Rising income inequality in Texas is out of control

by | Oct 21, 2019 | Economy, Policy

The News

Newly released Census figures show the gap between the rich and poor in Texas continues to grow.

The Lone Star State was one of nine states to see an uptick in income inequality between 2017 and 2018, continuing an almost 40-year trend in the U.S. of wealth being increasingly concentrated among the nation’s richest residents. 

To put those numbers into perspective for Texas, a 2018 study using Census data by the Economic Policy Institute found that Texas’ top 1 percent earn an average salary of $1.3 million, roughly 24 times more than the bottom 99 percent.

“The numbers are clear. Our economy is not working for most families in Texas and across the country,” said Rep. Veronica Escobar (D-El Paso) upon hearing the new numbers. “It’s time for the @SenateGOP to pass the #RaiseTheWage Act and #PaycheckFairness Act to put more money in the pockets of our workers and address the growing income inequality.”

Why it matters

There’s no shortage of research showing a negative relationship between extreme income inequality and worse health, education, and economic opportunity. 

Last month, a Government Accountability Office study once again proved that relationship, showing that poor Americans are twice as likely to die over a 22-year period than wealthy  Americans. 

Other studies have shown countries with higher income inequality suffer from worse rates of obesity, imprisonment, crime, and stress, just to name a few.

Ironically, studies have also shown that income inequality– often seen by Republicans as a necessary sacrifice for economic growth– actually has the opposite effect. The Organization for Economic Co-operation and Development, an intergovernmental think tank supported by 36 countries in North American and Europe, found that for every 1 percent increase in inequality, GDP is lowered by 0.6% to 1.1%. 

Texas is especially sensitive to some of these issues since the state suffers from having almost no social safety net; for the past two decades, the Republican-led Texas government has elected to spend less and less on assistance for its residents. Likewise, Texas is among 26 states that have chosen not to increase the minimum wage above the federal minimum of $7.25 an hour. With roughly 5 million uninsured Texans, the highest uninsured rate in the nation, the health outcome problems that come with income inequality are exacerbated significantly too.

Ultimately, Texas’ worsening income inequality is a direct reflection of how the state’s (and nation’s) Republican leaders have chosen to govern. Whether that’s failing to expand Medicaid, making it harder for residents to access welfare, tax cuts on the wealthy, cracking down on reproductive healthcare, or trying to prohibit an income tax, there’s a countless number of reasons why working-class Texans are feeling the crunch, and those at the top are not. 

Photo: Tamir Kalifa for The Washington Post via Getty Image

fernando@texassignal.com | + posts

Fernando covers Texas politics and government at the Texas Signal. Before joining the Signal, Fernando spent two years at the Houston Chronicle and previously interned at Houston’s NPR station News 88.7. He is a graduate of the University of Houston, Jack J. Valenti School of Communication, and enjoys reading, highlighting things, and arguing on social media. You can follow him on Twitter at @fernramirez93 or email at fernando@texassignal.com

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