The rise in inequality experienced in the United States in the past three-and-a-half decades is not just a story of those in the financial sector in the greater New York City metropolitan area reaping outsized rewards from speculation in financial markets. While many of the highest-income families do live in states such as New York and Connecticut, IRS data make clear that rising inequality and increases in top 1 percent incomes affect every state.
The rise between 1979 and 2007 in top 1 percent incomes relative to the bottom 99 percent represents a sharp reversal of the trend that prevailed in the mid-20th century. This earlier era was characterized by a rising minimum wage, low levels of unemployment after the 1930s, widespread collective bargaining in private industries, and a cultural and political environment in which it was outrageous for executives to receive outsized bonuses while laying off workers. Today, millions of Americans feel tremendous anxiety about their grasp on the American Dream.
In 2013, income inequality was much higher in many states, metropolitan areas, and counties than for the United States overall. In 2013 the top 1 percent of families nationally made 25.3 times as much as the bottom 99 percent (Sommeiller, Price, and Wazeter 2016).