Data from the Federal Reserve shows that the so-called K-shaped economy in America is alive and well, with low- and middle-income households falling further behind as the richest Americans pull away.
The top 1% of households owned 31.7% of all U.S. wealth in the third quarter of 2025, the highest share on record since the Federal Reserve began tracking household wealth in 1989. That share has increased even as wealth growth for the rest of the population has stalled or slowed, the data shows.
Collectively, the wealthiest 1% held about $55 trillion in assets in the third quarter of 2025 — roughly equal to the wealth held by the bottom 90% of Americans combined.
“Household wealth is highly concentrated and becoming steadily more concentrated,” Mark Zandi, chief economist at financial research firm Moody’s Analytics, told CBS News.
The latest snapshot of wealth inequality comes as billionaire fortunes continue to grow rapidly, both in the U.S. and abroad. An Oxfam International report released this week found that billionaire wealth in 2025 increased three times faster than the average annual rate over the previous five years.
The world’s richest person is Tesla CEO Elon Musk, whose net worth stands at $668 billion, according to the Bloomberg Billionaires Index.
What’s driving the growing divide
Widening wealth inequality isn’t new to the U.S., with the trend reaching back decades. However, the gap between the rich and the poor has become more skewed since the pandemic, according to Zandi.
Consumer spending patterns underscore those disparities. In the second quarter of 2025, the top 10% of income earners accounted for nearly half of all U.S. consumer spending, according to Zandi’s analysis of Federal Reserve data.
The growing divide is being driven in part by surging stock prices, Zandi said.
The stock market posted strong gains last year, thanks in large part to investments in artificial intelligence. Wealthier households tend to benefit most from bull markets because a larger share of their wealth is invested in stocks and other securities.
According to Gallup, 87% of Americans who own stocks are adults living in households earning $100,000 or more.
Middle-income households, on the other hand, tend to have their wealth tied up in their homes, and house price growth has been slowing, Zandi added. Lower-income Americans are struggling with higher debt loads, he said.
Uneven wage growth is also contributing to the divide. Higher-income Americans have seen their wages grow at a stronger clip than other income groups. Bank of America data shows that higher-income households’ wage growth grew at 3% rate in December 2025, compared to 1.5% and 1.1% for middle- and low-income households.
A proposed billionaire wealth tax in California is sparking debate over whether the measure, if passed, would lead to more harm than good if ultrawealthy residents in the state flee to other locales.
Under the proposed ballot initiative, California would institute a one-time tax of 5% on the state’s estimated 255 billionaires. While wealth taxes aren’t new, the proposal has sparked pushback from some of America’s richest citizens and their allies, who claim it could drive the state’s billionaires to leave the state and discourage entrepreneurs from creating businesses.
By contrast, advocates of the tax emphasize that billionaires’ fortunes are growing much faster than the income of ordinary Americans.
“The billionaire class had their wealth nearly triple in the last six years, and a one-time wealth tax will only put a 5% constraint on their wealth accumulation,” Omar Ocampo, a researcher at the left-leaning Institute for Policy Studies, told CBS News. “It will not significantly impact their lives, their consumption or spending habits.”
Others warn that California could face a revenue shortfall if the state’s wealthiest residents — who already pay relatively high tax rates — decamp for other states to avoid the tax.
Gov. Gavin Newsom has previously opposed earlier wealth tax proposals in the state, saying that the idea is “going nowhere in California,” while billionaire hedge fund manager Bill Ackman, a New York resident, spoke out against the California proposal in a December 29 social media post.
“I am opposed to wealth taxes because they effectively represent an expropriation of private property and have many unintended and negative consequences that have occurred in every country that has launched such a tax,” Ackman wrote.
Here’s what to know about the proposed California billionaire tax and its potential economic impact.
What is the billionaire wealth tax?
The billionaire wealth tax is a proposed ballot measure created by the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), a union representing more than 120,000 health care workers and patients in California.
If passed, the measure would levy a one-time 5% tax on the wealth of the state’s billionaires, although it would not tax their income. According to California’s attorney general, the tax would be applied to assets including:
Businesses
Securities such as stocks and bonds
Art
Collectibles
Intellectual property
Real estate and some pensions and retirement accounts also would be excluded from the tax.
If voters pass the initiative, billionaires in the state would have to pay the tax in 2027, although they could opt to spread the payments across five years for an additional annual nondeductible charge of 7.5% of the remaining unpaid balance, according to the text of the proposal.
How would the tax revenue be used?
About 90 cents of every $1 raised by the tax would be spent on health care, while the remaining 10 cents would be earmarked for food assistance or education, the proposal states.
According to the SEIU-UHW, the impetus for the billionaire tax stems from the Republicans’ “big, beautiful” tax and spending law, which includes about $1 trillion in spending cuts over the next decade to Medicaid, the health care program for low-income Americans. Medi-Cal, California’s Medicaid program, is slated to lose $190 billion in funding over the next decade due to those cuts, according to the proposal.
“The purpose of the 2026 Billionaire Tax Act … is to protect access to high-quality, equitable health care, and to support funding for kindergarten through grade fourteen public education and food assistance programs, by raising revenue from a one-time tax on billionaire wealth,” the proposal states.
How much money could the billionaire tax raise for California?
California would likely raise “tens of billions of dollars from the wealth tax,” according to a Dec. 11 analysis by the state’s nonpartisan Legislative Analyst’s Office.
However, the group noted that quantifying the exact amount potentially raised by the tax is difficult because it’s unclear what actions billionaires might take to reduce their tax burden, and because much of their wealth is based on stock prices, which continuously fluctuate, the analysis noted.
What steps are needed to pass the wealth tax?
First, the measure needs to collect enough signatures to get on the ballot, with Ballotpedia putting the number at about 875,000. If it draws sufficient public support, the measure would appear on the state’s ballot in the November general election.
Once on the ballot, the measure would pass if it received a majority approval.
Do the rich move when facing wealth taxes?
Some critics of wealth taxes contend that such policies drive rich Americans to move to low-tax states. Yet previous research has found that millionaires generally don’t relocate just to get a tax cut.
Massachusetts offers a recent example. The state introduced a 4% tax on millionaires in 2023, with the new revenue helping fund free school lunch for the state’s schoolchildren. While some millionaires may have left to avoid the tax, a May analysis from the Institute for Policy Studies found that the number of millionaires in Massachusetts rose nearly 39% in the two years after the tax took effect.
Have any billionaires announced plans to move over the California tax proposal?
It is unclear whether a one-time tax on billionaires, with their much deeper bank accounts, could spur an exodus in the state. Critics of the proposal have noted that tech billionaire Peter Thiel announced on Dec. 31 that his private investment firm, Thiel Capital, has opened a Miami office.
The new location “will complement Thiel Capital’s existing operations in Los Angeles, California,” according to the statement, which didn’t mention the California proposal.
Craft Ventures, a venture capital firm co-founded in 2017 by billionaire tech investor David Sacks said on December 31 that it had opened a new office in Austin, Texas. The firm added that Sacks, who also serves as a White House adviser on AI and cryptocurrency, had relocated to Austin earlier that month, although it didn’t mention the proposed wealth tax. He had previously resided in San Francisco.
A growing share of lower-income Americans are struggling to get by financially as their wages fail to keep up with inflation, according to a recent analysis.
Roughly 29% of lower-income households are living paycheck to paycheck, up slightly from 2024 and from 27.1% in 2023, data from the Bank of America Institute shows. The financial firm defines that as spending more than 95% of household income on necessities such as housing, gasoline, groceries, utility bills and internet service.
In 2025, nearly a quarter of all U.S. households lived paycheck to paycheck, Bank of America estimates. Several factors explain why many people are falling behind.
First, the nation’s inflation rate this year has edged up to an annual rate of 3% after dipping to 2.3% in April. The rise in consumer prices this year is well below their pandemic-era peak of 9.1% in 2022, but remains above the Federal Reserve’s target rate of 2%.
“Inflation is picking back up again, and cost increases are picking back up again,” said Joe Wadford, an economist at the Bank of America Institute, which recently examined the financial pressures facing Americans by income. “That’s definitely going to put some renewed pressure on those households.”
Second, the cost of groceries and other essentials is continuing to rise as lower-wage workers see their paychecks and purchasing power stagnate. In October, wages for lower-income households were up only 1% from a year ago, according to Bank of America deposit data.
“The gap between their wages and expenses has just continued to widen since the beginning of the year,” Wadford said. “When the cost of living is increasing 3% but your wages are only increasing 1%, you’re just going to really struggle to keep up.”
Lower-wage workers experienced strong wage growth during the pandemic and subsequent economic recovery, but that rise has slowed sharply since late 2022, according to Elise Gould, senior economist at the Economic Policy Institute. One factor weighing on wage growth — a decline in job openings and the rate at which workers are leaving their jobs.
“When people aren’t looking for other offers or quitting, that is going to cause wage growth to slow,” she said.
While lower-income households are struggling to scrape by, middle- and higher-income households are on firmer financial footing, buoyed by stronger wage growth. This group has seen little to no increase in the share of households living paycheck to paycheck, the Bank of America Institute found.
“These higher-income cohorts are more able to absorb the recent reacceleration in inflation due to their outsized wage growth,” Wadford wrote in the report.
That bifurcation is fueling what economists refer to as the “K-shaped economy,” a term experts use to describe the divergence in spending and financial health between wealthier Americans and people with more modest incomes.
Gould also noted that many low-income Americans are unbanked and that Bank of America’s findings, which are drawn from an analysis of its depositor data, may not fully capture the impact of slowing wage growth on poor households.
“You’re missing some of the bottom end and how much pain [and] economic distress they may be feeling,” she said.
To understand how Americans are faring economically these days, it’s helpful to consider the eleventh letter of the alphabet.
Experts describe the current U.S. economy as “K-shaped,” a reference to the divergent fortunes of wealthier consumers compared with people lower down the ladder. The upward-slanting stroke of the “K” represents the ongoing trend of strong spending and healthy income growth among upper-income Americans.
By contrast, the letter’s lower-slanting stroke points to the multiple financial strains facing low- and middle-income people, from stubborn inflation and prohibitively expensive homes to surging credit card debt and high health insurance costs.
This bifurcation of the economy isn’t a new phenomenon, with inequality on the rise since the 1980s, noted Mark Zandi, chief economist at financial research firm Moody’s Analytics. But the divide in income and wealth has grown more skewed since the pandemic, reflecting the “growing gap between the wealthy and the well-to-do and everyone else,” he said. “It’s taken off.”
Several trends help explain what’s behind the emergence of a K-shaped economy.
Consumer spending
Consumer spending — which drives over two-thirds of economic activity — is growing overall in the U.S. These days, however, a large and growing share of that commercial activity is driven by upwardly mobile Americans. In the second quarter of 2025, the top 10% of income earners accounted for almost half of all spending, according to an analysis of Federal Reserve data by Zandi.
“That group has always accounted for a much larger share of spending, but that share has risen significantly over time, and now is the highest it’s ever been in the data,” he told CBS News.
Other data tells a similar tale. In September, spending by lower-income households grew 0.6% from a year ago, compared with 2.6% for higher-income consumers, according to a recent report from the Bank of America Institute.
Spending on U.S. luxury fashion was also up 8% year-over-year in October, according to the bank’s data — another sign that wealthier households are driving spending.
“Younger, less affluent households are facing ongoing challenges, while older, wealthier consumers are driving overall spending growth,” said Grace Zwemmer, an associate economist at investment advisory firm Oxford Economics.
Record stock prices
Because much of their income is held in stock and other securities, affluent Americans have particularly benefited from this year’s run-up in financial markets, which have notched record after record largely on the strength of investor excitement about artificial intelligence.
A May Gallup poll found that 87% of Americans who own stock live in households with incomes of $100,000 or more. The top 1% of income earners — who on average earn around $731,000 per year, according to personal finance site SmartAsset — own nearly half of corporate securities and mutual funds, Federal Reserve Bank of St. Louis data shows.
A bullish stock market also benefits the millions of employees with 401(k), mutual funds and other investments, but does much less to lift the many Americans without such holdings, said Tuan Nguyen, an economist at RSM US, an audit, tax and consulting firm.
“For lower- and middle-income people, especially the ones that live paycheck to paycheck, the rally in the equity markets might not be relatable to them because they are facing higher inflation and lower wage growth,” he said.
Of late, better-heeled Americans have also seen stronger pay gains. According to the Bank of America Institute, the rate of wage growth for higher-income households in September rose to 4% year-over-year. Annualized pay growth for lower-income households as of August fell to 0.9%, the lowest since the financial giant started tracking the data in 2016, said Taylor Bowley, an economist at the Bank of America Institute.
What lower-income people “see from the grocery store, from the gas stations, is that prices are going up while their wages are not going up,” Nguyen added.
Lower-income households also face a toxic stew of inflation, credit card debt, student loans and mortgage loans, sapping their spending power. They also feel the pinch of a slowing job market more acutely than high-income groups, Zandi told CBS News.
“They may have a job, although if they lose one, they’re having a harder and harder time getting back into the labor market,” he said.
A single mother who relied on federal food assistance lost her benefits in 2020 after Kentucky investigators concluded she’d committed fraud.
The state alleged she had made multiple same-day purchases, tried to overdraw her account a few times, entered a few invalid PINs and sometimes made “whole-dollar” purchases that are unlikely during typical grocery runs.
The woman from Salyersville in Appalachian Kentucky had an explanation: She worked at the store. She would sometimes buy lunch there and then get groceries after work. Her child would also occasionally use her card.
An administrative hearing officer kicked her off the Supplemental Nutrition Assistance Program (SNAP) regardless, based solely on the allegedly suspicious shopping pattern. She sued — and won.
“It is draconian to take away SNAP benefits from a single mother without clear and convincing evidence that intentional trafficking was occurring during a time when food scarcity is so prevalent,” Franklin County Judge Thomas Wingate said in his 2023 decision.
A surge of disqualifications
Over the last five years, the Kentucky Cabinet for Health and Family Services has brought hundreds of fraud cases that are heavily reliant on transactional data with the goal of revoking people’s food benefits.
