Income inequality is getting more extreme as a new class of the ultra-wealthy emerges, enriched by booming investment in artificial intelligence and in the companies behind it. It’s an extension of a trend that dates to the 1990s and the tech boom sparked by the internet.
By one key measure, at least, Oregon is something of an outlier in this phenomenon. Income distribution is as equitable here as it is in any state west of the Mississippi.
The U.S. Bureau of Economic Analysis uses a metric called the Gini coefficient to quantify income inequality. Named for an Italian statistician, it sounds wonky, but the Gini coefficient is actually pretty straightforward.
It measures income distribution on a scale of 0 to 1. Zero represents a theoretical state in which everyone’s income is exactly the same. A score of 1 would mean all the income goes to a single person.
The U.S. averaged a score of 0.365 in the 1960s, ‘70s and ‘80s, then began a sustained surge over three decades to 0.46 by 2023.
Oregon is much lower, at 0.41.
What does that number mean? It puts Oregon at No. 5 nationally in terms of income equality, tied with Mississippi and New Mexico.
The reasons are uncomplicated. Oregon has fewer wealthy residents than other states do. It has a large middle class, and a smaller number of poor people.
Starting from the top: Just a handful of billionaires call Oregon home. And unlike its neighbors in Washington and California, Oregon doesn’t consistently mint new clusters of multimillionaires because our state has no lucrative startup ecosystem.
Oregon’s relatively high personal income tax may serve to repel the ultra-rich, too.
On the other hand, Oregon does have a thriving middle class. Its median personal income, which once lagged far below the national average, was right in the middle in 2023 at $95,629.
Meanwhile, Oregon is no longer an especially poor state. The nation’s poverty rate has declined significantly since the Great Recession, and that decline was particularly pronounced in Oregon.
All that adds up to a relatively equal income distribution, at least compared to other parts of the U.S.
The states with the most unequal incomes are Wyoming, Connecticut, Texas and California.
Wyoming, a relatively small state far from the nation’s population centers, might seem like an unexpected destination for the wealthiest. But federal data shows Wyoming has the highest concentration of top earners of any state.
It has no income tax and Wyoming cut homeowners’ property taxes by 25% last year for properties worth up to $1 million. The Jackson Hole area is a popular outdoor destination, with high-end skiing and other activities that draw the wealthy.
In addition to Oregon, the states with the most equal distribution of income are West Virginia, Maine, Delaware and Vermont. In these places, however, more equal doesn’t necessarily mean the states’ residents are better off.
All four states, unlike Oregon, have a high concentration of residents at the low end of the income spectrum. All except for Delaware are in the bottom half for median wages.
This is Oregon Insight, The Oregonian’s weekly look at the numbers behind the state’s economy. View past installments here.
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