Maryland's proudest income statistic
Maryland's status as No. 1 in the nation in median household income last year got all the headlines when the Census Bureau disclosed the figures on Monday. But Maryland also ranks highly in equality of income distibution -- despite low-income neighborhoods in Baltimore and scattered rural poverty. That is to say, compared with income in the rest of the United States, Maryland's prosperity is widely shared.
Economists use an indicator called the Gini index to gauge inequality. 0 on the Gini scale is total equality: 20 percent of the population gets 20 percent of the income, 30 percent of the population gets 30 percent of the income, and so forth. 1 is perfect inequality: One guy makes all the income in a given year, and nobody else makes anything. In U.S. states last year, Gini scores ran from 0.410 for Utah -- lower inequality -- to 0.537 in the District of Columbia, which indicates higher inequality. Maryland's score was 0.433, indicating the 13th-lowest inequality in the country.
Maryland was one of only three states among the top-10 income states to have an inequality index this low. So not only is what wealth we have widely shared; compared with income in other states, there's a lot of it. Several states that did well in inequality scores last year also ranked poorly in income. Maine, New Hampshire, Vermont, Wyoming, Idaho, Indiana, Iowa and Montana all had higher equality. But they also had low income.
Note that these are all relative scores. A Gini range of 0.127 -- the spread between Utah's 0.410 and D.C.'s 0.537 -- is not a great degree of variability. To see extreme inequality in action, go to Brazil, where the income Gini index is 0.600. To see extreme equality, go to Japan or Sweden, where the income Gini index is 0.250.
Another way to look at inequality is to examine the income shares held by the top 20 percent and the lowest 20 percent of the distribution. In Maryland, the lowest 20 percent of the earners got 3.9 percent of the income last year. That's not much but it's twice the share in D.C., where the lowest 20 percent got only 1.9 percent of the income. In Japan and Sweden, the lowest 20 percent get 10 percent of the income. In Utah, the lowest 20 percent got 4.5 percent of the income. In dramatically unequal Brazil, the lowest 20 percent get 2.2 percent of the income.
The top 20 percent of Maryland's earners took home 47 percent of the income. In Utah, the most equal state, the top 20 percent got 45 percent of the income. In D.C., the top 20 percent got 56 percent of the income. In Sweden and Japan, the top 20 percent get 35 percent of the income. In Brazil, the top 20 percent take home 64 percent of the income.