Judges, lawyers and legal experts said in interviews and in court documents that such evidence proves little. Kentucky Public Radio reviewed dozens of administrative hearing decisions and court documents from the last five years in which the cabinet relied on shopping patterns to prove a person had “trafficked,” or sold, their benefits.
Kentucky is so aggressive in disqualifying people from SNAP benefits that the state is second in the nation for per-capita administrative disqualifications, behind Florida, according to the most recent federal data from 2023.
In the last decade, disqualifications in Kentucky rose from fewer than 100 in 2015 to over 1,800 in 2023. And more than 300 others have been accused of selling or misusing their benefits since January 2024, according to records obtained by Kentucky Public Radio.
Another Franklin County judge in 2023 ordered the cabinet to stop disqualifying individuals based solely on transactional data, but since the decision, at least three lawsuits allege the health agency continues to bring such cases.
Transactional data alone cannot prove intent to commit fraud nor show the actual result of any individual transaction, University of Kentucky law professor Cory Dodds said, adding, “I’m not saying that folks didn’t do it, didn’t commit the fraud, but I don’t think the cabinet in a lot of these cases has met their burden of proof, either.”
Facing punishment, recipients are pressured to waive their hearings
Kentuckians receive notice of their alleged suspicious activity through mailed letters, in which they’re asked to voluntarily waive their right to a hearing and automatically accept the punishment. On first offense, that’s generally a one-year SNAP ban. They’re also required to repay the full amount the state says they misused.
Often, these cases involve a relatively small amount of money. Records show that more than 900 people have been kicked off for “trafficking” or misuse for less than $1,000 since 2022. The lowest amount alleged was 14 cents.
The state has leaned heavily on administrative hearing waivers since 2015, and by 2023, almost a quarter of all disqualifications were via waiver. Some lawsuits allege individuals did not fully understand the consequences of the waivers and were encouraged to sign by officials.
Kentucky Public Radio reviewed more than two dozen cases since 2020 in which the cabinet accused an individual of trafficking using only spending patterns, despite the participants’ denial or lack of response — and with no other evidence or interviews presented, according to administrative hearing decisions.
Kendra Steele, a spokesperson for the Cabinet for Health and Family Services, declined to schedule an interview with cabinet officials after multiple requests. Steele said in an email that “we have never” brought trafficking cases based solely on transactional data and acknowledged it would not be sufficient to prove intent.
In response to a different question, Steele wrote the investigation into fraud allegations consists of looking into income, living situations “and patterns of spending that are indicative of trafficking.” She did not indicate how any of those factors could be used to prove intentional misuse or selling of SNAP benefits, or how it differs from relying on transactional data — which is inherently a pattern of spending. Steele said in another email that they also interview vendors and SNAP recipients.
‘It’s our fellow Kentuckians who are going hungry’
Roughly 4 in 25 Kentuckians suffer from food insecurity, similar to the national rate of about 14%, according to an Associated Press analysis of U.S. Census Bureau and Feeding America data.
In the last fiscal year, 1 in 8 Kentuckians benefitted from SNAP, formerly called food stamps. Food insecurity in Kentucky’s rural areas is even more stark, and legal representation harder to come by.
“The people who benefit from these programs are some of the folks that we need to be helping the most in this country,” Dodds said. “It’s our fellow Kentuckians who are going hungry as a result of baseless allegations of waste, fraud and abuse.”
The cabinet denied KPR’s request for case notes on individual fraud accusations starting in early 2024 that would include the evidence used in the accusations. But administrative hearing decisions reviewed by KPR from 2020 through 2023 included evidence the cabinet relied on; hearing officers would frequently say a person had trafficked their benefits based on shopping patterns the state deemed suspicious.
Expert say officials overrely on purchase data
National legal experts who specialize in SNAP access say an overreliance on transactional data isn’t unique to Kentucky. Transactional data was initially meant as a tool to identify potential fraud cases — not as a means to prove it, Georgetown law professor David Super said.
He’s studied SNAP disqualifications for decades, and has seen many cases where he believes transactional data is misconstrued as direct evidence of wrongdoing, instead of requiring a state to build cases with witnesses, affidavits, video evidence and plea deals.
In one redacted 2023 state administrative hearing decision, a hearing officer decided a woman in the eastern Kentucky city of McKee had trafficked her benefits because she had made eight back-to-back transactions in a year. The decision also said she’d checked her balance several times, made a few insufficient fund attempts and had incorrectly entered her PIN number a few times.
She lost her SNAP benefits for a year. In an appeal, the woman told the state she has two kids and had recently discovered she was pregnant.
“Everyone forgets to get something and has to go back in the store and get it,” she wrote, defending her back-to-back purchases.
She received another hearing, but the outcome didn’t change.
Cabinet officials acknowledged in cross examinations during a 2023 case that back-to-back transactions and whole-dollar purchases aren’t forbidden under SNAP rules, nor are recipients told that the cabinet considers them suspicious.
But all of these things are used as evidence — sometimes the sole evidence — that a person misused their benefits.
Kristie Goff, an AppalRed legal aid lawyer in Prestonsburg in southeast Kentucky, used to see many of these cases, though they’ve declined in the last year.
“There have been very few instances in cases I have handled, where a client was not able to give me a perfectly reasonable explanation for those transactions, and none of it was trafficking,” Goff said. “There are no receipts, there’s no video footage to show that someone’s doing anything wrong. It’s just a number written on a paper.”
While saying purchasing history is insufficient to prove trafficking, Kentucky judges have stopped short of demanding that the state change how it trains employees or conducts its SNAP investigations.
State training materials focus almost entirely on purchase patterns
In response to an open records request, the cabinet provided KPR with documents used to train investigators on intentional program violations. They appear to almost exclusively discuss transactional data, including investigating back-to-back payments, large transactions and whole-dollar purchases.
In 2020, Michigan appellate judges decided transactional data alone is never sufficient to prove that a business — or person — fraudulently used SNAP benefits.
Dodds believes that should be the standard for all states, including Kentucky.
He is in the early stages of systematically reviewing thousands of SNAP benefit trafficking hearing decisions between 2020 and 2023. Data from about 700 decisions in 2020 alone already shows that many Kentuckians have been denied benefits before the state presents what he considers real evidence of guilt.
“There are maybe a handful of cases that I would say there was real evidence that they had done something wrong,” Dodds said. “There was one where a woman was on the phone with the hearing officer while she was actively trying to sell her benefits. … But cases with non-transactional data are exceedingly rare.”
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Associated Press data journalist Kasturi Pananjady contributed to this report.
The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education and the Robert Wood Johnson Foundation. The AP is solely responsible for all content.
Income inequality dipped, more people had college degrees, fewer people moved to a different home and the share of Asian and Hispanic residents increased in the United States last year, according to figures released Thursday by the U.S. Census Bureau.
These year-to-year changes, big and small, from 2023 to 2024 were captured in the bureau’s data from the American Community Survey, the largest annual audit of American life. The survey of 3.5 million households asks about more than 40 topics, including income, housing costs, veterans status, computer use, commuting, and education.
Here’s a look at how the United States changed last year.
Income inequality dips
Income inequality — or the gap between the highest and lowest earners — in the United States fell nationwide by nearly a half percent from 2023 to 2024, as median household income rose slightly, from $80,002 to $81,604.
Five Midwestern states — Iowa, Nebraska, Ohio, South Dakota and Wisconsin — had statistically significant dips, along with Georgia, Massachusetts, New Jersey, Oregon and Puerto Rico.
North Carolina was the only state to see a statistically significant rise in inequality. North Carolina State economist Michael Walden said it reflected the state generating high-paying jobs in tech and other professional sectors, while the post-pandemic labor shortage which raised wages in lower-paying service jobs had ended.
In South Dakota, which had a leading 4% drop, the inequality dip “could reflect stronger growth in the household income among lower and middle income households (or smaller growth in the income of the highest brackets),” state demographer Weiwei Zhang said Wednesday in an email.
In Nebraska, it could be high employment rates across all demographic groups since “high employment leads to income, thus less income inequality,” said Josie Schafer, director of the Center for Public Affairs Research at the University of Nebraska Omaha.
In Massachusetts, one of the traditional strengths of the state’s economy — high-paying jobs in life science, high tech and research — has been sluggish in the past two years, said Mark Melnik, director of economic and public policy research at a University of Massachusetts Amherst institute.
“The typical jobs in this industry are the kind of thing that helps Massachusetts have the highest per capita (income) in the country but also exacerbates some elements of income inequality,” Melnik said.
FILE – Dark storm clouds hang over TD Ameritrade Park and the Omaha skyline in Omaha, Neb., Friday, June 20, 2014, as the rain starts coming down. (AP Photo/Eric Francis, file)
Greater diversity and fewer people married
The United States became more demographically diverse, and fewer people were married from 2023 to 2024.
The non-Hispanic white population, who identify with only a single race, dropped from 57.1% to 56.3%, while the share of the nation’s Asian population rose from 6% to 6.3% and the Hispanic population rose from 19.4% to 20%. The rate of the Black population stayed the same at 12.1%, as did the American Indian Alaska Native alone population at 1%.
In the marriage department, the share of men who have never married increased from 37.2% to 37.6%, and it rose from 31.6% to 32.1% for women.
Fewer people moved, as costs of renting and owning homes rose
Last year, only 11% of U.S. residents moved to another home, compared to 11.3% in the previous year. The decline of people moving this decade has been part of a continuous slide as home prices have skyrocketed in some metros and interest rates have gone up. In 2019, by comparison, 13.7% of U.S. residents moved.
The monthly costs for U.S. homeowners with a mortgage rose to $2,035 from $1,960. Homeowners with a mortgage in California ($3,001), Hawaii ($2,937), New Jersey ($2,797), Massachusetts ($2,755), and the District of Columbia ($3,181) had the highest median monthly costs.
Costs for renters also increased as the median rent with utilities went from $1,448 to $1,487.
Online dating may be partially to blame for an increase in income inequality in the US in recent decades, according to a research paper.
Since the emergence of dating apps that allow people to look for a partner based on criteria including education, Americans have increasingly been marrying someone more like themselves. That accounts for about half of the rise in income inequality among households between 1980 and 2020, researchers from the Federal Reserve Banks of Dallas and St. Louis and Haverford College found.
Using data from the Census Bureau’s American Community Survey from 2008 to 2021, when online dating quickly became prevalent, the economists found that women became slightly more selective when choosing partners based on age, while men became slightly more selective based on education.
But when the researchers compared that with data on married couples from 1960 and 1980, they found that people in the recent period increasingly went for partners with the same wage and education levels. And while many people married someone of the same ethnicity, people became less and less selective on race over time.
Who people marry has a major impact on household income. The research shows that the two main contributors to inequality through the selection of a future spouse are education and skills. They are followed, to a much lesser extent, by income and age, while race plays a relatively inconsequential role, co-author Paulina Restrepo-Echavarría, an economic policy advisor at the St. Louis Fed, said in a blog post describing the paper.
Overall, the predominance of online apps to find a future partner has led to a 3-percentage-point increase in the Gini coefficient — a widely used measure of income inequality, the research shows.
“We find that the increase in income inequality over the past half a century is explained to a large extent by sorting on vertical characteristics, such as income and skill, and their interaction with education,” the economists wrote in their paper.
The state of the U.S. economy, all $26 trillion or so of it, will be one of the keys to determining whether Kamala Harris or Donald Trump wins the White House in November. Voters overwhelmingly say that it’s one of their top concerns, but when the economy is this large, the way politicians talk about it, as an issue, can change drastically over time. The last three years have been defined by inflation and high interest rates, and those are the primary concern for voters. It’s a stark turnaround from 2016, and even 2020, when Democrats made income inequality — especially the concentration of wealth among the wealthiest one percent — top concerns, as polarizing as it may have been for wealthy donors.
Amid that shift, Harris released a tax plan on Wednesday that signals that easing income inequality, at least as it is reinforced through the tax code, will not be one of her priorities. The Democratic nominee is backing away from President Joe Biden’s plan to hike capital-gains taxes on people who make more than $1 million a year to nearly 40 percent, she said during a campaign stop in New Hampshire. Instead, she plans to temper that increase to 28 percent. That number is a key political threshold. It’s the same rate that President Obama proposed (though, it applied to people with $500,000 in income), and the one that Ronald Reagan set back in 1986.
As far as tax hikes go, this is basically the dead center of the political middle ground. The policy is the centerpiece of a broader, business-friendly policy plan to spur 25 million new small businesses during a Harris administration. “We will tax capital gains at a rate that rewards investment in America’s innovators, founders, and small businesses,” she said in New Hampshire. Capital-gains taxes are lower than income taxes and apply to investments, making them so attractive for wealthy people whose net worth is largely tied up in stocks, bonds, and other assets. The current rate is 15 percent for most people, but can be as high as 20 percent for the wealthiest. For those who make over $1 million a year, Harris’s plan would change the all-in tax rate to 33 percent, according to the New York Times. (There’s also an additional 5 percent surtax on income below $1 million). That’s about ten percentage points higher than the Trump-era 23.8 percent, but 11 points lower than the proposed Biden plan.
Odds are, this won’t affect very many people. According to Credit Suisse, there are about 24.5 million people with $1 million or more in assets — like, say, a house. But only about 0.5 percent of households in the U.S. — roughly 635,000 out of 127 million — actually have annual income at that level. But that doesn’t mean its effects wouldn’t reverberate throughout the economy. In 2022, income inequality had actually decreased for the first time since 2007, according to the U.S. Census — thanks largely to the fall in incomes from the wealthy and the middle class during the pandemic. It would be wrong to say that a moderate hike in capital gains, rather than the near-doubling that Biden proposed, would make income inequality worse. But by looking back to the Obama and Reagan rate, it is, essentially, bringing back the status quo that exacerbated the problem in the first place.
If you want to know the secret to achieving happiness, the answer might be found in your bank account — as long as it’s extremely well-funded.
