Much has been made nationally in recent years over growing inequality. In a new report co-released with the Connecticut Association for Human Services (CAHS), CT Voices Senior Policy Fellow Wade Gibson set out to trace the breadth and depth of inequality in our state. The report highlights several important trends that have developed since the late 1970s and illustrates a dramatic widening of gaps between the state’s extremely well-off – the top 1 percent of taxpayers – and the remainder of the population.
A state whose middle and working classes once stood closer to prosperity than almost anywhere in America has become one of its most unequal places. In 1977-79, the gap between the richest fifth and the middle fifth of families in Connecticut was relatively low, ranking 42nd among all states, but the state ranked 7th highest in inequality by 2005-07. The rich and middle were closer together in 43 other states. Similarly, the gap between the richest and poorest fifth of households is now the 3rd worst in the country, up from 46th. Over the last three decades, Connecticut experienced the greatest increase in income inequality among all states between its high and low-income households. Connecticut has moved quickly from relatively egalitarian to remarkably unequal.
This broad, deep, and growing inequality in our state has serious implications that cut across a variety of issue areas. Such deep inequality can jeopardize health outcomes for children and families, can trap impoverished communities in cycles of crime and poverty, and can exert downward pressure on economic growth across the state and across the region. Simply put, we should all care about these disturbing trends – from the 1 percent on down. The report mentions several policy actions which may help to stem or reverse this trend. Specifically, these actions include:
- Raising and indexing the minimum wage.
- Shoring up the unemployment insurance system.
- Making the state and local tax code fairer.
- Strengthen programs that preserve and expand opportunity. Especially in tough times like these, Connecticut should strengthen, rather than weaken, vital programs such as Medicaid and the earned income tax credit that protect our most vulnerable residents and help them climb the opportunity ladder. Connecticut should also expand programs that make higher education more affordable and prepare students to succeed in college—increasingly, a college degree is essential to reaching the middle class.
Learn more in our report.