A recent study found that Connecticut ranked third nationwide in overall income inequality.
The research done by the Economic Policy Institute, a Washington D.C. based nonprofit, was based on 2015 IRS tax filings and measured each state’s top one percent earners versus the other 99 percent.
The EPI study revealed that Connecticut’s one-percenters bring in 37 times more money than the average of everyone else’s income.
Mark Price partnered with the EPI to produce the report. He’s a labor economist for the Keystone Research Center. Price said that income inequality is being driven nationwide by trends at the top.
“In particular, Fairfield County, which is your most unequal county, is the home to a lot of hedge funds and folks in the financial industry and that — in fact — is one of the key drivers of those very high incomes for those folks at the very top of the distribution,” Price said.
To be in the top one percent nationally in 2015, EPI determined that the income threshold was almost $422,000. But in Connecticut, that number was $700,000.
Price said raising the minimum wage, reducing the cost of attending college, and finding ways to tax one-percenters at a higher rate are potential fixes. But does Governor Dannel Malloy believe imposing more taxes is a viable solution?
“Only if you want to lose the one percent,” Malloy said.
The governor is hopeful that job creation can instead be a pathway toward income equality.
“I think that you have to have a balanced approach and I think the best way to change that inequality is to create attract more good high-paying jobs and to do that across the board throughout the state,” Malloy said.
Malloy pointed to improved high school graduation rates, investments in higher education and an emphasis on training future skilled workers as proof that his administration was focused in that direction.
For researcher Mark Price, it’s uncertain whether Connecticut can overcome its high level of income inequality. While Price believes filings for 2016 and 2017 will show that the other 99 percent are making more money, he expects faster income growth for one-percenters. That’s due in part to the Trump administration’s recent tax cuts.