The link between happiness and money is getting a fresh look from economists and scientists, with new research finding multimillionaires are much happier than the merely well-to-do. In other words, the new study, from University of Pennsylvania’s Wharton School senior fellow Matthew Killingsworth, indicates that the more money you have, the happier you are — and there may be no ceiling.
Killingsworth’s latest research builds on his 2023 study that debunked a much-cited 2010 analysis claiming people’s happiness peaked at about $75,000 in annual income, or about $110,000 in today’s inflation-adjusted dollars. That 2023 research found that happiness does improve with higher earnings, but because the researchers lacked data for people earning above $500,000, it was unclear whether happiness topped out at that income.
Now, Killingsworth has found that happiness rises to even higher levels for the extremely rich, or those with assets between $3 million to $7.9 million, with their life satisfaction far exceeding that of people with mere six figure incomes. The implication is happiness continues to rise alongside one’s bank account, with no clear upper limit.
“The money-happiness curve continues rising well beyond $500,000 a year,” Killingsworth told CBS MoneyWatch in an email. “I think a big part of what’s happening is that when people have more money, they have more control over their lives.”
He added, “I suspect it’s much more fundamental and psychologically deeper than simply buying more stuff.”
The happiness scale
The new research is based on surveys that asked people to rate their life satisfaction from 1 to 7, with the lower end representing “not at all” happy to the top number indicating “extremely” satisfied. Low-income people earning about $30,000 or less gave their lives an average rating of about 4, while people earning about $500,000 rated their lives above 5.
But multimillionaires gave their life satisfaction an average rating closer to 6.
One question raised by the new research is whether wealth has a different impact on happiness than income. Wealth, for instance, may allow people to invest in themselves and their families, such as providing the means to fund children’s college educations or buy a bigger home in a better school district.
To be sure, a high income can also help with achieving those goals, but research indicates top earners aren’t immune from feeling financially stressed. For instance, one-third of people earning more than $150,000 say they are concerned about making ends meet, a higher share than those earning between $40,000 to $149,999, according to an April survey from the Federal Reserve Bank of Philadelphia.
“How wealth and income combine to explain why the wealthy people were so much happier is an open question. I’d guess that having wealth is helpful, but I can’t say for sure,” Killingsworth said.
Whether happiness might eventually plateau at some level of wealth or income is “hard to say,” although he said he’s working on additional analyses to examine that issue, he added.
Happiness and the 99%
But whether billionaires, for instance, could be even happier than multimillionaires isn’t the important takeaway from his research, Killingsworth noted, pointing out that the share of people in the U.S. whose wealth exceeds those in his analysis is “pretty small.”
“At some point, whether 0.1% versus 0.3% of people might be beyond some threshold becomes relevant only for a pretty small set of people, so I think showing the pattern I find here tells us a lot of what we should care about,” he noted.
Most Americans earn salaries linked with lower life satisfaction, given that the U.S. median annual income stands at about $75,000. To crack the top 1% of earners in the U.S. one must earn an annual income 10 times that, about $788,000.
“It certainly doesn’t look like half the population is already beyond the point where more money stops mattering, for example,” Killingsworth pointed out. That could matter for policymakers who want to improve their citizens’ well-being, since the research suggests there could be “huge ROI” by helping improve the financial situations of people with low incomes, he noted.
“A given amount of money appears to yield a lot more happiness for people who have less money to begin with,” Killingsworth said. “Economic trends in the U.S. seems to be moving in the opposite direction — the poorest folks have gained the least in recent decades, and the richest folks have gained the most.”
“One important point that isn’t obvious from this paper by itself is that money is just one of many things that matter for happiness,” he said. “So, I think it’s important for everyone – policy makers, executives, and regular people – to keep in mind that so many things matter besides money.”
And focusing solely on making money while ignoring other issues could create more harm than good, he added. Connections with friends and family may matter more to happiness, for example, given that Americans say these provide them with more meaning than material well-being, Pew Research Center has found
“It’s entirely possible to be rich and miserable or poor and happy,” Killingsworth noted. “The main reason is simply that lots of things matter for happiness besides money.”
He added, “But, all else equal, people tend to be happier the more money they have.”
Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
Many Americans aspire to join the ranks of the wealthy, but the income threshold for being considered rich depends a lot on where you live.
It also takes considerably more income to join the top 5% of earners than just a few years ago, according to new research from GoBankingRates.com, which examined state income data for the five-year period from 2017 to 2022. The latter year represents the most recent household income data from the U.S. Census Bureau.
The easiest place to reach the top of the heap is West Virginia, where an annual income of $329,620 will qualify you as among its highest earners. But you’ll have to earn more than twice that, at $719,253, to join the top 5% in Washington D.C.
Americans’ fortunes have improved during the last few years, partly due to the federal government’s pandemic stimulus efforts that doled out billions in aid to businesses and taxpayers, said Andrew Murray, lead data content researcher for GoBankingRates. At the same time, the nation’s top-earning households are gaining a greater share of income, fueling rising income inequality, Census data shows.
“COVID relief policies bolstered the economy, leading to boosted stock prices, real estate and savings,” Murray told CBS MoneyWatch. “These conditions were especially favorable for the wealthiest of Americans, who experienced dramatic income increases, especially considering the fact that many companies saw record profits.”
To be sure, income isn’t the same as wealth, which has also grown since the pandemic. But earning a higher salary can help families build their assets, allowing them to buy homes, invest in education for their children and take other steps to cement their wealth.
The outsized income growth of the nation’s top-earning families before and after the pandemic may be one of the U.S. economy’s most important storylines, Murray said.
“Even though the bottom 20% of earners saw drastic increases in pay, their overall wealth share in the country actually decreased, as the rich became much richer,” he said.
After West Virginia, Mississippi had the second-lowest threshold for joining its top-earning households, at $333,597, according to GoBankingRates.
Meanwhile, joining the 5% of earners requires considerably more in many Eastern states, with Connecticut’s threshold at $656,438 and New York at $621,301, the study found.
“This comes down to cost of living,” Murray said. “People in New York or D.C. are paid higher salaries than people in states with a lower cost of living, such as Arkansas or Louisiana.”
Between 2017 and 2022, Idaho, Nevada and Washington saw the biggest jumps in the amount needed to be considered among their states’ top earners, according to GoBankingRates. Idahoans require an extra $115,769 in annual income, while Nevadans need an additional $129,469. Washingtonians must earn $166,144 more to join the top 5%.
The reason is due to changes in the economies of Idaho, Nevada and Washington during the past few years, Murray said. Washington, for example, saw residents’ incomes rise 44% between 2017 and 2022, which Murray said is “likely due to Seattle’s rising reputation as a tech hub after COVID.”
“In the case of Nevada, which ranked number two studywide, gambling became more readily legalized and accessible from 2017 to 2022,” Murray said. “This led to major profit increases for companies headquartered in Las Vegas.”
Khristopher J. Brooks is a reporter for CBS MoneyWatch. He previously worked as a reporter for the Omaha World-Herald, Newsday and the Florida Times-Union. His reporting primarily focuses on the U.S. housing market, the business of sports and bankruptcy.
Photo courtesy Eimear Roy, Central Florida Jobs With Justice
Eimear Roy is a community leader and volunteer with Central Florida Jobs with Justice.
Floridians are being crushed by the soaring cost of living. Our energy bills are some of the most expensive in the nation, while our housing prices continue to grow year over year. Florida ranks in the top half of the U.S. for income inequality, which means that the rich are even richer and the poor even poorer in the Sunshine State.
Medical debt impacts all areas of my life. I have to choose between paying my energy bills or ignoring past-due medical payments. I haven’t taken my cardiac medicine in weeks because I need to put food on the table for my children. I moved here from Ireland, which was emerging from the aftermath of a time of great oppression, with the hope that the United States would provide opportunities for work, freedom and maybe even some ease for myself and my family. The huge optimism and drive of Americans is what attracted us, like many immigrants before us. However, in recent years, I’ve felt crippled by the injustices my family experienced and the neglect of our state and federal government.
Knowing I have debt makes me much less likely to seek care, which means that small health ailments often go ignored until they turn into much bigger, more costly chronic issues. People with medical debt often face debt in other areas of their lives. Among individuals reporting medical debt in the past year, 56% said they have credit card debt, 33% reported owing student loans, and 35% said they were unable to afford basic necessities such as food, heat and housing, according to a 2016 report from independent policy research organization KFF.
I know the feeling. Too many of us do.
I’m Irish, which means I speak my mind. I speak up when I witness injustices — not just for myself but for the good of my community. Fed up with the increasingly insurmountable medical debt my family was accruing, I organized with Central Florida Jobs with Justice and a group of community members to demand that Orange County relieve millions of medical debt for its residents.
The county had more than $23 million in uncommitted American Rescue Plan Act funds, with over $8.7 million eligible for debt forgiveness. In response to our organizing and pressure on the commission, we were able to get them to commit $4.5 million in ARPA funds, which will clear upward of 100,000 eligible residents (i.e., those over 400% of federal poverty guidelines) of their medical debt. While this is a huge relief for these community members, it’s not enough. The county will have to pick and choose who is the most in need of these funds, and because my family is on the higher end of the federal poverty qualifications, we likely won’t be part of debt relief. However, the county commission can clear medical debt for triple that number of Orange County residents, myself and my family included, by pledging the remaining funds.
When I think of a life without medical debt, I don’t think of buying a fancy car or going out to a nice restaurant. I think about the people who have swiped their card for me at the grocery store when my transaction was declined, and I think about paying it forward. I think about how much more present I could be for all the beauty and goodness this life has to offer if my mind weren’t constantly ravaged with worry about my house being foreclosed. Medical debt has prevented me from visiting my family for far too long; I think about going back to Ireland to see my dying dad one last time, to let him know that I’m still carrying on his fighting spirit, and that his tenacity is being carried through to future generations.
Floridians should have the freedom to pay for the care they need and put food on the table for their families. Working people deserve the right to provide for their families and take care of their health and security. Orange County has the opportunity to forgive medical debt for nearly 200,000 community members if it pledges the remaining $4.2 million to medical debt erasure.
In Ireland, there’s a proverb: Under the shelter of each other, people survive (Ar scáth a chéile a mhaireann na daoine). It is the core of my belief system around community and equity, because when we do more for others — it uplifts us all. Urge your commissioners to invest in the health, well-being and financial security of community members by investing the remaining ARPA funds in its community. Eimear Roy is a community leader and volunteer with Central Florida Jobs with Justice.
Texas’ attorney general filed a lawsuit on Tuesday seeking to stop a guaranteed income program set to start this month for Houston-area residents.
The program by Harris County, where Houston is located, is set to provide “no-strings-attached” $500 monthly cash payments to 1,928 county residents for 18 months. Those who qualified for the program must have a household income below 200% of the federal poverty line and need to live in one of the identified high-poverty zip codes.
The program is funded by $20.5 million from the American Rescue Plan, the pandemic relief law signed by President Joe Biden in 2021.
Federal pandemic funding has prompted dozens of cities and counties across the country to implement guaranteed income programs as ways to reduce poverty, lessen inequality and get people working.
In his lawsuit filed in civil court in Houston, Texas Attorney General Ken Paxton dubbed the program the “Harris Handout” and described it as a “socialist experiment” by county officials that violates the Texas Constitution and is “an illegal and illegitimate government overreach.”
“This scheme is plainly unconstitutional,” Paxton said in a statement. “Taxpayer money must be spent lawfully and used to advance the public interest, not merely redistributed with no accountability or reasonable expectation of a general benefit.”
State Sen. Paul Bettencourt, a Republican from Houston who had asked Paxton to look into the county’s program, called it an “unbelievable waste” of taxpayer dollars and “Lottery Socialism.”
Harris County officials pushed back on Paxton’s lawsuit, which is asking for a temporary restraining order to stop the program. The first payments were set to be distributed as early as April 24.
Harris County Judge Lina Hidalgo, the county’s top elected official, said guaranteed income is one of the oldest and most successful anti-poverty programs, and she feels “for these families whose plans and livelihoods are being caught up in political posturing by Trumpian leaders in Texas.”
“This lawsuit from Ken Paxton reads more like a MAGA manifesto than a legal document,” said Harris County Commissioner Rodney Ellis, who spearheaded the program, known as Uplift Harris.
Harris County Attorney Christian Menefee said the program “is about helping people in a real way by giving them direct cash assistance — something governments have always done.”
The lawsuit is the latest legal battle in recent years between Harris County, Texas’ biggest Democratic stronghold, and the GOP-dominated state government.
Elections in the nation’s third-most populous county have been scrutinized for several years now. The Texas Legislature passed new laws in 2023 seeking more influence over Harris County elections.
Last year, Texas took over the Houston school district, the state’s largest, after years of threats and lawsuits over student performance. Democrats assailed the move as political.
Austin and San Antonio have previously offered guaranteed income programs in Texas. El Paso County is set to roll out its own program later this year. No lawsuits have been filed against those programs.
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Although U.S. women still trail men when it comes to pay, they are pulling ahead financially in one important way of building wealth: homeownership.
A recent study from LendingTree shows that single women own 2.7 million more homes than their male counterparts, with roughly 13% of those women holding the titles to their homes, compared to 10% of men.
“A home for most people is going to represent the biggest portion of their overall net worth,” Jacob Channel, senior economist at LendingTree and author of the report, told CBS MoneyWatch. “Owning a home helps you access considerably more wealth.”
Women have historically faced social and economic barriers to wealth creation, and they continue to earn an average of just 82 cents for every dollar men earn for the same work, according to the Pew Research Center.
LendingTree’s study is based on an analysis of data from the U.S. Census Bureau’s 2022 American Community Survey and accounts for demographic factors including homeowners’ age, income, education and racial background.
According to LendingTree, single female homeowners outnumber their male peers in 47 states, with the rate of female homeownership as high as 15% in states like Delaware and Louisiana. However, single males owned more homes than single women in Alaska, North Dakota and South Dakota, likely because of the prevalence of male-dominated industries in those states, Channel said.
