Study: Texas Wealth-and-Income Gap Continues to Grow

By Peter Malof

AUSTIN, Texas – A new study based on census figures shows the gap between the rich and poor continues to grow quickly. The most recent figures say Texas has the seventh-highest inequality of any state. Analysts say it’s becoming a serious issue for the economy as a whole. 

According to Elizabeth McNichol, a senior fellow with the state fiscal project of the Center on Budget and Policy Priorities in Washington, D.C., the gap has grown nationally for three decades, but has become worse in the last 10 years.

“When the economy has grown, the lion’s share of that has gone to households at the top. What we’ve seen in the last decade is that the incomes of the households at the bottom are actually declining.”

Economists stress that rising inequality is not inevitable, noting that the gap between rich and poor actually fell between World War II and 1970. It also fell for a brief period during the economic growth of the late 1990s, they add, partly due to Clinton-era tax policies and a rise in the minimum wage.

McNichol calls inequality bad because it makes the economy less flexible. People who work hard and play by the rules should be rewarded, she says.

“There’s a question of fairness. Economic growth comes from the contributions of people in all walks of life. When your place on the income scale determines whether you get rewards for that work, then that’s a problem.”

Education, job training and tax policies at the state level can make a big difference, she adds. 

“Assistance in child care, job training, transportation and health insurance can help families get jobs and move up the income scale.”

Texas also ranks seventh among the states for income inequality between high- and middle-income
households.

The full report is available from the Center on Budget and Policy Priorities.