According to a recent study by 24/7 Wall Street, the middle class is dying quicker in Rhode Island than anywhere else in the country.
They found that despite the country’s unemployment rate falling below 5% in January for the first time since 2008, and the Federal Reserve’s decision to raise interest rates for the first time since 2006, concerns about wage growth — particularly among middle earners — remain. Since 2010, as the country began to recover from the Great Recession, income of the top 20% of households grew 3.7% from 2010 through 2014. During that time, incomes of the middle 20% of households declined 0.7%.
Based on income earned before taxes by the third quintile — the middle 20% of earners in each state — middle class incomes in Rhode Island declined the most in the country. Incomes among middle class Rhode Island households fell by 3.1% from 2010 to 2014, while income among the state’s fifth quintile, the top 20% of state households, grew by 4.5%.
1. Rhode Island
> Middle income growth 2010-2014: -3.1%
> Fifth quintile income growth 2010-2014: 4.5% (18th highest)
> Fifth quintile share of income: 51.2% (10th highest)
> Middle class household income: $55,414 (19th highest)
Middle class households in Rhode Island are among the worst off compared to the highest earning households in the state. From 2010 through 2014, middle class household incomes shrank 3.1% to $55,414 a year. Over the same period, incomes of the top 20% of households grew by 4.5%, one of the largest income growth disparities between those cohorts in the country. Consequently, the state’s Gini coefficient increased nearly four times as fast as the nation’s comparable figure from 2012 through 2014. Additionally, the state’s labor market is far from healthy. Nearly 8% of the state’s workforce is unemployed, the third highest unemployment rate in the country. And while the state’s unemployment rate has fallen 3.5 percentage points since its peak in 2010, the decline is due largely to a 2.4% contraction in the state’s labor force.