Home equity accounts for nearly 28% of household wealth on average, according to a 2020 U.S. Census Bureau report. Channel notes that most homes are owned by couples and families. And overall, American women’s net worth still falls well below that of men. According to the Federal Reserve Bank of St. Louis, the median wealth of women-headed households is 45% lower than those headed by men.
“If there’s one really important thing about this study, it’s that there’s a lot going on here that’s influencing women’s wealth, and we’ll need a lot more information before we can really definitively say why things are the way they are,” Channel said.
Elizabeth Napolitano is a freelance reporter at CBS MoneyWatch, where she covers business and technology news. She also writes for CoinDesk. Before joining CBS, she interned at NBC News’ BizTech Unit and worked on The Associated Press’ web scraping team.
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Meow. That’s the sound of 2023’s bull market getting swallowed up by the fat cats that make up the vast majority of stock-market wealth. How vast? Try a record 93% of value owned by the wealthiest 10% of society, according to no less an authority than the Federal Reserve.
It puts a different spin on the intense bull run that equities went on dating back to spring 2020, with the S&P 500 more than doubling in value, rising from 2,304 in March 2020 to close at 4,769 on the last trading day of last year. That figure even factors in the market slipping into a bona fide bear market in 2022 amid surging inflation and the souring of pandemic darlings, for instance the “crypto winter” and the end of meme-stock mania.
These figures are all the more remarkable considering that they are not equivalent to ratios of stock ownership. In fact, the number of Americans who hold any stocks at all also hit a record, with 58% of all Americans invested in equities in some form, also according to Fed data. This means that many of us own stock, but only the top 10% have truly valuable holdings.
The figures are a reminder that the rising tide of the past year hasn’t necessarily lifted all boats, revealing that even as the ranks of retail investors swelled, the surge in stock values accrued overwhelmingly to the top.
That’s a function of basic math. The 84% rise in the S&P 500 since the depths of 2020 is worth a lot more in dollar terms when it’s applied to a starting amount of $100,000 than to a retail investor who’s putting in $2,000.
“The higher up the income ladder you go, the more likely someone owns assets like stock and retirement accounts, and also, on average, the more they will have,” said Steve Rosenthal, a senior fellow at the Tax Policy Center. “The rich will have mega accounts, including mega IRA accounts, and the middle class and poor may own some stock, but it will be very little.”
The average equity holdings of the wealthiest tenth, which in 2022 included households worth $1.9 million or more, was $608,000 — a figure that includes stock held outright as well as shares in retirement or mutual funds. Meanwhile, the poorest half of Americans (households with a net worth $192,000 or less) typically had stock holdings worth just $12,500.
Even within the richest sliver, nearly all the growth in stocks has gone to the top 1%, said Chuck Collins, who directs the inequality program at the left-leaning Institute for Policy Studies.
Two decades ago—in the wake of the dot-com bust—the wealthiest 1% held 40% of the wealth in public markets; today, their share is 54%.
And Collins believes that’s by design. The policies of the past decade “have encouraged asset growth and discouraged wage growth,” he said. “As much as wages have gone up, the rules of the economy have been tilted to asset owners at the expense of wage earners.”
In his view, and in the belief of many progressive economists, the impressive stock gains of the past few decades are directly tied to policies that reduce how much money people can earn in other ways, including wages, pensions, and taxes that can redistribute gains from the richest to the poorest.
There’s “tax cuts and tax avoidance at the very top, and very low minimum wages that don’t reflect the productivity gains among average workers,” Collins said. Since the late 1970s, even as American workers got more productive, their pay fell far behind the value they were contributing, a shift that coincided with the popularity of the Friedman doctrine, which held that corporations’ only purpose was to make money for shareholders.
Since the late 1970s, Collins notes, “the productivity gains have mostly gone to equity, and to stockholders.”
More classically liberal (as in Adam Smith) proponents of free markets argue this is a good thing: Long-term, equity markets have provided the best return of any asset class, and encouraging broad participation in these markets is one way to spread prosperity widely, goes the argument. It’s the thinking behind, for instance, the rise of 401(k) plans in the place of pensions, and George W. Bush’s philosophy of an ownership society — people can have better results managing their own money than if they expect society to provide it for them.
But today’s markets are far narrower than they once were, and not just in terms of ownership. The stock market’s 20% rise this year has been fueled by just a handful of superstar companies. The so-called magnificent seven have a market cap equal to the stock markets of Canada, Japan and the United Kingdom, Apollo Chief Economist Torsten Slok noted this month.
This type of concentration discourages participation by boosting the most successful stocks above the level many investors can afford. And the era of “easy money,” as ultra-low interest rates were derisively called, allowed many firms that would have formerly floated on stock exchanges to sell to private equity, shrinking the total number of companies that are publicly traded—by more than 40% since the mid-1990s. (To their credit, commentators such as economic historian Edward Chancellor decry the distortions from such abundant capital.) Likewise, the current state of the market, in which 1% of Americans control more than half the stock-market wealth, offers another perspective on the pandemic’s economic boom, and why an economy that’s strong in the aggregate is leaving many people cold.
“The whole idea that there’s this democratization of the markets is way overhyped. 93% of all assets are in the top 10%— I don’t know what kind of democracy you’re living in,” said Collins. “The four-decade-long wealth surge to the top is basically continuing.”
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Actress Taraji P. Henson shared her frustrations about the persistent gender and racial pay gap in the entertainment industry while promoting her upcoming film, “The Color Purple.”
In an interview this week on SiriusXM with Gayle King, the co-host of “CBS Mornings,” Henson, joined by co-star Danielle Brooks and director Blitz Bazawule, addressed rumors that she was considering quitting acting. Visibly emotional, she attributed the sentiment to the financial inequity she has faced in the industry.
“I’m just tired of working so hard, being gracious at what I do, getting paid a fraction of the cost,” Henson said. “I’m tired of hearing my sisters say the same thing over and over. You get tired. I hear people go, ‘You work a lot.’ I have to. The math ain’t mathing. And when you start working a lot, you have a team. Big bills come with what we do. We don’t do this alone. It’s a whole entire team behind us. They have to get paid.”
She went on to say that on the reported compensation for her projects, “Uncle Sam” often takes 50%, and another 30% goes to her team.
“It seems every time I do something and break another glass ceiling, when it’s time to renegotiate, I’m at the bottom again, like I never did what I just did, and I’m tired,” Henson said.
Bazawule commented on the fight to cast Henson, Brooks and Fantasia Barrino-Taylor in the film.
“Especially for Black women, and I’m going to be very specific — it’s like you were never here,” the director said. “And the fact that every single one of you had to audition for this role — roles that were second nature to you. Roles that no one should even question the minute the name comes up. The question is, ‘How much do you have?’”
Henson’s experience echoes a broader issue, as the National Women’s Law Center analyzed last year, finding that women of color particularly face significant pay disparities.
It’s not the first time the actress has spoken out on this topic, revealing that she only made $150,000 for her Academy Award-nominated role in “The Curious Case of Benjamin Button” in a 2019 Variety interview.
Industry peers like Robin Thede and Gabrielle Union jumped to Henson’s support on social media.
“Taraji is telling the absolute TRUTH. 70-80% of GROSS income is gone off top for taxes & commissions (agents, managers, lawyers),” Thede posted as part of a longer thread on the subject.
“Not a damn lie told. Not. A. Damn. Lie. We go TO BAT for the next generation and hell even our own generation and above. We don’t hesitate to be the change that we all need to see AND it takes a toll on your mind, health, soul, and career if we’re keepn it 100,” Union wrote as well.
From ‘Bah, humbug!’ to redemption: Charles Dickens’ ‘A Christmas Carol’ unfolds as more than just a festive fable, offering profound insights into self-discovery, kindness, and rewriting one’s life story.
Charles Dickens’ timeless classic, “A Christmas Carol,” isn’t just a heartwarming tale of holiday spirit; it’s a profound exploration of human psychology and the power of personal transformation.
Many of us have heard the story before through countless movie and TV adaptations, especially the infamous Scrooge, whose name has now become a common insult toward those who fight against the holiday spirit of joy, kindness, and charity.
If you’re interested, you can read the original 1843 novella A Christmas Carol for free at Project Gutenberg. There are also many free audiobooks you can find and listen to.
The story opens the day before Christmas with Ebenezer Scrooge at work, a strict businessman who is described as miserable, lonely, and greedy, without any close friends or companions. His nephew visits, wishes him a cheerily “Merry Christmas!” and invites him to spend dinner with his family, but Scrooge rudely brushes off the kind gesture and responds with his trademark phrase “Bah humbug!”
Scrooge’s cynical and negative attitude is on full display in the opening chapter. “He carried his own low temperature always about with him.” In one instance where he is asked to donate money to help the poor, the wealthy Scrooge asks, “Aren’t there prisons? Aren’t there workhouses?” and then complains about the “surplus population.”
It’s clear that Scrooge’s only concerns and core values in life are money and wealth. If it doesn’t help his profits or bottom line then he doesn’t care about it, especially the well-being of others which he claims is “none of his business.”
The archetype of Scrooge is more relevant today than ever, especially in our corporatized world where rich elites isolate themselves from the rest of society while income inequality, crime, and economic woes continue to rise for the average person. Dickens observed early signs of increased materialism, narcissism, and greed almost two hundred years ago, but these unhealthy instincts have only grown rapidly since then. Social media has particularly warped people’s perceptions of wealth, status, and fame, which has in turn blinded us to many other important values in life.
In many cases people like Scrooge live lonely and miserable lives until they die, clinging to their money as they are lowered into their graves. However the story of “A Christmas Carol” provides hope and inspiration that people can change their paths in life if they are given the necessary insight and wisdom.
As the well-known tale goes, Scrooge is haunted by 3 benevolent spirits on consecutive nights (The Ghosts of Christmas Past, Present, and Future), each teaching him an essential lesson on what really matters in life.
This breakdown of past, present, and future creates a complete picture of one’s life. It’s a powerful framework to spark self-growth in any person. Once we reevaluate where we’ve been, where we are, and where we want to go, we have a much clearer idea on what the right path forward is.
Keep in mind you don’t need to be religious to reap the benefits of this story. Its lessons are universal. While there are supernatural and spiritual elements, the wisdom is real and tangible.
Introduction: The Ghost of Marley
Before Scrooge is visited by the three spirits, he encounters the ghost of his former business partner Marley who had died seven years ago.
The ghost of Marley is shown to be in a type of purgatory, aimlessly roaming the town, entangled in many heavy chains with cash-boxes, keys, padlocks, ledgers, deeds, and heavy purses made out of steel, representing a lifetime of greed and selfishness:
“I wear the chain I forged in life,” replied the Ghost. “I made it link by link, and yard by yard; I girded it on of my own free will, and of my own free will I wore it. Is its pattern strange to you?”
“Or would you know,” pursued the Ghost, “the weight and length of the strong coil you bear yourself? It was full as heavy and as long as this, seven Christmas Eves ago. You have laboured on it, since. It is a ponderous chain!”
The ghost lets Scrooge know that his actions have far-reaching consequences too. He will suffer a similar fate if he doesn’t change his ways, but there’s still hope for redemption! He then leaves, announcing to Scrooge that he will soon be visited by three spirits that will guide him to a better path.
Marley’s ghost serves as a warning, but also a sign of hope.
The Ghosts of the Past: Forgiving Your Former Self
Scrooge’s first encounter is with the “Ghost of Christmas Past,” who serves as a poignant reminder that we must confront our history to understand our present.
The Ghost of Christmas Past transports Scrooge through various memories he had as a child and young adult, showing his psychological development over time.
The first scene brings Scrooge back to his childhood town, where he is immediately rushed with feelings of nostalgia, cheerfulness, and joy. These positive memories depict a very different Scrooge from present, revealing his once optimistic and hopeful disposition. What happened to him since?
The memories begin to grow darker. Multiple scenes show Scrooge spending Christmas alone as a young child, one time being left by himself at boarding school while his friends were celebrating the holidays with family, and another time sitting solitarily by the fire reading. Scrooge begins to shed tears and show sympathy toward his former, abandoned self.
One of the most pivotal memories is when young adult Scrooge is speaking with his past lover. She notices a fundamental change in him that has become a dealbreaker in their relationship.
“You fear the world too much,” she answered, gently…”I have seen your nobler aspirations fall off one-by-one, until the master-passion, Gain, engrosses you…”
She sees that money has become Scrooge’s God which he puts above all other values, including love. The young woman continues…
“Our contract is an old one. It was made when we were both poor and content to be so, until, in good season, we could improve our worldly fortune by our patient industry. You are changed. When it was made, you were another man.”
Here we begin to see Scrooge’s hardening into the man he is in the present.
His pursuit of wealth as his main source of comfort and satisfaction has damaged his relationship beyond repair. The lover sees no other option but for them to go their separate ways. The memory deeply pains Scrooge and he cries out for the ghost to show him no more.
In truth we are all a product of our past, including our environment and the choices we make in life. Scrooge has clearly gone through hardships and taken wrong turns that have influenced where he finds himself today; but it’s not too late.
The Ghost of Christmas Past forced Scrooge to remember events that he had long forgotten, neglected, or ignored because they were too painful to think about. While these old memories cannot be altered, you have to accept your past, be honest with yourself, and forgive yourself if you want to learn, grow, and change for the better.
One of the main lessons here is that you need to take responsibility for the past before you can take power over the future. Scrooge is suffering, but he’s learning.
Making the Most of the Present: Opportunities for Joy and Kindness
Scrooge’s next encounter is with the “Ghost of Christmas Present,” who teaches Scrooge all the opportunities for good that cross his path every single day.
The spirit is colorfully dressed with holly, mistletoe, berries, turkeys, sausages, oysters, pies, puddings, fruit, and punch surrounding him, a representation of the simple pleasures in life we can all learn to appreciate, savor, and be grateful for.
First, the Ghost of Christmas Present takes Scrooge for a walk outside in the town during Christmas Day, observing all the happiness, zest, and cheer overflowing through the streets. Everyone from all backgrounds is enjoying the festivities.
