California ranks as the fifth worst state in the U.S. for income inequality, according to an analysis of recent Bureau of Labor Statistics data. The disparity between high and low earners in the state is contributing to a housing affordability crisis.
The analysis shows that California workers in the 75th percentile earned a median annual income of $97,900, which is 33% above the U.S. average. In contrast, workers in the 25th percentile earned only $41,600 annually. This results in an income difference of 135% between these two groups, exceeding the national income gap of 114%.
Nationally, Virginia has the most significant income gap, followed by New York, Maryland, and Texas, which are tied for second place. Other states with substantial income gaps include Maryland at 149%, New Jersey at 149%, New York at 140%, and Virginia at 137%.
When examining the average earnings of wealthy residents versus low-earning residents, California's gap is even more pronounced. The average annual earnings for wealthy Californians were $159,000, the second highest in the country and well above the national average of $128,600. However, the average annual earnings for low-earning Californians were $36,000, creating a 343% void between the highest and lowest earners. This specific metric places California fourth in the nation for the widest gap, with Texas (360%), Virginia (355%), and Massachusetts (349%) reporting larger divides.
States with the lowest income disparities include Maine, Vermont, and South Dakota. Maine recorded the smallest gap at 200%, followed by Vermont at 210% and South Dakota at 224%.