20+ Shocking Income Inequality Statistics [2023]

Research Summary: Income inequality has been increasing for some time, making it a more prevalent and pressing issue in the US. More specifically, income inequality has risen drastically since 1980.

This is causing serious issues for the American public, especially those living in poverty. Combined with recent inflation, income inequality is a recipe for disaster.

To find out more about the current state of income inequality in the US, we’ve gathered essential facts about income inequality. According to our extensive research:

• The US has an income inequality Gini coefficient of 0.485 out of 1.

• The top 1% of households in the US own 32.3% of the wealth.

• Total US gift spending is expected to reach $178 billion in 2022.

• 50% of the poorest Americans own only 2% of US wealth.

• The top 1% make 132X more than the bottom 99%.

For further analysis, we broke down the data in the following ways:
General | Wealth | Income | Regional | Global

OECD Countries With The Highest Inequality (2017)

General Income Inequality Statistics

To understand just how big of an issue income inequality has become in the US, here are some insightful general statistics about income inequality in 2022:

• The income gap between the top tenth and bottom ninth percent increased by 4.9% between 2020-2021.

  The COVID-19 Pandemic triggered a massive spike in income inequality in the US, with the incomes of the top tenth percent increasing to 13.53X more than the bottom 90th percent.

• The Gini coefficient in the US is 0.38 out of 1.

  This coefficient is an economic tool that measures the dispersion of income or distribution of wealth within a population. A measurement of one would indicate complete inequality, while zero would suggest complete equality. At 0.38, the US is the seventh most unequal OECD country.

• The top 1% of Americans earn 20% of all income.

  To be considered among the top 1% of earners, Americans need to make at least $597,815 per year. Conversely, the median annual income in the US is only $70,784.

Wealth Inequality Statistics

Just a few of the richest American households own more wealth than most other Americans combined. More specifically, here are some insights our research uncovered:

• The top 10% of the richest households in the US own 70% of the country’s wealth.

  More specifically, this 70% is split between the top 1%, who own 32.3%, while the next 9% own approximately 37.7%.

• The average CEO makes 324x more than the average worker as of 2021.

  Believe it or not, the average compensation for an S&P 500 CEO is $18.3 million. Further, just from 2019 to 2021 alone, the amount these CEOs make has increased from 264x more than the average worker to 324x more.

• Between 1980 and 2015, the share of global wealth held by the top 1% increased from 16% to 20%.

  On a global scale, private wealth has been on the rise for decades. In 1970, private holders owned 200–350% of national income in most rich countries, but today, those numbers are 400–700%.

Income Inequality Over Time

Income inequality has been steadily increasing over time, especially in the US. To find out more, here are some interesting income inequality trends:

• Income inequality between the richest and poorest families in the US doubled between 1989 and 2016.

  In 1989, the top 5% of richest Americans owned 114x as much wealth as the bottom quarter of Americans. However, by 2016 they owned 248x more.

• Between 1970 and today, the portion of Americans who live in middle-income households fell by 18%.

  In 1970, roughly 61% of all Americans lived in middle-income households. As of 2021, only 50% of Americans now live in middle-income households.

• Between 2020-2021, the real median income for US families fell by -0.6%.

  Between 2019 and 2020, this decrease was even more noticeable, at -2.9%. By contrast, the average income of those within the top 1% increased by 10.9% between 2020-2021.

• Wage growth for the top 1% was 160.3% between 1979-2019.

  By contrast, those in the bottom 90% have only seen their wages grow by 26% within that same time frame.

  Income Level	Wage Growth (1979-2019)
  Bottom 90%	26.0%
  90th-95th	51.8%
  95th-99th	75.1%
  Top 1%	160.3%
  Top 0.1%	345.2%

Regional Income Inequality Statistics

Income inequality can also vary based on region, as certain areas in the US are more prone to the greater disparity. For example, consider the fact that some of the biggest tech cities in the US (like San Fransico) also have major homeless problems.

To dive deeper into how location impacts income inequality, here are some essential facts:

• The state with the highest Gini coefficient is New York, at 0.51.

  Others among the top five states with high Gini coefficients in 2022 include Louisiana, California, Connecticut, and Florida, which all have a coefficient of 0.49.

• The state with the lowest Gini coefficient is Alaska, at 0.417.

  Others among the five states with low Gini coefficients in 2022 include Utah (0.43), Wyoming (0.43), New Hampshire (0.434), and Hawaii (0.437).

• Miami Beach is the city with the highest Gini coefficient in the US, at 0.598.

  Miami beach has the highest level of income inequality in the US. Conversely, the city with the lowest income inequality in Eagle Mountain, Utah, with a Gini coefficient as low as 0.282.

Global Income Inequality Statistics

While income inequality is regularly discussed in the US; it is also a broader issue on the global stage. While all countries vary in inequality, here are some noteworthy trends:

• South Africa has the highest Gini coefficient in the world, at 0.62.

