Hawaii has a reputation as a posh place where movie stars and Internet moguls have their multimillion-dollar hideaways. But according to a new study by the liberal-leaning Economic Policy Institute, the gap between the rich and the poor here is one of the narrowest in the country.
The study, released under the title of ‘The Increasingly Unequal States of America, the study does a state-by-state analysis of the generally increasing gap between the United States’ least prosperous and most prosperous citizens. It noted, for instance, that the largest Not surprisingly, it found that over the last three decades, income for the very wealthy has risen much faster over-all for the very wealthy than for the country as a whole. “Between 1979 and 2007, the top 1 percent took home well over half (53.9 percent) of the total increase in U.S. income. Over this period, the average income of the bottom 99 percent of U.S. taxpayers grew by 18.9 percent. Simultaneously, the average income of the top 1 percent grew over 10 times as much—by 200.5 percent,” it notes.
But the state-by-state breakdown yields some surprises, especially where Hawaii is concerned. Nationwide, for instance, it takes $385,000 in annual earnings to be among the nation’s top one percent in income. But to be a member of the top one percent in Hawaii, you only need to earn $279,000 Only seven other states–mostly in the South– have lower bars for joining the One Percent Club. But the news gets even better when you compare the average annual per capita income with the per capita income of the state’s One Percenters. Expressed as a “ratio of income inequality,” Hawaii’s is the narrowest gap in the country, at 14.6 to one–in other words, a One Percenter here earns about 14.6 times as much as the average guy on the street. That may sound bad, until you compare it to Connecticut, to which many executives and brokers drive home after a long day on Wall Street: the average One Percenter there makes 51 times as much money as the average Joe–the biggest gap in the country. New York is only slightly less unequal, at 48.4.
Of course, it could be that many of Hawaii’s billionaires are “snow birds” with their official residences in states with lower tax rates.
On the downside, the average wage-earner in Hawaii is seeing his or her income growing at a glacial rate. Since 2009, when the economic recovery officially began after the Great Recession, personal income in Hawaii has grown by only 3.5 percent. But that growth has been shared pretty much across the board, though it’s growing slightly faster for the elite: the poorest one percent of Hawaii wage-earners saw their income grow by an average of 3.4 percent, while One Percenters’ income grew by 4.2 percent.
The slow personal income growth of Hawaii’s 99 percent is is still better than that of the nation’s as a whole. Nationwide, the study concluded,”income growth has been lopsided since the recovery began, with the top 1 percent capturing an alarming share of economic growth. Over this period, the average income of the bottom 99 percent in the United States actually fell (by 0.4 percent). In contrast, the average income of the top 1 percent climbed 36.8 percent. In sum, only the top 1 percent gained as the economy recovered.”