When two people bump into each other and start a small fight, the ghost sprinkles a magical substance on them which instantly ends the argument and brings both back to a more joyful demeanor.
“Once or twice when there were angry words between some dinner-carriers who had jostled each other, he shed a few drops of water on them, and their good humour was restored directly. For they said, it was a shame to quarrel upon Christmas Day. And so it was! God love it, so it was!”
On Christmas, all fights are optional.
The ghost then leads Scrooge to the home of Bob Cratchit, his current employee who he often treats poorly. Here Scrooge is introduced to Bob’s sick and disabled son Tiny Tim, who despite his illness is still excited to spend holiday time with the family. The poor family makes the most of the limited food and time they have together, including a fake “goose” dinner made out of apple sauce and mashed potatoes.
Scrooge looks on in sympathy and wishes he could do more to help them. He asks the spirit about the current state of Tiny Tim’s health:
“Spirit,” said Scrooge, with an interest he never felt before, “tell me if Tiny Tim will live.”
“I see a vacant seat,” replied the Ghost, “in the poor chimney-corner, and a crutch without an owner, carefully preserved. If these shadows remain unaltered by the Future, the child will die.”
In another scene, Scrooge is transported to the home of his sister’s family, the same party his nephew invited him to the previous day. Everyone in the household is enjoying the Christmas holiday while singing, dancing, and playing games. Several times Scrooge is brought up in conversation and everyone can only laugh and shrug at Scrooge’s relentless misery and gloom.
“A Merry Christmas and a Happy New Year to the old man, whatever he is!” said Scrooge’s nephew. “He wouldn’t take it from me, but may he have it nonetheless. Uncle Scrooge!”
Scrooge knows that these events and perceptions by others are part of his own doing.
At every turn, Scrooge denies taking advantage of daily opportunities for happiness, including rejecting a group of children singing carols, responding rudely to acquaintances (“Bah humbug!”), and refusing to give to charities or help others when it’s fully in his power.
These events are small, but they build up over time. Whenever Scrooge is given a choice between kindness vs. coldness, he chooses to be cold. After enough tiny social interactions, Scrooge has cemented his reputation around town as being the miserable miser.
Can he still change it?
The Shadows of the Future: Shaping Tomorrow Today
The final spirit Scrooge meets is the “Ghost of Christmas Yet to Come” or the “Ghost of Christmas Future.” This ghost blends in with the darkness of the night, wearing a long black robe that covers their entire face and body, except for a boney hand it uses to silently point.
The ghost begins by showing men on the streets joking and laughing about someone who has just passed away. At a pawn shop, robbers are selling stolen property they recently seized from the dead man’s estate, saying it’s for the best since the items will no longer serve any use to him. Scrooge, perplexed by the meaning of these scenes, intently watches on. Another man jokes:
“It’s likely to be a very cheap funeral, for upon my life I don’t know of anybody to go to it.”
Scene by scene, people show ambivalence toward the death. Scrooge grows frustrated and asks:
“If there is any person in the town who feels emotion caused by this man’s death, show that person to me. Spirit, I beseech you!”
Now they see a family that was in debt to the dead man, and they are feeling humble gratitude and quiet glee that they no longer have to worry themselves about such an evil creditor:
“Yes. Soften it as they would, their hearts were lighter. The children’s faces, hushed and clustered round to hear what they so little understood, were brighter; and it was a happier house for this man’s death! The only emotion that the Ghost could show him, caused by the event, was one of pleasure.”
Already having suspicions on who this man is, Scrooge begs the ghost to finally reveal where his future lies. The ghost travels to a graveyard and points at a tombstone that upon inspection reads: Ebenezer Scrooge
Scrooge’s heart sinks. Next it’s shown that Tiny Tim hasn’t recovered from his illness and has also passed away, and at such a young age. Feeling completely hopeless at this point, Scrooge desperately begs:
“Answer me one question. Are these the shadows of the things that Will be, or are they shadows of things that May be, only?”
“Men’s courses will foreshadow certain ends, to which, if persevered in, they must lead. But if the courses be departed from, the ends will change. Say it is thus with what you show me!”
As long as you’re alive and breathing, you have the power to change.
When we think about death, it puts everything about life into perspective. Our time is finite in this world and we must make the most of it without being distracted by trivialities and lesser values. If you were laying on your deathbed right now, what would your main regrets be?
When Scrooge reflects on his own death and what influence he’d leave on the world, it shakes him at his core – but also transforms him.
The Power of Redemption: Transforming Scrooge’s Tale into Our Own
After the visitations of the three ghosts, Scrooge wakes up a changed man ready to start his new life. He rises from bed excited, hopeful, and giddy that he’s still alive and still has a chance to change his current course.
Upon finding out it’s still Christmas Day, he buys a prize turkey to send to the Cratchit family and begins giving generous amounts of money to children and the poor. He continues to walk around the town square, giving everyone warm greetings and a hearty “Merry Christmas!”
When he sees Bob Cratchit the next day at work, he immediately gives him a raise in salary and promises to take care of Tiny Tim and assist the family in anyway possible. He becomes a lifelong friend to the family.
This sudden change in Scrooge’s behavior confused the townsfolk at first, including many who made fun of this rapid transformation that was so uncharacteristic of Scrooge. But these words and gossip didn’t bother him:
“Some people laughed to see the alteration in him, but he let them laugh, and little heeded them; for he was wise enough to know that nothing ever happened on this globe, for good, at which some people did not have their fill of laughter[…] His own heart laughed: and that was quite enough for him.”
At its core, “A Christmas Carol” is a story of redemption and heroism. Scrooge’s journey from miserly recluse to benevolent samaritan exemplifies the human capacity for change.
By reflecting on his past, present, and future self, Scrooge discovered the best path forward – a process that applies to all forms of self-improvement.
This story has insightful lessons that can apply to anyone’s life, no matter what situation they find themselves in. We can’t change the past chapters, but we can change how our story ends.
Never forget you have the power to rewrite your life story at any time.
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This is a story about you and your favorite credit card, the one that earns you points. You use your card for everything. You pay off your balance every month. And you watch with glee as your rewards grow and grow and grow. And when it’s time to cash in, you announce that you’re going to get a family gift. And each member will get one vote. And then your daughter argues that the family needs another iPad. And your son has fallen in love with the ugliest garden gnome that you’ve ever seen. And so to break up the skirmish, you decide that you’ll be getting the frying pan. Because what brings the family together more than food? Marty is the answer. But let’s keep him out of this. And when they complain and say, “But that’s not what I wanted,” you look them in the eye and say, “This was never about you.” “It’s about us, all of us.” And then two weeks later your frying pan arrives. And you can’t help but smile because you kind of did get this for yourself, though you’ll never admit it. And you’re looking at the frying pan. And it’s staring at you and you at it and it at you and you at it. And you just have this split second where you think to yourself: Who actually paid for this? Who pays for all of this? Well, if you love your rewards card, then you’re probably not going to like the answer. Because you try to be a good person, you shop locally. And each week you buy, let’s say, $100 in groceries from MJ. When you swipe your card, that $100 doesn’t go straight to MJ. Instead, store owners are charged a series of fees, the largest of which is called the swipe fee. It’s set by the card network, usually Visa or Mastercard. And your bank uses it to pay for your rewards. The swipe fee is usually between 1.5 percent and 3.5 percent of your total. The more premium your credit card, the more that MJ is charged. Now, that might not sound like much. But it can add up. For small businesses like MJ’s, swipe fees can be one of their biggest expenses. And small stores like hers get charged higher rates than big-box competitors. In order to cope, store owners like MJ raised their prices. That means that all of us are paying more. But only those who have special cards are getting rewards. And here’s the catch: The wealthiest Americans tend to have the best cards that give them the most rewards, while poorer Americans are more likely to pay in cash or debit with no rewards or benefits. So what we really have is a system that forces everyone to pay higher prices in order to subsidize rewards that primarily go to the wealthy. So this rewards card, it’s really a screw-over-poor- people card. Every time you use it, you’re contributing to inequality, helping to drive up prices and further squeeze the most cash-strapped Americans, all so that you can get that free frying pan. You’re probably not benefiting from rewards as much as you thought. In 2020, the Federal Reserve found that the average American at every income level loses more to swipe fee price hikes than they earn in rewards. And of course, the poorest Americans are still getting handed the worst deal. On average, they pay five times more in price mark-ups than they’ll ever receive in rewards. Why are we stuck in this system? Why are swipe fees in the U.S. nine times higher than they are in Europe? Why do we have to pay so much just to pay? Well, it’s largely thanks to two companies, Visa and Mastercard. This system is their core business. It’s what they do for a living. And, sure, they’re providing a service and deserve to earn a profit. But these two companies control over 80 percent of the credit card market. With scant competition, Visa and Mastercard have faced little pressure to rein in swipe fees. The truth is for the vast majority of Americans, the best deal might not come in the form of a new piece of plastic but instead a new piece of legislation. That’s because Congress has the power to regulate swipe fees. In fact, in 2010, they did just that for debit cards. Remember the swipe fee on that $100 grocery purchase? If you paid with a debit card, it would have only cost MJ 26 cents. Dick Durbin, the senator who helped crack down on swipe fees for debit cards, has authored a bipartisan bill that would use competition to drive down credit card swipe fees. But the banks and credit card companies are, of course, pushing back. Right now, there are two things that you can do. First, call your senator and encourage them to support this bill. You can go to this website to find their number. Second, if you’re shopping at a small business that you want to support, remember that how you pay can make a difference. Using your debit card can save small businesses a lot in swipe fees. But the best solution might be elsewhere in your wallet. Increasingly, small businesses are offering discounts for cash payers. Avoiding this predatory system can be a win for both of you. And if those rewards are just too good to say goodbye to, well, then at least don’t go around telling people that you’ve never taken a handout, because you have. And the working class is paying for it. [MUSIC PLAYING]
Early morning magenta light illuminates clouds and the Moulton Barn on Mormon Row at the foot of the … [+] Grand Tetons near Jackson, Wyoming. Teton County, home to the affluent and famous Jackson Hole, has the highest income inequality in the state of Wyoming.
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In the massive and eclectic mosaic that is America, each county tells its own unique story, interwoven with threads of hope, ambition, dreams, and sometimes, stark contrasts. But in every state, there exists a county where these contrasts are most palpable — where the divide between the opulent and the struggling is not just a mere line but a chasm. These are the counties with the highest income inequality, and their tales are a reflection of the broader American narrative, laying bare the challenges and complexities of the very promise of the American Dream.
Using data sources from the Census Bureau’s 2021 American Community Survey 5-Year Estimates (the latest data available), we analyzed every single U.S. state in terms of the county with the highest income inequality, as measured by its Gini index. The Gini index or Gini coefficient is a measure of inequality of a distribution, in this case income, with a value of 0 expressing total equality and a value of 1 total inequality. A higher Gini index indicates greater inequality.
Read on the find out the county with the worst income inequality in each state as well as what patterns and themes emerge that can better inform us about income inequality in America in general.
Alabama
County with highest income inequality: Pike County
Gini index: 0.5323
Median household income: $40,106
Mean household income: $65,204
Pike County is centered on the city of Troy, home to Troy University and another example of how college towns often feature high income inequality. Pike County is in southeastern Alabama, a little over 50 miles from Montgomery. Incomes are heavily divided, with 57.6% of households earning less than $50,000 a year while a full 20% of households earn $100,000 or more. The county’s three largest industries by employment include Retail Trade, accounting for 14.5% of the workforce; Educational Services, accounting for 13.1% of the workforce; and Manufacturing, accounting for 11.9%. The county seat — Troy — itself exhibits strong income stratification, having a large gap between its median household income of $36,409 and its mean household income of $68,288. What’s more, 58.7% of Troy households earn less than $50,000 per year against 20.5% who earn $100,000 or more.
Alaska
County with highest income inequality: Yukon-Koyukuk Census Area
Gini index: 0.4752
Median household income: $43,405
Mean household income: $57,989
Alaska isn’t divided up into counties as is the case in most other U.S. states. Instead, it is composed of a series of boroughs and Census Areas. In our study of the counties with the highest income inequality in each state, Alaska’s equivalent is Yukon-Koyukuk Census Area. This census area covers a massive amount of land in central Alaska, boasting an area of nearly 148,000 square miles. Its two largest cities are Galena and Fort Yukon, both situated on the Yukon River, but with Galena far downstream to the southwest of Fort Yukon. The Gini index for Yukon-Koyukuk Census Area — 0.4752 — is less than the 0.4818 index for the U.S. as a whole, and therefore this Alaskan census area is comparatively less unequal than many other counties in this study. Hence, the gap between its median household income and mean household income is smaller than, for example, Pike County’s gap; and the latter county, not coincidentally, has a higher Gini coefficient.
Arizona
County with highest income inequality: Apache County
Gini index: 0.5055
Median household income: $34,788
Mean household income: $48,645
Apache County covers the northeast corner of Arizona and is shaped like a tall rectangle. The majority of the county is occupied by a portion of the federally recognized Fort Apache Reservation and Navajo Nation. Out of the 50 highest income inequality counties in our study, Apache County’s Gini index of 0.5055 ranks 34th, which means it is toward the less extreme side of inequality. That said, Apache County is more unequal than the national Gini index of 0.4818. Rather than being a county polarized into impoverished households on one hand and super-wealthy households on the other, Apache County has high income inequality due to the startlingly high percentage of households earning less than $10,000 — 19.9% — contrasted with the high percentage of middle-income households, with 24% earning $50,000 to $99,999. The top three industries by employment are Agriculture, Forestry, Fishing & Hunting, representing 15.7% of the workforce; Health Care & Social Assistance, accounting for 15.4%; and Manufacturing, accounting for 10.9%.
