[Vision2020] States Where the Middle Class Is Dying

Kenneth Marcy kmmos1 at frontier.com
Thu Jan 22 08:49:25 PST 2015

States Where the Middle Class Is Dying


The American economy is by many measures well on the road to full 
recovery. The national unemployment rate was 6.2% in 2013, down from 
9.3% in 2009; U.S. gross domestic product grew 5% in the third quarter 
of 2014; and the S&P 500 recently reached its all time high. And yet the 
middle class, which historically was the driver of economic growth, is 
falling behind. The average income among middle class families shrank by 
4.3% between 2009 and 2013, while incomes among the wealthiest 20% of 
American households grew by 0.4%.

Based on average pre-tax income earned by the third quintile, or the 
middle 20% of earners in each state, middle class incomes in California 
declined the most in the country. Incomes among middle class Californian 
households fell by nearly 7% between 2009 and 2013, while income among 
the state’s fifth quintile, or the top 20% of state earners, grew by 
1.3%. Based on an analysis of household incomes among America’s middle 
class, these are the states where the middle class is suffering the most.

*7. Idaho*

*> Middle income growth 2009-2013:* -4.7%
*> Fifth quintile income growth 2009-2013:* 1.0%
*> Fifth quintile share of income:* 47.8%
*> Middle class household income:* $46,933 (13th lowest)

The wealthiest fifth of Idaho households earned $144,885 on average in 
2013. While this was among the lowest incomes in that cohort, it was 
also a 1% increase from 2009, more than double the comparable nationwide 
growth rate. Average income among Idaho’s middle earners, on the other 
hand, fell by 4.7% over that time to less than $47,000. This was also 
one of the lower average incomes in the country. While the income gap is 
worsening in Idaho, income is still more evenly distributed compared to 
most of the nation. Idaho had nearly the lowest Gini coefficient in 
2013. Less than 5% of Idaho’s labor force participated in a labor union 
in 2013, less than half the national figure.

5. Washington*
*> Middle income growth 2009-2013:* -5.0%
 >*Fifth quintile income growth 2009-2013*: 1.3%
*> Fifth quintile share of income:* 49.2%
*> Middle class household income*: $58,752 (13th highest)

The average income among middle class households in Washington fell 
faster than in most states between 2009 and 2013. Incomes among the 
wealthiest 20% of households in the state, however, grew faster than 
comparable figures across the nation. In an interview with 24/7 Wall 
St., Joe Valenti, an analyst with the Center for American Progress, 
argued that Washington’s tax climate may present an additional burden to 
those suffering from income stagnation. Without an an income tax, the 
state relies more heavily on its sales tax to generate revenue, for 
example. A higher sales tax will often disproportionately affect 
lower-income residents who not only tend to consume more as a percentage 
of their income, but also may have less opportunities to drive across 
state lines to take advantage of a lower tax rate. Nearly 20% of 
Washington’s workforce was part of a union in 2013, one of the highest 
rates. Yet, this did not appear to have an effect on the distribution of 
income in Washington.


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