Economy Report
11:00 am
Thu October 27, 2011

Income inequality lower than average in NW, says census report

New numbers show the gap between the rich and poor has grown across the nation. But income inequality in the Northwest is lower than the national level. That's according to an analysis released Wednesday by the U.S. Census Bureau.

The report is based on survey data collected between 2005 and 2009 – three years of economic growth, plus two years of recession.

It uses three different measurements. And in all of them, Oregon, Idaho and Washington have lower-than-average levels of income inequality. That is, the spread between high wage earners and low wage earners.

'Low bar'

In fact, the Northwest is like most areas of the country – except some key places that pull up the national average of disparity, such as New York, Miami, Los Angeles, Houston and the Bay Area.

"Basically, I would describe it this way. There are a cluster of hotspots of inequality and then there's everyone else," says Eric de Place of the Seattle-based Sightline Institute, a conservation-oriented think tank.

Even though the Northwest has a lower ratio of disparity compared with the country as a whole, he argues the level of income inequality is high.

"Doing better than the national average is clearing a pretty low bar."

Effect of rural areas

The Census Bureau analysis comes on the heels of a report out this week from the Congressional Budget Office on distribution of household income. It found that the top 1 percent of earners more than doubled their portion of the nation's income in the last 30 years.

De Place says rural parts of the Northwest may not be seeing as dramatic disparities in income compared with urban centers.

"There aren't the extremes of high income earners in rural areas," de Place explains. "Incomes tend to be quite a bit lower. You certainly do see relatively high rates of poverty in some areas but not all."

He notes one surprising statistic in the Census Bureau report: the Seattle area, despite being home to billionaires like Bill Gates, is still below the national average for income inequality. In fact, it ranks just above Portland.

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