Arkansas
County with highest income inequality: Lee County
Gini index: 0.5806
Median household income: $29,082
Mean household income: $54,648
Lee County is in east-central Arkansas, with its eastern border being the Mississippi River. Centered on the county seat of Marianna, Lee County’s Gini coefficient of 0.5806 made it rank No. 6 out of 50, having one of the highest rates of income inequality in the study. Although its average household income of $54,648 is far lower than the U.S.’s corresponding figure of $97,196, it is the gap between Lee County’s median and mean household income — which is over $25,500 — that really stands out. More than two-thirds of households (67.4%) earn less than $50,000, against 18.5% that earn $50,000 to $99,999 and 14.1% that earn $100,000 or more per year.
California
County with highest income inequality: Tehama County
Gini index: 0.5145
Median household income: $52,901
Mean household income: $79,138
Tehama County is in northern California, centered on the county seat of Red Bluff, roughly a two-hour drive north of Sacramento. Tehama County’s Gini index is approximately 7% higher than the U.S. Gini index of 0.4818, but when compared to the other 49 counties in this study, Tehama County’s income inequality is on the lower end of the spectrum. Tehama County features a very large percentage of middle-income households earning $50,000 to $74,999 — 17.4% of all households. Yet, at the same time, Tehama County is home to 47.6% of households earning less than $50,000 alongside 23.1% of households earning $100,000 or more. The county’s main three industries are Health Care & Social Assistance, which employs 13.9% of the workforce; Retail Trade, which employs 13.2% of the workforce; and Manufacturing, which employs 9.27% of the workforce.
Colorado
County with highest income inequality: Pitkin County
Gini index: 0.5480
Median household income: $92,708
Mean household income: $172,473
The county seat and biggest city in Pitkin County is Aspen, one of the most famous and affluent ski resort towns in the U.S. That Pitkin County is home to a place like Aspen and has the highest income inequality of all counties in Colorado highlights a more general theme of vacation and resort locations also tending to feature higher-than-average income inequality. In Pitkin County, the distribution of incomes is very skewed, with more than one fifth (21.9%) of households earning $200,000 or more per year. Furthermore, the percentage of households that earn less than $100,000 is approximately 52.4% versus households that earn $100,000 or more, which is 47.5%.
Connecticut
County with highest income inequality: Fairfield County
Gini index: 0.5425
Median household income: $101,194
Mean household income: $164,837
Connecticut’s highest income inequality county — Fairfield County — is the also most populous county in Connecticut. Its location makes it particularly interesting, as it stretches from the southwestern corner of the state, right next to New York City, eastward to encompass four of Connecticut’s largest cities, including Bridgeport, Stamford, Norwalk, and Danbury. Fairfield County contains, for example, the city of Greenwich, which is one of the most affluent places in the U.S., as well as larger urban areas that have witnessed a decline in population and wealth over several decades. An incredible 23.9% of households in Fairfield County have a median household income of $200,000 or more. And more than half (50.5%) of households earn $100,000 or more a year.
Delaware
County with highest income inequality: Sussex County
Gini index: 0.4594
Median household income: $68,886
Mean household income: $92,069
Compared to the nation’s overall income inequality — with a Gini index of 0.4818 — Sussex County might be the most unequal in Delaware, but it’s less unequal than America as a whole. You can see this in the breakdown of income distribution. Approximately 36.4% of households earn less than $50,000, followed by 32.1% of households that earn from $50,000 to $99,999, and lastly, 31.5% of households that earn $100,000 or more per year.
Florida
County with highest income inequality: Hardee County
Gini index: 0.5343
Median household income: $41,395
Mean household income: $65,000
Florida has for sometime been a state riddled with income inequality. And the county with the greatest income inequality is Hardee County, which is located right in Central Florida, southeast of the Tampa Bay metro area and northeast of the Cape Coral-Fort Myers area. Its county seat is Wauchula, situated on U.S. Route 17 in Florida. Incomes in general in Hardee County are on the lower side, but there is still substantial inequality, with more than half of households (56.6%) earning less than $50,000 a year, while 28.3% of households earn between $50,000 and $100,000, and 15.1% of households earn $100,000 or more.
Georgia
County with highest income inequality: Macon County
Gini index: 0.5796
Median household income: $33,163
Mean household income: $56,218
Out of the 50 counties in our study, Macon County has the seventh highest level of income inequality, with a Gini coefficient of 0.5796, significantly higher than the national Gini coefficient of 0.4818. A staggering 17.7% of households in Macon County earn less than $10,000 a year, with 64.5% of households earning less than $50,000 a year. This is in contrast to more than a fifth of households (21.7%) that earn between $50,000 and $100,000 a year, plus 13.6% of households that earn $100,000 or more a year. According to Data USA, the top industries by employment of the county’s workforce are Manufacturing (123.2%), Health Care & Social Assistance (13.7%), and Agriculture, Forestry, Fishing & Hunting (10.2%).
Hawaii
County with highest income inequality: Hawaii County
Gini index: 0.4747
Median household income: $68,399
Mean household income: $91,885
Hawaii’s most unequal county in terms of income — Hawaii County — actually has the third lowest income inequality of the 50 counties in our list. With a Gini index of 0.4747, income inequality in Hawaii County is lower than the nationwide average. And this generally low inequality is reflected in the data. Approximately 37.2% of households in Hawaii County earn less than $50,000, while 30.3% of households earn $50,000 to $99,999, and at the top, 32.5% of households earn $100,000 or more per year.
Idaho
County with highest income inequality: Madison County
Gini index: 0.4909 (40th highest)
Median household income: $53,498
Mean household income: $77,337
The county with the greatest income inequality in Idaho — Madison County — has a level of inequality very comparable to the national average. With a Gini index of 0.4909, Madison County is only slightly more unequal than the U.S. overall (Gini index of 0.4818). Just under a quarter of all households (24.1%) earn $100,000 or more per year, but the largest portion is made up of households earning $100,000 to $149,999 (16%), limiting the amount of really high-earners in Madison County. A little under half of all households (46.4%) earn less than $50,000 per year, while 29.7% of households earn $50,000 to $99,999.
Illinois
County with highest income inequality: Gallatin County
Gini index: 0.5286 (25th highest)
Median household income:
Mean household income: $92,069
Located in the far southeast of Illinois, Gallatin County is the county with the highest income inequality in Illinois. Overall, it ranks right smack in the middle, 25th highest out of 50. Nearly half of all households (48.4%) earn less than $50,000 a year, while more than a fifth (21.2%) earn $100,000 or more a year. The county’s top industries by employment are Retail Trade (18.2% of the workforce), Health Care & Social Assistance (14.5%), and Manufacturing (12.9%).
Indiana
County with highest income inequality: Blackford County
Gini index: 0.4847 (44th highest)
Median household income: $45,080
Mean household income: $61,505
The funny thing about the county with the highest income inequality in Indiana is that it’s not that unequal. Its Gini index of 0.4847 is only slightly higher than the national figure of 0.4818. There’s a very robust middle-income population in Blackford County, with 30.3% of households earning between $50,000 and $100,000 versus the true high-earners, those earning $100,000 or more a year, who make up 16% of all households. More than half of all households (53.7%) in Blackford County earn less than $50,000 a year.
Iowa
County with highest income inequality: Adams County
Gini index: 0.5072 (33rd highest)
Median household income: $57,981
Mean household income: $85,877
In the grand scheme of things, Iowa’s most unequal county is on the lower end of the overall rankings. Iowa’s county with the highest income inequality — Adams County — was 33rd out of 50, so it’s not particularly notorious. And this makes sense, because with a Gini coefficient of 0.5072, Adams County is close to the midpoint between zero (complete income equality) and one (complete income inequality).
Adams County does feature a recurring characteristic: Its main industries, in terms of percentage of the workforce employed, are a combination of healthcare and primary sectors, in this case the breakdown was Health Care & Social Assistance (22.2%), Manufacturing (17.1%), and Agriculture, Forestry, Fishing & Hunting (13.3%).
Kansas
County with highest income inequality: Meade County
Gini index: 0.5423 (19th highest)
Median household income: $66,042
Mean household income: $113,325
Located in southwestern Kansas, Meade County is an interesting entry on our list of the county with the highest income inequality in each state. Here, there’s a solid middle-income segment, with 39.4% of households in Meade County earning $50,000 to $99,999. At the same time, there is a sizable upper-income segment, with 26.4% of households earning $100,000 or more — and, notably, 7.8% of all households earned $200,000 or more.
The top-employing industries in Meade County are Agriculture, Forestry, Fishing & Hunting (17.2% of the workforce), Health Care & Social Assistance (15.2% of the workforce), and Educational Services (12% of the work force). Another startling data point is the gap between mean and median household income in Meade County, equal to a more than $47,000 difference.
Kentucky
County with highest income inequality: Knox County
Gini index: 0.5503 (13th highest)
Median household income: $29,206
Mean household income: $47,979
Located in Appalachia, in southeastern Kentucky, Knox County is a notable coal-producing town. The largest industries in Knox County by employment are Health Care & Social Assistance (18.1%), Retail Trade (13.9%), and Educational Services (12.2%). Meanwhile, the highest paying industries are Mining, Quarrying, & Oil & Gas Extraction (0.661% of the workforce), Agriculture, Forestry, Fishing & Hunting, & Mining 0.486% of the workforce), and Finance & Insurance, & Real Estate & Rental & Leasing 2.99% of the workforce).
While Knox County has the highest income inequality in the state of Kentucky, this county is not like a Versailles-style ultra-wealthy on one pole and utterly poor at the other pole. Approximately 67.2% of households in Knox County earn less than $50,000 a year. This is pitted against 21.6% of households that earn $50,000 to $99,999 a year and the 11.1% of households that earn $100,000 or more. This county’s Gini index is quite high, so high that the level of income inequality in Knox County enabled it to place 13th out of 50.
Louisiana
County with highest income inequality: East Carroll Parish
Gini index: 0.6860
Median household income: $25,049
Mean household income: $60,718
Located in the northeast corner of Louisiana, with its parish seat in the city of Lake Providence, East Carroll Parish is easily the county with the highest income inequality. Indeed, out of all 50 counties in the study, East Carroll Parish has the second highest Gini index. Compared to America’s Gini index of 0.4818, East Carroll Parish’s income inequality is roughly 42% higher than the national level. The huge $35,669 gap between median and mean household income shouldn’t come as a surprise when a place has a Gini coefficient this high. More than two-thirds (68.6%) of households in East Carroll Parish earn less than $50,000, while another 18.4% earn between $50,000 and $100,000 and 13.1% earn $100,000 or more a year. Health Care & Social Assistance (21.7% of the workforce), Public Administration (13.4% of the workforce), Retail Trade (11.6% of the workforce), and Agriculture, Forestry, Fishing & Hunting (9.46% of the workforce) are the top industries in terms of employment.
Maine
County with highest income inequality: Aroostook County
Gini index: 0.4624
Median household income: $47,278
Mean household income: $63.636
Out of all 50 counties included in our list of the counties with the highest income inequality in each state, Maine’s Aroostook County ranked as the second lowest in terms of income inequality. Aroostook County’s Gini index of 0.4624 is less than the U.S. Gini index of 0.4818.
Maryland
County with highest income inequality: Talbot County
Gini index: 0.4983
Median household income: $79,349
Mean household income: $116,514
Talbot County is situated on the central Eastern Shore of Maryland, across the Chesapeake from cities like Annapolis and Washington, D.C. Although Talbot County’s Gini coefficient of 0.4983 makes it the county with the highest income inequality in Maryland, in the grand scheme, its inequality isn’t too bad (it ranks 37th out of 50, and its Gini index is only slightly higher than the U.S. overall). As such, the distribution of household incomes is fairly balanced, with 30.7% of households earning less than $50,000 per year, 30.5% earning between $50,000 and $100,000, and 38.9% earning $100,000 or more.
Massachusetts
County with highest income inequality: Suffolk County
Gini index: 0.5281
Median household income: $80,260
Mean household income: $116,843
Suffolk County covers much of the Boston area, including the city of Boston proper, Chelsea, Revere, and Winthrop. Suffolk is the county with the highest income inequality in Massachusetts, yet its incomes notably skew towards the high end. For instance, more than a third (35.6%) of households earn less than $50,000, while another 23% of households earn between $50,000 and $100,000 a year. However, both those segments are overshadowed by the 41.4% of households that earn $100,000 or more per year.
Michigan
County with highest income inequality: Wayne County
Gini index: 0.4906
Median household income: $52,830
Mean household income: $74,894
Wayne County covers much of the Detroit metro area, stretching down in the southwest to West Sumpter, in the northwest to Northville, and the northeast to Grosse Pointe; the county’s eastern border is the border with Canada. Although its income inequality exceeds every other county in Michigan, Wayne County only has a Gini index of 0.4906, which isn’t much higher than the U.S.’s Gini index of 0.4818. The gap between median and average household income isn’t too great, with 47.6% of households earning less than $50,000, 28.4% of households earning $50,000 to $99,999, and 24% of households earning $100,000 or more.
Minnesota
County with highest income inequality: Stevens County
Gini index: 0.5123
Median household income: $65,750
Mean household income: $95,156
Stevens County is located far out there, in western, central Minnesota, right near the Lake Traverse Reservation. There is a gap of almost $30,000 between median household income and average household income. This distortion of the mean household income upward for Stevens County is due mainly to the 28.3% of households that earn at least $100,000 a year or more. In addition to them, 33% of households earn $50,000 to $99,999, while 38.6% of households earn less than $50,000. The three primary industries by employment, according to Data USA, are Health Care & Social Assistance (15.8%), Educational Services (14.9%), and Manufacturing (13.4%).
Mississippi
County with highest income inequality: Humphreys County
Gini index: 0.5727
Median household income: $30,327
Mean household income: $55,909
Out of all 50 counties included in our list of the counties with the highest income inequality in every state, Humphreys County in Mississippi ranked as the eighth highest in terms of income inequality. Humphreys County’s Gini index of 0.5727 is considerably higher than the U.S. Gini index of 0.4818. According to Data USA, the top three industries in Humphreys County by employment are Health Care & Social Assistance (15.8% of the workforce), Manufacturing (15.8% of the workforce), and Retail Trade (10.6% of the workforce). The income distribution in Humphreys County is very lopsided, with nearly 70% (69.6%) of households earning less than $50,000 a year, while 18% of households earn from $50,000 to $99,999 and another 12.4% earn $100,000 or more.
