High levels of unemployment, stagnant wages and the growth of low-pay service jobs are among the factors that rank New Mexico high on the list of states with the biggest income gaps, according to the latest economic survey released today by the Legislative Council Service and the Legislative Finance Committee.
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The report, which pulls data from studies by the Congressional Budget Office, the Center on Budget and Policy Priorities and the Economic Policy Institute, ranks New Mexico eighth in states with the highest levels of income inequality. According to data cited in the report, the state's top fifth of earners average a $118,608 salary while the bottom fifth bring in less than $15,000.
Top earners tend to live in counties close to large federal research labs. Los Alamos county, for instance, is home to the highest wages in the state, averaging just shy of $74,000 a year.
The report also cites a 2011 CBO study that found income inequality rising across the country during the last three decades. During that time period, the top 1 percent of households saw their incomes increase by 9 percent from 1979 to 2007. At the same time, average incomes for the bottom 20 percent of the nation's earners dropped 2 percentage points.
LCS economist Tom Pollard tells SFR that the income gap in New Mexico, which in 1979 was among the widest in the nation, stayed stagnant during the past three decades. In other words, the rest of the country stooped down to New Mexico's levels.
"Many other states got worse in terms of income inequality and deteriorated to the level of where New Mexico was at the beginning of the period," Pollard says.
