Wed, April 24, 2024

Simon Says: Where do the numbers stand on income inequality?

Income inequality in the U.S. has been rising since 1980. However, the latest data for 2020 show a steep decline as shown in the chart below. The Gini index for the U.S. fell from 41.5 in 2019 to 39.7 in 2020. A value of 0 implies perfect equality and 100 implies perfect inequality. The decline probably represents the Covid checks and other support sent out by the federal government in 2020.

Locally, county Gini estimates for 2021 show higher inequality. Columbia County had a Gini index of 41.9 and Richmond County was 49.1, although they are for different years than the national data.

eoy CAMPAIGN HEADER

There are other ways of measuring inequality besides the Gini index. The income ratio measures the ratio of the mean income for the highest quintile (top 20 percent) of earners divided by the mean income of the lowest quintile (bottom 20 percent) of earners. The evidence of changes in inequality in local counties is mixed. Columbia County has seen little change over the last decade and has the lowest level of inequality in the metro area. Richmond County saw inequality rise between 2010 and 2016, but it has since fallen. Aiken County saw inequality fall at the beginning of the last decade and has remained constant since then.

Income represents an outcome of individual choices and institutional constraints, so some inequality is inevitable as people choose different career paths and occupations. A society should, however, strive for equality of opportunity. One way economists measure this opportunity is through intergenerational mobility. In other words, is a child’s income highly associated with their parent’s income? If so, this indicates low intergeneration mobility, and if you are born to poor parents, it is estimated it may take five generations before you earn the average national income. The U.S. compares poorly with other countries. The states that have the lowest mobility are in the South and some parts of the eastern Midwest. Black families are particularly disadvantaged.

According to Raj Chetty and his co-authors, mobility, and opportunity can be improved through less residential segregation, better elementary schools, greater social capital, and greater family stability.

Subscribe to our eNewsletter for the BEST local business news delivered to your Inbox each week day.

* indicates required

Leave a comment

Your email address will not be published. Required fields are marked *

More Posts

Women In Business: Shnita Wiley

Name: Shnita Wiley Title: Owner, Blessed Hands Wellness Spa Start Date: August 2021 Phone: 706-399-9624 Website:  https://www.bhwellnessspa.com/ The blessed hands of Shnita Wiley have been focused