Income inequality continues to grow in Oregon

(DECEMBER 1, 2023) "The rich get richer and the poor get poorer." That's a familiar old saying. New tax data, however, seems to suggest it is still true today. Specifically, the data shows that income inequality was still growing in 2021. According to Investopedia, income inequality "refers to how unevenly income is distributed in a population".

A new report from Oregon Center for Public Policy says the income gap in Oregon has reached its highest point. In 2021, the top 1% of earners in the state set a new record for income. The ultra-rich, the top 0.1 percent, consisting of only 1 in every 1,000 Oregonians, have seen their income break records almost every year since 2012. This growing gap between rich people and average people has never been larger.

The report says that this income inequality has serious consequences for the well-being of Oregonians. Studies suggest that it contributes to health issues and premature deaths. Moreover, it hinders social mobility. This makes it harder for individuals born into poverty to improve their circumstances. Income inequality also slows down overall economic growth, innovation, and investment.

In 2021, the average income of the top 0.1% in Oregon reached nearly $8 million. Meanwhile, the typical Oregonian's income has seen minimal growth over more than four decades. The average person earned just under $44,000 in 2021. As a whole, the top 1% made $31.8 billion in 2021, significantly more than the total income of the bottom half of Oregonians, which was around $22.9 billion. 

According to the report, the growing income inequality is not accidental. It is the result of policy choices that favor the wealthy and weaken worker power. To address this issue, policymakers are encouraged to consider actions such as raising taxes on the rich and enhancing protections for workers.