Income Inequality in Pennsylvania Skyrocketing

Since 1973, the top 1 percent in Pennsylvania have captured 45.7 percent of overall income growth: As of 2015, Pennsylvania is the 14th most unequal in the nation
Date of Press Release: 
July 19, 2018

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HARRISBURG - In The new gilded age: Income inequality in the U.S. by state, metropolitan area, and county, a new paper published by EPI for the Economic Analysis and Research Network (EARN), Estelle Sommeiller, a socio-economist at the Institute for Research in Economic and Social Sciences in France and Mark Price, a labor economist at the Keystone Research Center in Harrisburg, PA detail the incomes of the top 1 percent and the bottom 99 percent by state, metropolitan area, and county.

“Rising inequality affects virtually every part of the country, not just large urban areas or financial centers,” said Sommeiller. “It’s a persistent problem throughout the country—in big cities and small towns, in all 50 states. While the economy continues to recover, federal and state policymakers should make it a top priority to grow the incomes of working people while reigning in corporate profits.”

Sommeiller and Price lay out the average incomes of the top 1 percent, the income required to be in the top 1 percent, and the gap between the top 1 percent and the bottom 99 percent in every county and state as well as in 916 metropolitan areas. The authors found that in 2015, the top 1 percent took home 22.03 percent of all income, while the top 1 percent took home 18 percent of all the income in Pennsylvania.

“These data make clear that Pennsylvania and the rest of the country have entered a new gilded age where the abundant fruits of workers’ labors increasingly fail to show up in their paychecks”, Said Price. “The falling purchasing power of the minimum wage, the decline in union membership and federal and state tax policy designed largely to benefit the top 1 percent are among the most important factors driving the rise of inequality today.”

Key Pennsylvania findings include:

  • The top 1 percent earned 21.7 times more than the bottom 99 percent in Pennsylvania—making Pennsylvania the 14th most unequal in the country.
  • The average annual income of the top 1 percent in Pennsylvania was $1,100,962. To be in the top 1 percent in Pennsylvania, one would have to earn $388,593.
  • From 1945 to 1973 the top 1 percent in Pennsylvania captured just 3.4 percent of overall income growth as incomes grew faster for the bottom 99 percent than for the top 1 percent. Since 1973 the average income of the top 1 percent has grown 9 times faster than the average income of the bottom 99 percent leaving the top 1 percent to capture 45.7 percent of all income growth.

Key findings for Pennsylvania counties include:

  • The most unequal county in Pennsylvania was Montgomery; there the top 1 percent in 2015 earned on average 31.2 times the average income of the bottom 99 percent of families. The next 9 most unequal counties were Cumberland (26.7), Delaware (25.3), Allegheny (24.5), Chester (23.9), Philadelphia (20.5), Washington (19.9), Bucks (19.6), Potter (19.2), and Blair (19.2).
  • The county with smallest gap between the average income of the top 1 percent and the bottom 99 percent was Perry where the top 1 percent earned 8.2 times the average income of the bottom 99 percent of families. The next nine smallest gaps were in Fulton (8.5), Cameron (8.9), Clinton (9.8), Forest (9.9), Armstrong (10.2), Mifflin (10.2), Beaver (10.3), Juniata (10.4), Franklin (10.4), and Huntingdon (10.7).
  • The highest threshold for entering the top 1% was in Montgomery County where a family would need to earn $879,563 to be in the top 1 percent. The next 9 highest thresholds were in Chester ($868,782), Bucks ($661,051), Delaware ($643,467), Cumberland ($497,931), Allegheny ($483,955), Washington ($464,911), Butler ($442,932), Montour ($438,073), Lehigh ($403,626).
  • The lowest threshold for entering the top 1% was in Mifflin where an income of $186,607 would put a family in the top 1 percent. The next 9 lowest thresholds were in Cameron ($186,614), Fulton ($187,388), Northumberland ($190,455), Forest ($196,182), Huntingdon ($197,518), Venango ($198,739), Armstrong ($199,737), Juniata ($200,918), and Clinton ($206,993).
  • In 2015, the top 1 percent took home 24.0 percent of all income in Montgomery county. The next 9 highest top 1 percent shares of all income were Cumberland (21.3 percent), Delaware (20.4 percent), Allegheny (19.8 percent), Chester (19.4 percent), Philadelphia (17.2 percent), Washington (16.7 percent), Bucks (16.5 percent), Potter (16.3 percent) and Blair (16.2 percent).
  • The top 1% share of all county income was the lowest in Perry county at 7.7 percent followed by Fulton (7.9 percent), Cameron (8.3 percent), Clinton (9.0 percent), Forest (9.1 percent), Armstrong (9.3 percent), Mifflin (9.4 percent), Beaver (9.4 percent), Juniata (9.5 percent) and Franklin (9.5 percent).

 

The Keystone Research Center is a nonprofit, nonpartisan research organization that promotes a more prosperous and equitable Pennsylvania economy.