  This measurement was taken in 2017 but has likely stayed the same in the past few years. Other countries with extremely high Gini coefficients in 2022 include Suriname (0.579), Zambia (0.571), Sao Tome and Principe (0.563), and the Central African Republic (0.562).

• Since 1995, the top 1% have captured 19x more wealth than the bottom 50% of humanity.

  The top 2,153 billionaires own more wealth than 60% of the world’s global population. That’s equivalent to 4.6 billion people.

• 71% of the world’s population lives on less than $10 per day.

  That’s over 5.2 billion people. Even more shockingly, 10% of the world’s population lives on less than $2 a day (over 700,000 people).

Income Inequality Statistics FAQ

1. What are the biggest causes of income inequality?

   There are several big causes of income inequality. These include

   • Technological progress. Technology can commonly worsen income inequality by creating products that only the wealthy can afford and benefit from. In the case of automation, many of the poorest people may have their jobs replaced by AI, leaving them in an even worse state than before.

   • Globalization. When work is offshored to countries with a lower standard of living, this benefits only the wealthiest people and harms both the original workers who were paid more and the new workers who are not paid fairly for their work.

   • Commodity price cycles. Commodities tend to undergo natural cycles over time, and when these commodities are in more pronounced booms and slumps, this can affect income inequality.

   • Domestic economic policies. The way governments choose to run the economy can have a profound effect on income inequality. For example, the US removed the Glass-Steagall Act in 1999, which allowed banks to make more unstable investments and ultimately contributed to the 2008 crash and subsequent recession.

   • Economic instability. World events like the COVID-19 Pandemic can cause massive economic instability, which leads to income inequality. For instance, the richest people in the US grew richer at a much higher rate during the Pandemic.

   • Debt and inflation. During the COVID-19 Pandemic, the US printed unprecedented amounts of money. This and many other factors have contributed to increased rates of debt and inflation, which in turn increases income inequality.

   • Education disparity. When wealthy citizens receive a good education, and this is financially out of reach for poorer citizens, it perpetuates the cycle of income inequality. The wealthy are trained for high-paying jobs that require education, while the poor are stuck with low-paying jobs.

2. Who suffers the most from income inequality?

   Those who suffer the most from income inequality include people living in poverty, women, and racialized and marginalized groups. For example, women are 35% more likely to be poor than men in the US, and more than double the amount of Black Americans live in poverty when compared to White Americans (10.7% compared to 5.4%).

3. How can income inequality be overcome?

   There are many ways income inequality can be overcome. These include

   • Raising wages for low-income earners

   • Increasing the availability of benefits for all workers

   • Correlating the amount of income tax owed with the income of the individual

   • Capping the ratio of top executive pay to worker’s pay

   • Raising carried interest taxes

   • Reducing home mortgage interest deduction

   • Establishing a universal basic income program

   • Closing offshore tax havens

   • Passing a tax on financial transactions

   • Increasing tax on luxury goods

   • Raising the estate tax

Conclusion

With inflation on the rise, income inequality has reentered the minds of many Americans as a prevalent issue. And it is, as the top 1% make 132X more than the bottom 99% in the US. In other words, the top 1% of households in the US own 32.3% of the wealth, while the bottom 50% own only 2% of the wealth.

What’s more, the US isn’t alone. Many OECD countries struggle with high rates of income inequality. Shockingly, the top 2,153 billionaires own more wealth than 60% of the world’s global population (4.6 billion people).

Countries will need to invest in workers’ rights and close down loopholes that the wealthy take advantage of. Not only would these measures benefit the most vulnerable among us, but they also stimulate the economy in a more healthy way if they are to overcome inequality and human right violation.

References

1. OECD – Income inequality

2. CNBC – Soaring markets helped the richest 1% gain $6.5 trillion in wealth last year, according to the Fed

3. Insider – The bottom half of American families hold just 2% of the country’s wealth — while the top 1% of families have a third

4. EPI – Income inequality in the United States

5. United States Census Bureau – 2021 Income Inequality Increased for First Time Since 2011

6. Fortune – How much you need to earn to be in the top 1% is wildly different for each state

7. Pew Research Center – Trends in income and wealth inequality

8. WID.World – What is the aim of the World Inequality Report 2018?

9. Fast Company – The age of ‘reflation’ is here: See how obscene CEO-to-worker pay ratios are right now

10. Pew Research Center – How the American middle class has changed in the past five decades

11. EPI – Wages for the top 1% skyrocketed 160% since 1979, while the share of wages for the bottom 90% shrunk

12. World Population Review – Income Inequality by State 2022

13. World Population Review – Wealth Inequality by Country 2022

14. Fast Company – Oxfam pushes global billionaire tax to fix income inequality

15. CNN Business – 71% of the world’s population lives on less than $10 a day

Author

Jack Flynn

Jack Flynn is a writer for Zippia. In his professional career he’s written over 100 research papers, articles and blog posts. Some of his most popular published works include his writing about economic terms and research into job classifications. Jack received his BS from Hampshire College.