10 States With the Biggest Income Inequality

The wealth gap between America’s highest earners and the rest of the U.S. population has never been greater, and it’s a discrepancy poised to continue growing, according to various studies done on the topic. In 2013, upper-income Americans had a median net worth 6.6 times greater than their middle-income counterparts, according to the Pew Research Center.

In that analysis, a three-person household with an income greater than $114,300 qualified as upper income, and the same size household with at least a $38,100 annual income was classified as middle income. By these measurements, 46% fell into the middle income group, 33% were lower income and 21% were upper income in 2013. The Pew figures compare families’ overall net worth, meaning the difference between their assets (income, investments and so on) and debts.

If you set aside debts and savings, there’s still a great gap between Americans’ financial situations on either end of the spectrum. The least wealthy Americans likely have more debt and less savings than those with a higher net worth, but their incomes are significantly lower, as well. The highest earners in the U.S. made 5.02 times more than the lowest earners in 2013, according to data from the U.S. Census Bureau. Nationwide, the top 20% of earners had an annual household income of $106,096 in 2013, while the bottom 20% had an annual household income of less than $21,160. The Corporation for Enterprise Development used this data to show how income inequality varies across the country — here are the areas where the disparity is greatest.

10. Connecticut
Top 20% annual household income: Greater than $138,034
Bottom 20% annual household income: Less than $26,599
Income inequality factor: 5.19

9. California
Top 20%: Greater than $124,936
Bottom 20%: Less than $23,980
Income inequality factor: 5.21

8. New Jersey
Top 20%: Greater than $141,057
Bottom 20%: Less than $27,002
Income inequality factor: 5.22

7. (tie) New Mexico
Top 20%: Greater than $90,478
Bottom 20%: Less than $16,927
Income inequality factor: 5.35

7. (tie) Alabama
Top 20%: Greater than $88,967
Bottom 20%: Less than $16,625
Income inequality factor: 5.35

5. Mississippi
Top 20%: Greater than $79,596
Bottom 20%: Less than $14,509
Income inequality factor: 5.49

4. Massachusetts
Top 20%: Greater than $134,004
Bottom 20%: Less than $24,181
Income inequality factor: 5.54

3. New York
Top 20%: Greater than $120,906
Bottom 20%: Less than $21,159
Income inequality factor: 5.71

2. Louisiana
Top 20%: Greater than $94,740
Bottom 20%: Less than $16,322
Income inequality factor: 5.8

1. District of Columbia
Top 20%: Greater than $151,132
Bottom 20%: Less than $20,151
Income inequality factor: 7.5

Income has no direct bearing on a consumer’s credit standing, but higher earnings can make it easier for consumers to pay their bills and make on-time loan payments. Such behaviors are crucial to keeping credit reports free of debt collection accounts or other negative information, which is important if you want to access credit products at low interest rates. No matter how much money you make, it’s a good idea to regularly check your credit scores — you can get two credit scores for free every 30 days on Credit.com.

10 States With the Biggest Income Inequality

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