U.S. income inequality rising most among Asians

It’s no secret that income inequality has been on the rise in the U.S. for decades. Since the 1970s, the middle class has been losing ground while the wealthier become better off. But while some groups have suffered more from the rising gap in income, the biggest rise in income inequality is among Asian-Americans—displacing African-Americans as the most economically divided racial or ethnic group in the U.S.

In fact, says a study from the Pew Research Center, Asians have experienced the greatest growth in the income gap between 1970 to 2016. During that period, “the gap in the standard of living between Asians near the top and the bottom of the income ladder nearly doubled, and the distribution of income among Asians transformed from being one of the most equal to being the most unequal among America’s major racial and ethnic groups.”

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Asian-Americans overall have the highest-earning racial and ethnic group in the U.S., but that’s not to say that all Asians are at that level of income. And during that period, lower-income Asians gained far less in income compared with their counterparts in other groups.

According to the study, overall, the income gap between those with the most and the least income during the period increased 27 percent, with those near the top bringing in 8.7 times as much income as those near the bottom. In 2016, that amounted to $109,578, compared with $12,523. In 1970, Americans in the top range had 6.9 percent as much income as those near the bottom—$63,512 compared with $9,212.

But when it comes to racial and ethnic groups, Asians in the top income range had 10.7 times the income of Asians in the bottom range. Among African-Americans, those at the top had 9.8 times more than those at the bottom; among whites and also among Hispanics, those at the top made 7.8 times more than those at the bottom.

An increase in income inequality matters, the report says, “because of the potential for social and economic consequences.” Not only do people at the low end of the range have less economic opportunity and mobility, they have less political influence and could also be subject to “greater geographic segregation by income.” People with less money save less for retirement, and those at the low end of the pay spectrum are also less likely even to have access to a retirement plan in which to save—which means they will be suffering from their low economic status probably throughout retirement.

Add to that the effect on the overall economy because of lower consumption, excessive borrowing and less investment in education, and it becomes obvious that income inequality takes a toll on a wide range of activities throughout the population.