Inequality in incomes rises to record during Biden’s first year

NEW YORK: A key measure of US income inequality sets a new record in the first year of President Joe Biden’s term of office, says a report.

The so-called Gini Index rose by 1.2% last year to 0.494, according to data from the US Census Bureau. The index measures how income is distributed, with a value of 0 representing perfect equality, while 1 indicates absolute inequality.

The same report showed the US poverty rate climbed for a second straight year in 2021 and household income slipped slightly.

Last year, 37.9 million people were in poverty, about 3.9 million more than in 2019. Almost 20% of households earned at least US$150,000 (RM678,900) last year, according to the report.

Broken down by race, 22.5% of non-hispanic white households earned US$150,000

(RM678,900) or more, compared with 10.3% of black households.

One in eight Hispanic households of any race earned at least US$150,000 (RM678,900)

and one-third of non-hispanic Asian households earned at least US$150,000 (RM678,900) in 2021.

Last year, the share of income flowing to the bottom four quintiles, or the lower 80% of households, shrank, while more income reached those among the top 20%.

In particular, 23.5% of total income went to the top 5% compared with 23% in 2020.

Seen differently, a household in the top 10% makes about 11 times more than a household in the bottom 10%.

There was a clear divergence between the wealthy and the poor. Median incomes at the 90th percentile rose to US$211,956 (RM959,313) in 2021, while incomes for those among the bottom 10th fell to US$15,660 (RM70,877). When measured using post-tax income data, inequality was 12.9% lower compared with pretax income. —