Report: Income Gap Larger in Blue States

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A new report shows there is a growing income gap between the richest and middle class, but more interesting is where it is happening.  The study from the Economic Policy Institute examined the average income of the top one percent of earners in each state, versus the overall average income of that state.  The results were wide income disparities across all states, but in particular in blue states.  The average gap between the top one percent and the median income in states carried by Hillary Clinton was 23.6-to-1, as opposed to an average gap of 19.7-to-1 in states carried by Donald Trump.

The numbers aren't necessarily surprising to those who follow economic trends.  "This research is looking essentially at just where are those highest incomes, and certainly by that metric it tends to be in the Northeast of the United States, compared to say the Midwest or the South," says Mark Price, labor economist at Keystone Research Center.  In particular, he isn't surprised that blue state strongholds like New York and California have the largest income gaps.  "The New York City metropolitan area representing Wall Street, and in California there's Silicon Valley and to a lesser degree Hollywood and Los Angeles...those are the real standouts," says Price.

One of the biggest factors in the growing income gap between rich and middle class has been stagnant wage growth for middle class earners.  "As our economy grows, even though profits may be rising, that doesn't show up in people's paychecks," says Price.

Regardless of location, it is undeniable that some people are getting richer.  Texas, although a solid red state carried by Trump, was actually pretty high on the income disparity list, ranking 11th with a ratio of about 24-to-1 for the top one percent versus the median.  "Whether you're looking at New York City or Texas, it's clear that over time incomes have grown much faster for folks at the top of the income distribution than they have grown for everyone else," says Price.

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