Bay Area has widest income gap in state
Report finds top 90th percentile earns $384K versus $32K for bottom 10th
It’s official: The gap between the Bay Area’s haves and the havenots is wider than anywhere else in the state.
Top income earners in the Bay Area make 12.2 times as much as those at the bottom of the economic ladder, according to new research from the Public Policy Institute of California, which analyzed 2018 U.S. Census Bureau data, the most recent available.
The analysis found that Bay Area residents in the 90th percentile of incomes earned $384,000 a year, compared with just $32,000 for those in the bottom 10th percentile.
After the Bay Area, the income gap was widest in the Sacramento region, PPIC found, with the 90th percentile there earning $232,000 and the 10th percentile earning just $19,000. It was narrowest in the Inland Empire region, which includes Imperial, Riverside and San Bernardino counties. There, the 90th percentile makes $190,000 and the 10th percentile earns $20,000.
The divisions have made California one of the most economically unequal states in the country. Just four other states — Missouri, New Mexico, New York
and Louisiana — and the District of Columbia have higher levels of income inequality, according to PPIC.
“Unfortunately, I was looking for more of a story of improvement than we see in this data,” said Sarah E. Bohn, vice president of research at PPIC.
Despite California’s strong economy, low- and middle-income earners have seen fewer gains than those in the top bracket in recent decades. Incomes for families in the 90th percentile have increased 60% since 1980, PPIC found, while incomes for the 10th percentile increased by just 20% during the same time.
“It’s clear that low-income families don’t seem to be able to make as much economic progress as we would like,” Bohn said.
A September analysis of census data from the California Budget and Policy Center found a similar gulf between the state’s rich and its poor, but worsening economic outcomes for those at the bottom. From 2006 to 2018, that report found, income for the top 5% of households grew by 18.6%. For households in the bottom 20%, it fell 20%.
PPIC’s analysis did not include figures from individual counties, but 2018 census data shows the widest income disparities in the Bay Area in San Francisco County, where the top 5% of households make an average of $808,105 annually, compared with $16,184 for the lowest 20%.
San Mateo County had the second-highest income gap in the region, with the richest earning $810,917 per year while the bottom fifth made $25,039.
“Economists think there are incentives to move up the economic ladder, but when the disparities are so large, does that incentive fade away because it’s not possible to make that leap, to invest in the things that move you up?” said Bohn. “That’s the bigger concern that I have.”