A new report by the Utah Foundation indicates that also appears to be the case in the Beehive State. Yet the study, which examined economic mobility among the state’s residents, also noted there is a lot more upward movement among different income groups than most would suspect.
“A lot of income studies have looked at the growing income gap between the rich and the poor,” said Laura Summers, a research analyst at the Utah Foundation. “The problem with many of those studies is that researchers were looking at just a snapshot of the data. They didn’t look at what happens to individuals over time.”
And from that perspective, the picture appears much different. By one measure, roughly 77 percent of Utah taxpayers who were in the lowest income bracket in 1994 had moved up one or more notches by 2007, Summers noted in her report titled “Moving Up the Economic Ladder: An Analysis of Economic Mobility in Utah.”
Looked at another way, though, the Utah Foundation found that one-third of the state’s taxpayers were upwardly mobile while most of the rest were “riding the tide.” That means they had higher incomes but not enough to move them into the next higher bracket.
“Compared with other states, the amount of income inequality that exists in Utah seems to be fairly low,” Summers said. “And while the distribution of income among individuals may be unequal in any given year, that doesn’t mean that it will be unequal over their lifetimes.” The Salt Lake Tribune
Note: Gini coefficients which provide one measurement on income inequality are easily available from American Community Survey Data (the Census Bureau's survey that provides demographic information for the U.S. and local areas). Gini coefficients range between "0" (everyone has the exact same income) and "1" (one person has all the income).
For example, Gini coefficients from the Amercian Community Survey (2006-2008 averages) show the U.S. with a coefficient of 0.467, Utah with a coefficient of 0.409, and Washington County with a coefficient of 0.383. In other words, of these three areas, Washington County has the most equal income distribution and the U.S. the least.
You can access this information (and so much more data) from the American Factfinder: http://factfinder.census.gov
Also, keep in mind that in the natural course of life one would expect people to move in and out of various income groups. When you are a teenager you are likely in the lowest income group. Your earnings/income increases over time and you move up the ranks. Income typically peaks when you are in your 50s. Then, after retirement, you likely drop down a notch or two. So, the age distribution of the population will affect how income is distributed. The fact that many baby boomers (born between 1946 and 1964) may be at the height of their earnings probably affects the current income distribution.
