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The income gap between the richest and poorest Americans grew last year to the widest amount on record as young adults — and children in particular — struggled to stay afloat in the recession, though the divide in Utah was among the smallest in the nation.
The Beehive State also continues to have one of the highest homeownership rates in the country, running counter to a national trend.
The findings were among a broad array of new Census Bureau data released Tuesday that document the far-reaching impact of a business slump that experts say technically ended in June 2009 — considerably fewer homeowners, people doubling up in housing to save money and a surging demand for food stamps.
The top-earning 20 percent of Americans — those making more than $100,000 a year — received 49.4 percent of all income generated in the United States, compared with the 3.4 percent earned by those below the poverty line, according to newly released census figures. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968.
A different measure, the international Gini index, indicated that U.S. income inequality at its highest level since the Census Bureau began tracking household incomes in 1967. The U.S. also has the greatest disparity among Western industrialized nations.
At the top, the wealthiest 5 percent of Americans, who earn more than $180,000, added slightly to their annual incomes last year, census data indicate. Families at the $50,000 median level slipped lower.
"Income inequality is rising, and if we took into account tax data, it would be even more," said Timothy Smeeding, a University of Wisconsin professor who specializes in poverty. "More than other countries, we have a very unequal income distribution, where compensation goes to the top in a winner-takes-all economy."
Three states — New York, Connecticut and Texas — and the District of Columbia had the largest gaps in rich and poor, disparities that exceeded the national average. Similar income gaps were evident in large cities such as New York, Miami, Los Angeles, Boston and Atlanta, home to both highly paid financial and high-tech jobs and clusters of poorer immigrant and minority residents.
On the other end of the scale, Alaska, Utah, Wyoming, Idaho and Hawaii had the smallest income gaps.
Salt Lake City economist Jeff Thredgold said it makes sense that Utah would be on the low end.
"Utah doesn't have a lot of Fortune 500 companies, and it doesn't have a lot of investment bankers earning seven-, eight-figure incomes. We just don't have a lot [of jobs] at the highest incomes," he said.
On the other hand, "we also don't have a large share of poor neighborhoods, either. We have our share of poor areas, but we don't have the high concentration of poor neighborhoods that you would find in Los Angeles, Cleveland or St. Louis."
Mark Knold, chief economist at the Utah Department of Workforce Services, agrees. Without extremely high-paying jobs in Utah, such as in money-management firms and oil companies, there is less of a gap between the highest-paid and lowest-paid Utah workers.
According to the census report, lower-skilled adults age 18 to 34 had the largest jumps in poverty last year, as employers kept or hired older workers for the dwindling jobs available, Smeeding said. The declining economic fortunes have caused many unemployed young Americans to double up in housing with parents, friends and loved ones, with potential problems for the labor market if they don't get needed training for future jobs, he said.
Rea Hederman Jr., a senior policy analyst at The Heritage Foundation, a conservative think tank, agreed that census data indicate that families of all income levels had tepid earnings in 2009, with poorer Americans taking a larger hit.
"It's certainly going to take a while for people to recover," he said.
Nationally, homeownership declined for the third year in a row, to 65.9 percent, after hitting a peak of 67.3 percent in 2006. Residents in crowded housing held steady at 1 percent, the highest since 2004, a sign that people continued to double up to save money.
Utah continued to have one of the nation's highest homeownership rates —71.5 percent. That's eighth-highest among all states and Washington, D.C., and significantly higher than the national average of 65.9 percent. The nation's capital had the lowest rate of owner-occupied housing units, 44.8 percent, followed by New York (55 percent) and California (56.6 percent). —
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Income gaps
States with largest
New York
Connecticut
Texas
States with smallest
Alaska
Utah
Wyoming —
Homeownership rates
State/% of owner-occupied homes
1. Minnesota 73.7%
2. Delaware 73.6%
3. West Virginia 73.6%
4. Michigan 73.2%
5. Maine 72.7%
6. New Hampshire 72.5%
7. Iowa 72.1%
8. Idaho 71.5%
9. Utah 71.5%
10. Vermont 71.3%
United States 65.9%
49. California 56.6%
50. New York 55%
51. District of Columbia 44.8%