Business

US income inequality jumps to the highest level ever recorded




  • The income inequality in the United States reached its highest level in more than half a century last year.
  • While the economy has steadily expanded over the last decade, it has disproportionately benefited some of the wealthiest Americans.
  • In February, Federal Reserve Chairman Jay Powell said income inequality would be one of the biggest challenges for the United States over the next decade.
  • Visit the Business Insider homepage for more stories. [19659005] Income inequality reached its highest level of more than half a century last year, as a record-breaking economic expansion continued to be disproportionate in favor of some of the wealthiest Americans.

    A key asset allocation target jumped to 0.485 in 201[ads1]8, the Census Bureau said Thursday, the highest reading since the so-called Gini index was started in 1967. The meter, which uses a scale of 0 to 1, stood at 0.482 a year earlier .

    Alabama, Arkansas, California, Kansas, Nebraska, New Hampshire, New Mexico, Texas and Virginia saw income inequality increase significantly last year. Washington, DC and Puerto Rico saw the highest Gini index readings, while Utah was among the lowest.

    Real median household income rose 0.8% to $ 61,937 in 2018, slightly less than in the previous three years. The economy has expanded steadily over the last decade, which has helped push unemployment to historically low levels.

    But a majority of the growth has gone to higher earners and owners of financial instruments, said Timothy Smeeding, a professor at the University of Wisconsin at Madison who studies poverty and economic mobility.

    "Wages remain low, there is a lack of childcare for families with a single parent and so on. Work alone does not solve poverty – unless wages and income increase significantly," he said. "It still takes state aid for families with children and others who do not earn enough, despite working 40 plus hours a week."

    Jay Powell, chairman of the Federal Reserve, has reiterated concerns about economic mobility in the United States. In February, he said, income inequality would be one of the biggest challenges the United States will face over the next decade.

    "We want wealth to be shared widely," Powell said. "We need politics to get it done."

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