Arizona
Inequality
Inequality refers to the differences in income and wealth between all groups in society—between rich and poor. High levels of inequality can signal real differences in social and economic opportunity and lead to perceived unfairness, distrust of government and other key institutions, and political unrest.
The importance of inequality relative to average economic well-being is sometimes debated. Some argue that a degree of inequality is a natural outgrowth of differences in individual abilities, motivations, and decisions. Others argue that inequality of outcome is less important than inequality of opportunity— specifically, the opportunity to get out of difficult economic circumstances, or economic mobility. Still, inequality is a concern across the political spectrum.
Summary of Results.
In the United States, income inequality has been rising while the poverty rate has been declining. The result is that fewer people have incomes so low that they cannot provide for their basic needs. But the increase in income among the rich has been larger, which explains rising income inequality. Arizona’s progress in this area has been mixed.
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Income InequalitySpecific Measure
Income Gini coefficient (pre-government taxes and transfer programs). This is an index that ranges from zero to 100 where higher numbers indicate more inequality
(Source: Census Bureau).State RankState vs. US trend22Why did we include this measure?
The Gini coefficient is a common measure of inequality and describes the extent to which a measure like income is concentrated within certain groups. When the income Gini coefficient is zero, it means everyone has exactly the same income. When it is 100, it means that a single person has all the income. (Of course, these extremes almost never occur in practice, but the extremes are useful for understanding the scale.) The specific income Gini coefficient we use captures all sources of income, including wage earnings as well as pensions, government taxes and transfers. We also prefer this measure because it reflects the income of all households, rather than comparing only the rich versus the poor (i.e., those at the ends of the income distribution).
Arizona State Trend Stable
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PovertySpecific Measure
The Supplemental Poverty Measure (SPM), which measures income net of government taxes and transfer programs (see examples below)
(Source: Census Bureau).State RankState vs. US trend39Why did we include this measure?
There is general agreement that people should be able to provide the most basic material needs for themselves and their families. Poverty measures capture this by identifying households where these needs are not being met.
An advantage of the Supplemental Poverty Measure we use is that it accounts for a wide variety of factors affecting the economic resources people have available. First, it counts more than just wage income and includes cash benefits and some in-kind government supports that are intended to prevent poverty. Income from Social Security, Supplemental Nutrition (SNAP), Earned Income Tax Credit (EITC), Child Tax Credit, and housing subsidies are all included, for example. Second, this supplemental poverty measure subtracts necessary expenses, such as taxes and out-of-pocket health expenses, from that income when deciding whether someone is living in poverty. (Medicare and Medicaid benefits are not directly counted as income, but these programs affect out-of-pocket health expenses, which are accounted for as necessary expenses.)
Arizona State Trend Mixed
- Mixed: the trends go in strongly opposite directions during different periods.
- Unclear: too few years of data to establish a trend.
Measures in green indicate an improving state trend or that this state ranks in the top third of states in the country.
Measures in red indicate a declining state trend or that this state ranks in the bottom third of states in the country.
Measures in yellow indicate stable trends or that this state ranks in the middle third of states in the country.