Personal Finance

The States With the Biggest Income Gaps

Advertiser Disclosure Comments 1 Comment

Income inequality is becoming the centerpiece of the election, with both President Obama and former Governor Mitt Romney stumping around the country on economic issues.

In fact, both presidential candidates have released long-form commercials recently laying out their economic arguments.

Perhaps this is because the real economic recovery isn’t quite hitting home yet. A recent Census Bureau report took a dive into the household incomes across the U.S. in 2011. The major findings showed a decline of 1.3 percent in median household income, as well as an increase in a measure of income inequality in 20 states.

The Gini Index is a measurement used to demonstrate income inequality in a specific geographic area, such as a state. The index ranges from 0 to 1. The closer the 1 the Gini Index is, the more disproportionate the wealth distribution. In fact, a score of 1 on the index indicates that one household has all the wealth of a specific area.

Overall, the U.S. had a Gini Index of 0.475 in 2011, a major jump from its 2010 stat of 0.469. That stems from 20 states seeing a statistically significant rise in their own index number, and absolutely no states seeing a decline in the index.

Some states saw major jumps in their Gini numbers, with West Virginia, Maine and New Mexico seeing the largest increases from 2010.

Here are the 10 states that now have the highest Gini Index, and thus have the biggest income inequality among residents.

8. (TIE) Massachusetts | 0.477
8. (TIE) Texas | 0.477
8. (TIE) Georgia | 0.477
6. (TIE) Florida | 0.481
6. (TIE) California | 0.481
5. New Mexico | 0.482
4. Louisiana | 0.484
3. Connecticut | 0.486
2. New York | 0.503
1. District of Columbia | 0.534

Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.