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Race and education are what make U.S. income inequality even worse for some

The income gap between the lowest and highest earning Americans increased 27% from 1970 to 2016, says a new Pew Research Center analysis of government data. And that income inequality remains closely tied to education levels, birth origin, and membership in racial or ethnic groups.

The numbers also point to “the historical legacy and current impact of discrimination” as a key driver of income inequality. 

The study, which uses data from U.S. censuses, compares the incomes of households at the high end (the 90th percentile) of income distribution with those at the low end (the 10th percentile) within various groups.

The top line findings:

Income gaps between racial groups have not improved much since 1970. In 2016, high-income blacks earned 68% as much as high-income whites–a ratio that has gone unchanged since 1970. Median income blacks improved a little, earning 65% as much as white counterparts in 2016, up from 59% in 1970. Lower-income blacks narrowed the gap only slightly from 47% in 1970 to 54% in 2016.

Income inequality in the U.S. is now greatest among Asian Americans, nearly doubling from 1970 to 2016. In 2016 (the last year for which data are available) Asians at the 90th percentile had incomes 10.7 times greater than the incomes of Asians at the 10th percentile. The 90/10 ratio among Asians was greater than among blacks (9.8), whites (7.8) and Hispanics (7.8).

“The Asian experience with inequality reflects the fact that the incomes of Asians near the top increased about nine times faster than the incomes of Asians near the bottom from 1970 to 2016, 96% compared with 11%,” writes Rakesh Kochhar, Pew’s associate director of research. “These were the greatest and the smallest increases in incomes at the two rungs of the ladder among the racial and ethnic groups analyzed.”

Hispanics fell further behind in relative income, and the causes are likely immigration patterns and education levels. High-income Hispanics earned 74% as much as high-income whites in 1970; in 2016 they earned only 65% as much. That percentage point dropped at all income distribution levels during the time period. Hispanics immigrants account for as much as half of the growth of the entire ethnic group between 1970 and 2016, Pew says, and the immigrant population “tilts to the lower end of the education and income distributions.” In 2015, only 11% of Hispanic immigrants had a bachelor’s degree, compared with 31% of Americans overall. “The influx of lower-skill, lower-income immigrants likely exerted a drag on the measured growth in income for Hispanics,” the report states.

Read the full report here.

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