It is fashionable to label income disparities as income inequalities or worse ….inequities. Whatever name is attached to them, they do exist and the reasons for them are many.
There’s data from the Census Bureau or the Bureau of Labor Statistics on disparities by race, gender, occupation, industry, families, and individuals. Income figures may include just earnings (wages and salaries), or have interest, dividends, rent, Social Security, Medicare, pensions and retirement accounts thrown in.
Now, the Bureau of Economic Analysis has personal income data by household. New fodder for political battles and academic disputes. Let’s dive right in.
In Indiana, in 2012, the median household personal income was $75,702 (31st among the 50 states). After adjustment for inflation (that is, in 2012 dollars), that figure rose in 2019 to $84,026 (32nd in the nation). It was an 11% increase, 29th highest in the U.S. (More recent data were distorted by the Covid epidemic)
In 2012, the highest median personal income for households was $106,370 (Alaska) and the lowest $66,041 (Florida). In 2019, the highest median was $113,499 (Alaska) and the lowest $75,904 (Kentucky). The spread between the highest and the lowest declined from 61% to 50%. Hence, with this metric, we can say income disparities among the states decreased.
But no one gets into a lather about income disparities among the states. We just make excuses why our state’s income isn’t higher. The favorite Hoosier rationale is our “lower cost of living” and the ease of living in paradise.
From 2012 to 2019, 29 states experienced a decline in the share of personal income going to the top 10% of households. Within Indiana, in 2012, the top 10% of households had 35.1% of the state’s personal income (20th highest in the nation), a figure which improved to 33.4% in 2019 (32nd highest).
In that same period, 36 states saw the bottom 10% of households in the nation increase their shares of personal income. For Indiana, where the bottom 10% had a mere 1.9% share (tied for the 12th highest state) we improved to 2.2% (tied for the 6th highest slot.
What? No bells tolling the good news? No headlines in the ghost newspapers? “Hoosier income disparities decreasing!”
Last week we asked: “Is it possible that our increasing earnings per job and per capita are related to income disparities in Indiana?” The answer seems to be Yes. Our slightly improved economic situation may have decreased just slightly Indiana’s income disparities. Slightly and not enough to strike up the band even for the most bumptious bandmasters in our state.
It could be increased federal assistance to the poor and more income for retired workers together had a larger positive effect than the earnings increases identified last week. Rising tides don’t lift boats with heavy anchors and short chains.
Mr. Marcus is an economist. Reach him at [email protected]. Follow him and John Guy on Who Gets What? wherever podcasts are available or at mortonjohn.libsyn.com.
