Income inequality – the gap in incomes between the rich and poor – has increased steadilyin the United States since the 1970s. By one measure, the gap between Americans at the top and the bottom of the income ladder increased 27% from 1970 to 2016. However, the rise in inequality within America’s racial and ethnic communities varies strikingly from one group to another, according to a new Pew Research Center analysis of government data.
In this analysis, which draws on data from the American Community Survey and U.S. decennial censuses, income inequality is measured using the 90/10 ratio – the income of those at the high end (90th percentile) of the income distribution relative to the income of those at the low end (10th percentile). “Income” refers to the resources available to a person based on the income of their household, whether the person had personal earnings or not. Thus, people’s incomes are represented by their household’s income adjusted for household size. (See the report methodology for details.)
The top-to-bottom income ratio among Asians increased 77% from 1970 to 2016, a far greater increase than among whites (24%), Hispanics (15%) or blacks (7%). As a result, Asians displaced blacks as the most economically divided racial or ethnic group in the U.S. In 1970, income inequality among Asians was roughly on par with whites and Hispanics and significantly less pronounced than it was among blacks. The Asian experience with inequality reflects the fact that the incomes of Asians near the top increased about nine times faster than the incomes of Asians near the bottom from 1970 to 2016, 96% compared with 11%. These were the greatest and the smallest increases in incomes at the two rungs of the ladder among the racial and ethnic groups analyzed.