How Income Inequality in Minnesota Compares to Other States

The United States has some of the highest levels of income and wealth inequality in the world. U.S. Federal Reserve data shows that the wealthiest 10% of Americans control $93.8 trillion, more than double the $40.3 trillion in the hands of the remaining 90% of Americans.

The income and wealth divide only appears to be growing wider. A January 2020 report published by the Pew Research Center found that over the last four decades, income growth for the top 5% of families by earnings has far outpaced income growth for families in lower income strata.

Based on the Gini coefficient, a measure of income inequality based on the distribution of income across a population, income inequality varies considerably across the United States. The Gini coefficient is a scale from 0 to 1 — 0 representing perfect equality and 1 representing the highest possible level of inequality. Nationwide, the Gini coefficient stands at 0.481.

The Gini coefficient in Minnesota is 0.443 — lower than the national average and 11th lowest among all 50 states.

Across the state, the average income among the top 20% of households by earnings stands at $233,949. The cohort accounts for 48.2% of all income earned in Minnesota. Meanwhile, the average income among the bottom 20% of households by earnings is just $18,156, accounting for 3.7% of all earnings statewide.

Causes behind rising inequality are complex and varied. A report published by the National Bureau of Economic Research ties the rising disparity to a range of economic factors, including globalization, technological advancement, a stagnant minimum wage, and the decline of labor unions.

All data in this story, including the Gini coefficient, average household income by quintile, and share of aggregate household income by quintile are from the U.S. Census Bureau’s 2019 American Community Survey.