Missouri
County with highest income inequality: Adair County
Gini index: 0.5515
Median household income: $46,639
Mean household income: $71,907
Centered on Kirksville, in northeastern Missouri, Adair County has the highest income inequality in the state and ranks 12th out of 50 counties in terms of its inequality. The income distribution among households in Adair County is very uneven, with 52.6% of households earning less than $50,000 per year, against 28.1% of households earning between $50,000 and $100,000 per year, and 19.4% of households earning $100,000 or more.
Montana
County with highest income inequality: Judith Basin County
Gini index: 0.5195
Median household income: $51,691
Mean household income: $74,560
Judith Basin County is about as close to the dead center of Montana as a county can get. With its county seat at the town of Stanford, Judith Basin County is pretty far from Montana’s bigger cities, being, for instance, roughly 160 miles from Billings, the state’s largest city. Judith Basin County has an intriguing employment breakdown. For example, the top occupational role in Judith Basin County is Management Occupations, accounting for 32.1% of the workforce. At the same time, the top industry by employment is Agriculture, Forestry, Fishing & Hunting, which accounts for 41% of the workforce. Income inequality in Judith Basin County is fueled by uneven distribution, with 48.7% of households earning less than $50,000, while at the same time, more than a fifth of households (21.5%) earn $100,000 or more — indeed, almost 11% of households earn $200,000 or more.
Nebraska
County with highest income inequality: Fillmore County
Gini index: 0.4931
Median household income: $66,410
Mean household income: $96,007
Named for President Millard Fillmore, Fillmore County has the highest income inequality in the state, but in the overall scheme of things, its Gini index of 0.4931 means that it’s not that unequal. According to Data USA, the main industries by employment include Agriculture, Forestry, Fishing & Hunting (14.7% of the workforce), Health Care & Social Assistance (13.4% of the workforce), and Retail Trade (11.6% of the workforce). While 28.3% of households earn $100,000 or more per year in Fillmore County, this is balanced by the 38.4% of households earning less than $50,000 and the 33.3% of households earning $50,000 to $99,999 a year.
Nevada
County with highest income inequality: Storey County
Gini index: 0.4752
Median household income: $66,713
Mean household income: $93,984
Storey County is simultaneously one of the least populated counties in Nevada and one of the fastest growing economies. Compared to the other counties on our list and nation in general, Nevada’s most unequal county does not suffer from a high rate of income inequality. The income distribution over all households in Storey County is fairly even, with 37.6% of households earning less than $50,000 a year, 29.9% earning between $50,000 and $100,000 a year, and 32.5% earning $100,000 or more a year.
New Hampshire
County with highest income inequality: Grafton County
Gini index: 0.4900
Median household income: $73,755
Mean household income: $102,862
New Hampshire’s county with the greatest income inequality has a Gini index that’s only slightly higher than the U.S.’s Gini index of 0.4818. Still, with a Gini coefficient of 0.4900, Grafton County has the highest income inequality in the state. Both median and average household incomes are one the higher side. More than one third of households (35.3%) earn less than $50,000 per year, while a comparable 34.1% of households earn $100,000 or more per year. In the middle is the 30.6% of households that earn $50,000 to $99,999 a year.
New Jersey
County with highest income inequality: Essex County
Gini index: 0.5483
Median household income: $67,826
Mean household income: $112,403
The county in New Jersey with the highest income inequality — Essex County — has one of the biggest gaps between its average household income ($112,403) and median household income ($67,826): A difference of $44,577. This isn’t too surprising once you know what areas the county covers: Northeastern New Jersey, just outside New York City, stretching from Newark in the east, to East and West Orange in the center, to Fairfield in the far northwest. This area includes lots of cities that have grown in both population and wealth due to the spillover from the New York City area, with more people willing to live in North Jersey and work in the Big Apple rather than live in the latter; the area also includes a lot of cities still recovering or stagnating from deindustrialization. Incomes are polarized between households earning less than $50,000 (38.7% of households) and those earning $100,000 or more (35.8% of households).
New Mexico
County with highest income inequality: Harding County
Gini index: 0.7279
Median household income: $35,900
Mean household income: $142,117
Harding County is one of the least populated counties in the U.S. Located out in the northeast of New Mexico, Harding County’s Gini index of 0.7279 is the highest in the whole study. No doubt the low population helps distort the imbalance of income distribution in Harding County. Just shy of two-thirds of households (65.4%) earn less than $50,000 per year. Against this there is the 15.3% of households that earn $50,000 to $99,999 a year and the 19.3% of households that earn $100,000 or more a year. What’s even crazier is that more than one in 10 households earn $200,000 or more.
New York
County with highest income inequality: New York County
Gini index: 0.5968
Median household income: $93,956
Mean household income: $172,695
New York County, in actuality, is just the borough of Manhattan. Hence, its extremely high median and mean household incomes, and its incredibly high Gini index of 0.5968, the fourth highest in the study. Household incomes are heavily skewed toward the high end, with 47.9% of all households earning $100,000 or more a year. Moreover, nearly a quarter of all households (24.9%) earn $200,000 or more a year. Meanwhile, 32.1% of households earn less than $50,000 per year and squeezed in between is the 20% of households that earn $50,000 to $99,999 per year.
North Carolina
County with highest income inequality: Bertie County
Gini index: 0.5517
Median household income: $37,571
Mean household income: $59,138
With a Gini coefficient of 0.5517, Bertie County has the highest income inequality in North Carolina; and out of the 50 counties in our final list, Bertie County’s inequality was 11th highest. The county seat is located at Windsor, with Bertie County’s eastern border being delimited by the Albemarle Sound and Chowan Rivers. Both median and average household incomes are very much on the low side, and an astonishing 19.5% of households earn $15,000 to $24,999. The portion of households that earn less than $50,000 a year is 62.7%, while more than a fifth (22.6%) of households earn $50,000 to $100,000 a year. Finally, there is a small though not insignificant proportion of households — 14.6% — that earn $100,000 or more per year.
North Dakota
County with highest income inequality: Cavalier County
Gini index: 0.5476
Median household income: $60,284
Mean household income: $105,220
North Dakota’s county with the highest income inequality is located up north, along the Canadian border, between 120 and 130 miles from Winnepeg. The gap between average household income ($105,220) and median household income ($60,284) is substantial, at $44,936. There is roughly the same percentage of households that earn between $50,000 and $100,000 (30.2%) as households that earn $100,000 or more a year (30.7%).
Ohio
County with highest income inequality: Noble County
Gini index: 0.5122
Median household income: $46,144
Mean household income: $70,433
The county with the highest income inequality in Ohio is Noble County, which is centered on the county seat of Caldwell as well as on Interstate 77, which runs through it north-to-south. The county’s top industries by employment, according to Data USA, are Health Care & Social Assistance (17.6% of the workforce), Manufacturing (14.9% of the workforce), and Retail Trade (14% of the workforce). Close to a fifth of all households (19.1%) earn $100,000 or more per year, while more than half of all households (53.4%) earn less than $50,000 per year.
Oklahoma
County with highest income inequality: Roger Mills County
Gini index: 0.5496
Median household income: $58,385
Mean household income: $90,856
About 130 miles west of Oklahoma City, Roger Mills County lies on the border with the Texas Panhandle. The county’s Gini coefficient of 0.5496 puts on among the top 15 counties with the highest income inequality in the study. Roger Mills County has a solid pillar of middle-income earners, with 19.1% of households making $50,000 to $75,000 a year. However, there’s also a considerable proportion of households earning $100,000 or more — 23.6% of households. Meanwhile, 45.8% of households earn less than $50,000 a year.
Oregon
County with highest income inequality: Wasco County
Gini index: 0.4817
Median household income: $57,853
Mean household income: $83,885
Wasco County, located in Oregon, boasts the highest income inequality of all counties in the state, yet its Gini coefficient of 0.4817 is almost identical to the national figure of 0.4818. Delving into the numbers reveals a deeper story: While the median household income in the county sits at $57,853, the mean swells to a much higher $83,885, indicating that there are households with incomes considerably above the average. This is further evidenced by the fact that 42.7% of households earn less than $50,000 annually, painting a picture of a significant portion of the population struggling to make ends meet. Meanwhile, 34.4% of households fall into the $50,000 to $99,999 bracket, and a notable 22.9% command incomes of $100,000 or more a year.
Pennsylvania
County with highest income inequality: Philadelphia County
Gini index: 0.5178
Median household income: $52,649
Mean household income: $77,454
Like its name suggests, Philadelphia County is centered upon and covers the entire city of Philadelphia. With a Gini index of 0.5178, income inequality in Philadelphia County is worse than the U.S.’s overall level, but it is still more equal than most of the 50 counties to make our list (ranking 28th out of 50). A little over one in 10 households (10.7%) earn less than $10,000 per year and 48.1% of households earn less than $50,000 per year. This is somewhat balanced by the 27.7% of households that earn $50,000 to $99,999 per year and the 24.1% of households that earn $100,000 or more.
Rhode Island
County with highest income inequality: Bristol County
Gini index: 0.4890
Median household income: $95,102
Mean household income: $132,141
Similar to other New England states, the county with the highest income inequality in Rhode Island — Bristol County — doesn’t have that bad of a Gini index: 0.4890 versus the U.S.’s 0.4818. Bristol County is just southeast of Providence, covering key cities like Bristol, Warren, and Barrington. The county is certainly a high-income place, with both the median and average household incomes being above their corresponding national figures. As such, just under half of all households (47.7%) earn $100,000 or more a year, compared to 26.3% of households earning $50,000 to $99,999 and 26.1% of households earning less than $50,000 a year.
South Carolina
County with highest income inequality: Charleston County
Gini index: 0.5158
Median household income: $70,807
Mean household income: $108,070
Charleston County covers far more than just Charleston or its immediate environs. The county stretches roughly 40 miles northeast of the city of Charleston and covers a wide swathe of land to the west. Charleston County has the highest income inequality of any county in South Carolina, but this is mainly due to household incomes being skewed towards the higher end. For instance, roughly the same proportion of households in Charleston County earn less than $50,000 a year (36.2% of households) as do those that earn $100,000 or more (36% of households). In the middle is 27.8% of households that earn $50,000 to $99,999 per year.
South Dakota
County with highest income inequality: McPherson County
Gini index: 0.5457
Median household income: $54,324
Mean household income: $86,710
McPherson County is located in northern South Dakota and lies along the border with North Dakota. It’s a small county with only a couple thousand inhabitants. The distribution of incomes by household is all over the place in McPherson County, with peaks like 15.6% of households earning $15,000 to $24,999 and 19.4% of households earning $50,000 to $74,999 as well as 15.5% of households earning $100,000 to $149,999 a year, intermixed with valleys of low percentages. According to Data USA, the three main industries by employment include Agriculture, Forestry, Fishing & Hunting (22.9% of the workforce), Health Care & Social Assistance (15.7% of the workforce), and Construction (11.2% of the workforce).
Tennessee
County with highest income inequality: Hancock County
Gini index: 0.5585
Median household income: $29,650
Mean household income: $57,955
Reportedly the fourth least populated county in Tennessee, Hancock County has the ninth highest level of income inequality in the study. With its county seat at Sneedville, Hancock County lies in northeastern Tennessee, bordering the western tail of Virginia. The income inequality here is less driven by a disproportionate number of high-earning households, and more driven by imbalances between lower-income households and middle-income households. For example, 26.7% of households in Hancock County earn between $50,000 and $100,000 a year, but a massive 63.8% of households earn less than $50,000 a year. Indeed, just under one fifth of all households (19.6%) earn $15,000 to $24,999 a year.
Texas
County with highest income inequality: Sherman County
Gini index: 0.5881
Median household income: $55,667
Mean household income: $111,110
Located in the Texas Panhandle, due north of Amarillo, lies Sherman County. Sporting a Gini index of 0.5881, income inequality in Sherman County is the fifth highest in the study. The gap between the average household income ($111,110) and the median household income ($55,667) is an enormous $55,443. And while 29.5% of households earn incomes of $50,000 to $99,999 per year, that figure is easily matched by the 24.9% of households that earn $100,000 or more per year.
Utah
County with highest income inequality: Summit County
Gini index: 0.5044
Median household income: $116,351
Mean household income: $176,064
Summit County is a sprawling entity, stretching far into eastern Utah as well as west, encompassing the affluent city of Park City, which like Aspen in Colorado’s most unequal county, is home to world-renowned ski resorts. Therefore, Summit County’s high income inequality is due to incomes being skewed toward the higher side. An incredible 55.9% of households in Summit County earn $100,000 or more a year, compared to 24.7% of households that earn $50,000 to $99,999, and just 19.3% of households that earn less than $50,000.
Vermont
County with highest income inequality: Lamoille County
Gini index: 0.5000
Median household income: $66,016
Mean household income: $98,015
Located east the city of Burlington and Lake Champlain, and not too far from the Canadian border, Lamoille County is Vermont’s most unequal county in terms of income. Interestingly, its Gini index of 0.5000 is right at the midpoint of the Gini index’s scale from zero to one. There is a substantial gap between average household income and median household income, of roughly $32,000. This is due in large part to the 30.6% of households that earn $100,000 or more a year versus the 32.5% that earn between $50,000 and $100,000, and the 36.8% that earn less than $50,000 a year.
Virginia
County with highest income inequality: Charles City County
Gini index: 0.5194
Median household income: $59,543
Mean household income: $87,501
Charles City County lies along the banks of the James River, which forms its southern border, along with the Chickahominy River forming its eastern one. This Virginia county is situated in between Richmond and Newport News. Just over one quarter of the households in Charles City County earn $100,000 or more a year. This is counterbalanced by nearly two-fifths (39.6%) of households that earn less than $50,000 a year and another 35.3% of households that earn between $50,000 and $100,000 a year. The county’s main industries, according to Data USA, are Manufacturing (12.5% of the workforce), Retail Trade (10.9% of the workforce), and Health Care & Social Assistance (10.2% of the workforce).
