Useful Stats: Income inequality across the states

Income inequality in the U.S. has increased from 2006 to 2022, according to American Community Survey (ACS) data. While it’s increased in the nation as a whole, it decreased in North Dakota, Washington, Hawaii, Nebraska, and Montana from 2018 to 2022. New York and Washington, D.C. lead the nation in income inequality. This edition of Useful Stats explores state-level Gini index data from the U.S. Census Bureau’s ACS, analyzed by the State Health Access Data Assistance Center (SHADAC) at the University of Minnesota.

The Gini index (or coefficient) is a summary measure of income inequality, ranging from zero (perfect equality) to 1 (perfect inequality).[1] Perfect equality, or a Gini index value of zero, represents a situation where everyone receives an equal share of income, while perfect inequality (Gini index = 1) represents a single individual or group receiving all income. Read more about the Gini index in the World Bank’s glossary.

Gini index values by state

The U.S. national Gini index has risen from 0.46 in 2006 to 0.486 in 2022, peaking in 2014 at 0.49. An increase in the Gini index value represents a shift towards further inequality.

New York (Gini index = 0.5208), Connecticut (0.5008), Massachusetts (0.4975), California (0.4953), and Louisiana (0.4915) were the states with the highest Gini coefficients in 2022; Washington, D.C. (0.5111) had the second largest value, behind only New York.

Figure 1 below maps out the Gini index for each state and Washington, D.C., for all available years between 2006 and 2022. Note that due to pandemic-related disruptions, data is not available for 2020.

Figure 1: State-level Gini index values, 2006-2022

Change in Gini values over time

Over the past five years of available data, from 2018-2022, Delaware (-4%), Wyoming (-3%), D.C. (-3%), New Mexico (-2%), and Georgia (-2%) have shifted the most towards equality. In other words, their gini values have decreased, moving closer to zero.

During the same 5-year period, North Dakota (6%), Washington (4%), Hawaii, Nebraska, and Montana (each 3%) moved the most towards inequality relative to their 2018 values.

The Gini values of ten states and Washington, D.C. decreased—becoming relatively more equal—while 17 stayed comparable (within a half-percent) and twenty-three states’ values increased. Refer to Figure 2 below for more information on other states and periods.

With approximately half of the states increasing and half staying the same or decreasing, the data suggests the pandemic did not negatively impact income equality. However, it is important to recognize that the Gini index is just one metric and must be interpreted cautiously. SSTI coverage of other metrics related to the pandemic can be found at their respective links: unemployment, labor force and job opening metrics, GDP, and VC activity (more can be found on SSTI’s website).

Figure 2: Five, ten, and fifteen-year percentage change in Gini values by state.

From 2013-2022, the latest 10-year period of available data, a significantly less positive trend can be seen; a total of 10 states and Washington, D.C. had decreased Gini values, while eight stayed comparable and 32 increased.

Of those which decreased in Gini values, Washington, D.C. (-4%), Rhode Island (-3%), and Tennessee and Delaware (each -2%) had the largest changes. Those that increased Gini values—trending towards inequality—were led by Wyoming (6%), Nebraska (5%), West Virginia, Alaska, and Nevada (each 4%).

Looking back even further, comparing the change between 2008 and 2022, only two states (Delaware, -2%; Colorado, -1%) and Washington, D.C. (-5%) improved towards greater equality. A total of 45 states increased Gini values, led by Nevada (9%), Washington 8%), Nebraska, Alaska, and West Virginia (each 7%). The remaining three state’s values were comparable between the two years.

Refer to the above map for more details. All data can be found on the State Health Compare website under income inequality.

This article was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce.