Income Inequality Grows Significantly in 2011

September 20th, 2012
in econ_news, syndication

Econintersect: According to the results of the 2011 American Community Survey (ACS), the USA's income inequality grew significantly.  The Gini Index, which measures income inequality, rose in 20 states and remained statistically unchanged in the other 30 and the District of Columbia.


Follow up:

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This post uses the term Gini Index which is:

Summary measure of income inequality. The Gini Index varies from 0 to 1, with a 0 indicating perfect equality, where there is a proportional distribution of income. A 1 indicates perfect inequality, where one household has all the income and all others have no income.

Income Inequality:

The Gini Index for the United States in the 2011 ACS (0.475) was significantly higher than in the 2010 ACS (0.469). This increase suggests more income inequality across the country. The Gini Index for the 2011 ACS increased in 20 states. The remaining 30 states and the District of Columbia showed no statistically significant change between the 2010 ACS and the 2011 ACS. No state had a decrease in the Gini Index between the 2010 ACS and 2011 ACS. This increase in 20 states between 2010 ACS and 2011 ACS can be compared with the change between the 2009 ACS and 2010 ACS when there was an increase in Gini Indexes in nine states. Gini Indexes from the 2011 ACS ranged from 0.534 in the District of Columbia to 0.408 in Wyoming (Figure 2).4 Five states and the District of Columbia had a Gini Index higher than that for the United States—California, Connecticut, Florida, Louisiana, and New York. There were 33 states with Gini Indexes lower than the U.S. Index. The remaining 12 states had a Gini Index which was not statistically different from the U.S. Index.

What Is the American Community Survey?

The American Community Survey (ACS) is a nationwide survey designed to provide communities with reliable and timely demographic, social, economic, and housing data for the nation, states, congressional districts, counties, places, and other localities every year. It has an annual sample size of about 3.3 million addresses across the United States and Puerto Rico and includes both housing units and group quarters (e.g., nursing facilities and prisons). The ACS is conducted in every county throughout the nation, and every municipio in Puerto Rico, where it is called the Puerto Rico Community Survey. Beginning in 2006, ACS data for 2005 were released for geographic areas with populations of 65,000 and greater.

Steven Hansen

source: US Census

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