November 2012

Pulling Apart: Connecticut Income Inequality 1977 to Present

Wade Gibson & Sara Kauffman

Over the last three decades, Connecticut has shifted from being one of the most egalitarian states to having one of the biggest income gaps between rich and poor households, as indicated in this report by the Connecticut Association for Human Services and Connecticut Voices for Children.

  • Over this period, Connecticut experienced the greatest increase in income inequality among all states between its high and low-income households.  In 1977-79, the gap between the richest fifth and the middle fifth of families in Connecticut was relatively low, ranking 42nd among all states, but the state ranked 7th highest in inequality by 2005-07.  Similarly, the gap between the richest and poorest fifth of households is now the 3rd worst in the country, up from 46th.
  • The greatest share of income gains have gone to the wealthiest 1 percent, who have vastly outpaced even the very well-off. The share of total state Adjusted Gross Income (AGI) going to the top 1 percent has soared over the last two decades, increasing from 17% to 28%.
  • The 99th percentile of taxpayers in Connecticut earn about $766,000 in state AGI, over $500,000 more than the $225,000 earned by well-off households at the 95th percentile. The income of the near-rich is actually closer to that of the poorest fifth of households, who earn $17,000, than it is to the $766,000 earned by the wealthiest Connecticut residents.
  • Connecticut’s inequality ranks second only to New York’s among U.S. states on the Gini coefficient, one of the most widely used measures of inequality.
Issue Area:
Family Economic Security