Louisiana ranks among the top five states in the nation according to measurements of highest income gaps within state populations, according to data from the 2010 U.S. census.
Louisiana places higher in income distribution inequality than Florida, Texas, Mississippi and Alabama, according to the 2010 data.
The findings show the top five with the greatest income inequality among the 50 states and the District of Columbia are: District of Columbia, No. 1; New York State, No. 2; Connecticut, No. 3; Massachusetts and Louisiana tied at No. 4
Florida, Alabama and Mississippi also rank in the top 10.
Louisiana’s income distribution inequality number is also higher than the overall United States number. Louisiana’s estimate is .475, while the nation’s estimated number is .469.
“In Louisiana our problem is we are a poor state. We need to become a wealthier state,” LSU professor and economist Jim Richardson said.
The income data was released recently as part of the U.S. Census Bureau’s 2010 American Community Survey.
The Census Bureau uses the Gini Index to measure income inequality.
The Gini Index incorporates detailed data into a single statistic which can summarize income distribution.
The higher the number, the greater the level of inequality.
The numerical scale ranges from zero, indicating perfect equality or where everyone receives an equal share; to 1, which is perfect inequality or where all the income goes to one person.
Economist Loren Scott said Louisiana has both wealthy people and a large number of residents with low incomes.
The proportion of Louisiana residents with low incomes is high, thereby creating a situation that affects Louisiana’s income distribution inequality numbers, Scott said.
Louisiana and other states in the Deep South have a heavy population of African Americans, which plays a part in income inequality, Scott said.
“And if you look at the data, they (African Americans) have not ended up as well as other groups when you look at data such as education, income and other economic factors,” Scott said.
Scott said other states near the top of the rankings such as New York and Connecticut have a large number of residents who are wealthy, the opposite of Louisiana’s situation.
Scott said Louisiana’s per capita income jumped somewhat after Hurricane Katrina in 2005 because there were wealthy people who were able to afford to stay in south Louisiana while there was considerable migration of those with lower incomes to Houston, Dallas and San Antonio.
But for the most part, Louisiana historically has measured high in the income gap with a Gini Index score of .478 in 2007, .477 in 2008 and .473 in 2009, according to census data.
The inequality in income distribution is something that is happening not only to Louisiana, but is affecting the entire nation, economist Randy Rice said.
Rice agreed with Scott about the concentration of wealth in some Northeastern states.
“That’s the center of Wall Street,” Rice said.
Rice said Louisiana, on the other hand, has many people who work for minimum wages or have service-industry jobs which pay comparatively low salaries.
States such as Alaska and Utah have the lowest amount of income distribution inequality, according to the census data.
“Those states (Utah and Alaska) are much more homogeneous,” Scott said.