The 2000s have been called a lost decade for the middle class. From stagnant wages and high unemployment to the housing crisis and increased student debt, middle-class families did not see much, if any, financial growth between 2000 and 2010. This lost decade has contributed to the widening income gap in our nation, which is the focus a new study from the Center on Budget and Policy Priorities (CBPP). The CBPP study didn’t just look at income inequality on a national level, it drilled down to the state level for this report.


In creating the report, CBPP staffers examined data from four different time periods: the late 1970s, the late 1990s, the mid-2000s and the late 2000s. Three separate income levels were used in determining the inequality levels:  the top 20 percent, the middle 20 percent and the bottom 20 percent. Realized capital gains and losses were not included, so the actual gaps may be more significant.


When the CBPP looked at the income equality in the late 2000s, it discovered that New Mexico had the greatest gap both in the inequality between the top and the bottom income levels but also between the top and the middle-income levels.  


Greatest income inequality – Top 20 percent and bottom 20 percent

  1. New Mexico
  2. Arizona
  3. California
  4. Georgia
  5. New York

Greatest income inequality – Top 20 percent and middle 20 percent

  1. New Mexico
  2. California
  3. Georgia
  4. Mississippi
  5. Arizona

Although Mississippi is fourth on the list comparing the top incomes with the middle incomes, the state improved from its earlier position. When the CBPP looked at data from the late 1990s to the mid-2000s, Mississippi topped both of those lists.  


Regardless of the improvements Mississippi has made, income inequality continues to be a concerning problem both in that state and across the nation.  


“Inequality has been growing for decades.  Since the 1970s, rich households’ incomes have grown much faster in every state than have the incomes of poor and middle-income households. In contrast, from World War II through the mid 1970s, the gains of economic growth were more evenly shared across the income scale.”  (Source: CBPP)


Learn more about the CBPP’s findings: Pulling Apart: A State-By-State Analysis of Income Trends


Income inequality greatest in New Mexico
A study by the Center on Budget and Policy Priorities examines the widening income gap on a state-by-state level.