Washington
County with highest income inequality: San Juan County
Gini index: 0.5377
Median household income: $68,577
Mean household income: $110,926
Situated in the Salish Sea and at least a three-hour drive north by northwest of Seattle, San Juan County has the worst income inequality in Washington state. Just over a third of all households (33.9%) earn $100,000 or more a year, and a full 11% of households earn $200,000 or more. This stands against 30% of households that earn $50,000 to $99,999 and 36.1% of households that earn less than $50,000 a year. According to Data USA, the primary industries in terms of employment are Construction (13.5% of the workforce), Accommodation & Food Services (9.46% of the workforce), and Retail Trade (9.17% of the workforce).
West Virginia
County with highest income inequality: Pleasants County
Gini index: 0.5551
Median household income: $58,433
Mean household income: $97,696
The county with the highest income inequality in West Virginia — Pleasants County — is in northern West Virginia, along the border with Ohio and not far from the city of Marietta on the Ohio River. With a Gini index of 0.5551, Pleasants County’s level of income inequality is the 10th highest in the study. A surprisingly high proportion of households in the county — 28.5% — earn $100,000 or more per year. Meanwhile, a comparable percentage of households earn $50,000 to $99,999 — 29.4%. On the low end, 42.2% of households earn less than $50,000 a year.
Wisconsin
County with highest income inequality: Sawyer County
Gini index: 0.4921
Median household income: $53,011
Mean household income: $77,394
Located in northwestern Wisconsin, Sawyer County partially overlaps with the reservation of the Lac Courte Oreilles Band of Lake Superior Chippewa Indians. Although its Gini coefficient of 0.4921 makes Sawyer County the one with the highest income inequality in Wisconsin, compared to the national overall, the county’s level of inequality isn’t too bad. Income distribution among households in Sawyer County takes on a bell-shaped curve: 46% of households earns less than $50,000; 34% of households earn between $50,000 and $100,000; and 20% of households earn $100,000 or more per year.
Wyoming
County with highest income inequality: Teton County
Gini index: 0.5297
Median household income: $94,498
Mean household income: $159,027
Similar to Colorado’s most unequal county — Pitkin County, home to Aspen — and Utah’s most unequal county — Summit County, home to Park City — Teton County is home to the luxurious and distinguished Jackson Hole ski area. The high incomes of the inhabitants of this area are a prime contributor to the skew of income distribution toward the high end. Nearly half of all households (47.5%) earn $100,000 or more, while only 20.5% of households earn less than $50,000 a year and 31.9% of households earn $50,000 to $99,999 a year.
Never mind the macro stats for the U.S. economy — Americans are hot, and very much still bothered by high prices, with recent reports about GDP growth, stock gains and a strong labor market apparently providing cold comfort. At least so far.
Instead, most describe the economy as “uncertain,” along with calling it bad, and “struggling” but not improved.
So, there’s plenty of lagging skepticism hanging over the public mind after the turmoil of recent years and months of chatter about a potential recession. Almost no one is calling things “stable.”
And that’s the case despite relatively good feelings about the job market and job security.
It’s not just whether one has a job, but what your wages can buy you. Most of those working say their pay is not keeping pace with rising prices.
(The fact that most report paying higher electric bills and being forced indoors because of the heat waves may not be helping the mood either.)
And even if the rate of inflation is slowing, those price hikes have clearly left their mark.
Prices are the No. 1 reason people give when asked why they call the economy bad and the top reason given when they describe their personal financial situation as bad.
Interest rates, they report, are also a net-negative on their collective finances. Most, particularly younger people, report it’s harder to buy a home than for past generations.
It all adds up to most feeling they’re staying in place financially but not getting ahead, and many feeling that they’re falling behind and concerned about affording things now and retirement in the longer term.
As is often the case in these kinds of economic evaluations, what people see at the cashier, or on their bills on the kitchen table, has outsized impact over more abstract economic reports.
Here’s that comparison: Americans rate the job market stronger than the overall economy.
But many still think the prices they pay are going up. That may comport with macro data saying inflation is slowing, but price increases are still felt by consumers.
The politics
There’s plenty of skepticism about help from political leaders on either side of the aisle. It isn’t good news for the president.
Most tie both the U.S. economy and their own personal finances (whether bad or good) at least in part to President Biden’s policies — an important measure of both macro and micro connection — and also to that very immediate measure of prices.
Most don’t think the Biden administration is lowering inflation — another key metric to watch in coming months — and even fewer think congressional Republicans are taking actions that do so, with many not sure what they’ve done. As they campaigned to win the House majority last year, most voters expected them to prioritize dealing with inflation.
(For that matter, just a quarter think the Federal Reserve’s actions have lowered inflation, though many aren’t sure what it has done.)
The race to define “Bidenomics”
This also shows the challenge President Biden faces in his latest push to get the public to reconsider not just how they think of the economy, which few describe as “rebounding,” but also the meaning of the phrase his administration has coined, “Bidenomics.”
It is not, as of yet, a widely known term by any means.
The people who say they have heard something of the term skew Republican right now. So, to many of them, it looks more pejorative. Half say they equate it with “higher inflation” and even “tax increases,” by far the top two items chosen. That said, most independents also mention those two items first.
Democrats are more positive — if they’ve heard of it — so the president at least has some building blocks with his base. Majorities of them say it means “job creation,” “investment in infrastructure,” “help for the poor” and “the middle class” to them.
But this economic mood keeps weighing on the president’s overall numbers. His handling of the economy is as low as it’s been, along with his overall approval rating too, which has been hovering in the low-40s range for more than a year, now down to 40%.
The heat
And yes, most Americans are hot and report feeling unusually high temperatures in all regions of the country, as much of the U.S. sets heat records. They’re coping by staying inside more, keeping their kids inside and economically, one impact they report is having to pay higher electric bills.
This CBS News/YouGov survey was conducted with a nationally representative sample of 2,181 U.S. adult residents interviewed between July 26-28, 2023. The sample was weighted according to gender, age, race, and education based on the U.S. Census American Community Survey and Current Population Survey, as well as past vote. The margin of error is ±3.2 points.
Millions of Americans are living in communities mired in “deep disadvantage,” mostly rural locations stuck in generational poverty, but where some residents experience health outcomes that shorten average life expectancies to that of poor nations.
These are America’s “internal colonies,” according to a new book, “The Injustice of Place” (Mariner Books, August 2023), about the geography of poverty.
Researchers and co-authors Kathryn J. Edin, a sociology professor at Princeton University; H. Luke Shaefer, a professor of social justice and social policy at the University of Michigan; and Timothy Nelson, director of undergraduate studies in sociology at Princeton, have taken a deep dive into community-level data to create the “Index of Deep Disadvantage,” which combines poverty statistics with health measures, such as life expectancy, to examine trends across the nation.
The resulting map shows huge swaths of deeply disadvantaged locations across the nation’s 3,000 counties, places that are mostly located outside of the largest U.S. cities yet which share some traits: A history of resource extraction, unequal educational opportunities, a breakdown of social bonds, violence and local corruption. These locations also were linked to some of the most brutal aspects of U.S. history, from slavery to Appalachia’s coal mining practices, the authors note.
The authors and their researchers visited poor locations and talked with residents, and they came away with an observation: These regions effectively operate as “internal colonies” within the U.S., where residents lack access to the same opportunities as other Americans.
“It dawned on us, and we would have had to have been pretty foolish not to have noticed, that these places look like colonies — colonies within the United States,” Edin told CBS MoneyWatch. “We call them America’s internal colonies, and they really do have this history of extreme exploitation and extraction that you just don’t see to the same degree elsewhere in the U.S.”
This map, created by the authors of “The Injustice of Place,” illustrates where “deep disadvantage” exists across the U.S. The term describes poverty as well as poor health outcomes, such as lowered life expectancy, of its residents. The regions are primarily in South Texas, Appalachia and the Cotton Belt of the American South.
Kathryn Edin
The analysis comes as more researchers are focusing on the impact of geography on poverty, with the Economic Innovation Group earlier this month analyzing communities that suffer from “persistent poverty,” or intergenerational impoverishment. That group’s analysis found that 35 million Americans live in these regions, or more than 70% higher than earlier thought.
The “internal colonies” analyzed by Edin and her co-authors — Appalachia, the Tobacco Belt of Virginia and the Carolinas, the Cotton Belt in the South and South Texas — share additional economic traits that limit the social mobility of its residents.
“They were all mono-economies, are organized from one industry, and there are very few haves — and scores of have-nots,” Edin said. “There was really no middle class.”
She noted, “Nobody should be left behind to this extent.”
“The most unequal places in our nation”
The researchers opted for the term “deep disadvantage” to describe the intergenerational poverty in these regions because it implies a “moral sense of people being held back unfairly,” Edin noted.
The researchers, who previously examined the millions of Americans living on $2 a day, visited more than 130 of the 200 places of deepest disadvantage, going to diners and asking residents to sit with them and share their experiences, or meeting with local leaders. One aspect of these locations that surprised her was that great wealth often sits side-by-side with deep poverty.
“The Injustice of Place,” from HarperCollins’ Mariner imprint, examines the most disadvantaged places in the U.S. Most of them are rural, and have suffered from generations of poverty and neglect, the authors found.
HarperCollins
“You’d say, ‘Oh my goodness, what is this huge mansion doing in the midst of all of these tiny shotgun shacks?’” she recounted. “You think all these places are poor, but what you don’t realize is that they are the most unequal places in our nation. Wealth and poverty have always lived hand in hand in these places, but the wealth is in the hands of a very few.”
Some of the disadvantaged regions have markedly lower life expectancies than the U.S. as a whole and compared with wealthier counties. Men who live in McDowell, West Virginia, in the heart of Appalachia’s coal country, have an average life expectancy of 64 years old, on par with what is found in Bolivia or Ghana.
By comparison, men who live in wealthy counties such as Fairfax, Virginia, or Marin, California, can expect to live to 81 years on average.
“There’s nothing to do but drugs”
Appalachia has been devastated by the opioid epidemic. Traveling throughout the region, the researchers heard the same complaint again and again, Edin noted.
“‘There’s nothing to do but drugs,’” were the things coming out of everyone’s mouth and we were like, ‘Oh, come on, that can’t be important,’” she recounted. “But communities can only protect people if they have the key institutions that allow people to build social bonds, like the bowling alley.”
Edin added, “It wasn’t that the people weren’t going to the bowling alley — it was that there was no bowling alley any longer to go to. And it wasn’t just the bowling alley. It was the movie theater, it was the barbershop, it was the beauty salon. The roller rink was sitting vacant.”
The finding, which Edin said was one of the most unexpected things they hit upon, is reminiscent of sociologist Robert Putnam’s widely lauded 2000 book “Bowling Alone,” which explored the collapse of social institutions like bowling leagues and community groups, along with the consequent sense of alienation reported by many Americans.
The researchers counted the activities Appalachian residents engaged in to “test this claim,” she noted. “We did find that people did things, but there are almost all these solitary pursuits,” like fishing, hunting or watching TV, she noted. “Social infrastructure is as critical a life-and-death matter as is adequate physical infrastructure.”
Decades ago, pharmaceutical firms that make opioids had specifically targeted Appalachia, which had a combination of high disability claims and family physicians. That was attractive to drugmakers because people on disability automatically qualify for Medicaid, which meant their prescription painkillers would be covered. And they believed that family physicians would be more likely to prescribe painkillers to their patients. Combining an already sick population with tattered social bonds added fuel to the opioid crisis, the researchers contend.
Segregation academies
Meanwhile, residents in deeply disadvantaged areas in the South still have unequal school systems, which stems from decades of disinvestment in education for Black children, the researchers said. After Brown v. Board of education, which ruled that segregated schools were unconstitutional, many White communities created “segregation academies” — private schools geared for White children.
“They were just everywhere because Whites had degraded Black education to such an extent — Black kids were only getting 4 to 5 months of education a year because of the demands of sharecropping,” Edin noted. “Whites couldn’t imagine their children sharing schools with Black kids.”
But these academies, which still exist, pulled resources away from public schools, while funneling White students into private schools that often lacked rigorous teaching or educational standards.
“Segregation has actually deepened. It’s not gotten better,” Edin said of these areas.
Meanwhile, poor Southern residents, also feeling the impact of climate change — with stronger storms and punishing heat — are sometimes left out of government aid programs like FEMA’s disaster relief because they lack access to paperwork like property titles, the researchers found. Other communities are plagued by gun violence, which is linked to premature death and injuries, and also damages community bonds.
On top of that, funds for poor residents are sometimes siphoned by local corruption, such as in the recent case of fraud in Mississippi, in which officials allegedly stole millions of welfare dollars to squander on pet projects like drug rehab for a pro wrestler.
“A lot of government dollars flow to the local elites, who are the very extractors who will ensure that their pockets are aligned at the expense of the community,” Edin said.
Places that work
The U.S. also has regions where opportunity is more equally distributed, many of which are also rural, Edin noted. Such pockets of advantage are largely located in the Midwest in Nebraska, Iowa, Minnesota and Wisconsin.
“These places are just engines of mobility for generations,” Edin said. “These are places that work in the way we think America ought to, like they send tons of kids to college. A kid born poor has the same chance of reaching the middle class as a middle-class kid does — and this is the way America is supposed to work.”
The defining difference between these counties and America’s “internal colonies” can be found in social infrastructure, a strong middle class and lower inequality than in the nation’s poorest regions, she added.
The authors have some suggestions for aiding the regions of deep disadvantage, such as raising teacher pay, which would help lift the quality of public education, as well as tackling continued segregation in U.S. schools. More investment in public infrastructure and eradicating political corruption would also help, they note.
“Americans have a lot of fears about people being dependent and living off the government dollar, but they still believe that America should be a place that’s fair and where children have an equal chance of getting ahead, no matter what part of the income distribution they grew up in,” Edin said. “We’re not saying give everyone a handout. We’re talking about specific policies that will allow people more of a fighting chance to achieve the American Dream.”
