? Between 1979 and 2011 the average real income in the state grew just 3.9%, which is pretty bad compared to the national average of 14.8%. But over that time period, all of the income growth was gained by the top 1% of richest West Virginians. The average real income for the top 1% grew by nearly 71%, while the average real income for the bottom 99% fell by almost 3%.

growth

Because of that lopsided income growth, the share of income held by the top 1% in West Virginia has steadily grown since 1979, and is reaching historically high levels.

top 1 1917-2011 no caption

Now, West Virginia’s economy has grown more top-heavy than ever. As the figure below shows, the share of income held by the top 1% grew from 9.2% in 1979 to 15.2% in 2011. It also shows the income gap widening. In 1979 the average income of the top 1% was 10.1 times higher than the average income of the bottom 99%. By 2011, that ratio had grown to 17.7 times higher.

output_Pb86Iz

Source: Estelle Sommeiller and Mark Price, The Increasingly Unequal States of America: Income Inequality by State, 1917 to 2011, an Economic Analysis and Research Network (EARN) report

As the report shows, the economy isn’t growing for the vast majority of the country. The prosperity that has been produced over the past decades hasn’t been shared with all of those who have helped create it. And without policies to help create a more shared prosperity, there is no sign that trend will stop.

Leave a Comment