Recent data reveals that the median household income in the United States is estimated to be between $75,000 and $80,000. However, these numbers do not capture the extent of the gap between the highest and lowest earners, a measure that sheds light on the varying financial situations within a community. Nationally, the top 20% of earners make at least $4.61 for every $1 earned by the bottom 20% of earners, with some areas showing a disparity exceeding $7.
To pinpoint where this income gap is widening and at its peak, SmartAsset assessed 96 major U.S. cities based on the percentage increase in income inequality between the top and bottom earners over a one-year period.
Key Discoveries:
– Madison, WI experienced the most significant rise in income inequality, with a 4.56% increase in the income gap between the highest and lowest earners in one year. In 2024, the top earners made $4.30 for every dollar earned by the lowest earners, up from $4.24 in 2023.
– New Orleans, LA topped the list for income inequality, with the highest-earning households making nearly 8 times the lowest-earning households, maintaining a $7.91 ratio year over year.
– Boise, ID had the lowest income inequality, with the highest earners making $3.90 for every dollar earned by the lowest quintile of earners, showing a slight decrease in disparity year over year.
– Richmond, VA saw a significant 11.2% decrease in income inequality, leading the pack in reducing the gap between the top and bottom earners.
Top 5 Cities Where Income Inequality Increased Most Over One Year:
1. Madison, WI: 4.56% increase, $4.30 ratio in 2024
2. Chesapeake, VA: 4.41% increase, $3.95 ratio in 2024
3. Oakland, CA: 3.24% increase, $5.41 ratio in 2024
4. Fremont, CA: 3.24% increase, $5.41 ratio in 2024
5. Austin, TX: 3.03% increase, [missing data]
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In 2024, the bottom 20% had an income of $4.48, while the top 20% had a ratio of earnings threshold of $4.35 compared to the bottom 20% in 2023. The median household income for 2024 was $68,630, slightly up from $68,150 in 2023 in Omaha, NE, showing a 2.85% increase in the spread of income. In Denver, CO, the ratio of earnings threshold for the top 20% versus the bottom 20% was $4.51 in 2024, up from $4.38 in 2023. The median household income in Denver also increased to $87,619 in 2024 from $81,262 in 2023, with a 2.35% change in the spread of income. Baltimore, MD, saw a ratio of $4.40 for the top 20% versus the bottom 20% in 2024, compared to $4.30 in 2023. The median household income rose to $86,198 in 2024 from $80,159 in 2023, reflecting a 2.18% change in the spread of income. Bakersfield, CA, had a ratio of $4.96 for the top 20% versus the bottom 20% in 2024, up from $4.85 in 2023. The median household income increased to $65,981 in 2024 from $57,926 in 2023, showing a 2.13% change in the spread of income. Aurora, CO, experienced a ratio of $4.05 for the top 20% versus the bottom 20% in 2024, compared to $3.97 in 2023. The median household income also grew to $93,525 in 2024 from $84,308 in 2023, with a 1.98% change in the spread of income.
The top 10 cities with the highest income inequality included New Orleans, LA, where the ratio of earnings threshold for the top 20% versus the bottom 20% was $7.91 in 2024, slightly up from $7.87 in 2023, with a 0.45% change in the spread of income. The median household income for New Orleans increased to $51,913 in 2024 from $46,188 in 2023. In Boston, MA, the ratio was $7.70 for the top 20% versus the bottom 20% in 2024, down from $7.81 in 2023, with a -1.31% change in the spread of income. The median household income in Boston rose to $84,548 in 2024 from $77,163 in 2023
In 2024, the ratio of earnings threshold for the top 20% versus the bottom 20% was $5.56, while in 2023 it stood at $5.51, reflecting a 0.91% increase in the spread of income. The median household income for 2024 was $55,928, compared to $52,644 in 2023.
For Chicago, IL, the ratio of earnings threshold for the top 20% versus the bottom 20% was $5.50 in 2024, slightly up from $5.47 in 2023, resulting in a 0.39% change in the income spread. The median household income in Chicago for 2024 was $76,614, higher than the $72,063 reported in 2023.
In Memphis, TN, there was a decrease in the ratio of earnings threshold for the top 20% versus the bottom 20%, dropping from $5.57 in 2023 to $5.47 in 2024, showcasing a -1.74% change in income inequality. The median household income for Memphis in 2024 was $61,452, compared to $54,931 in 2023.
The data for this study is based on the ratio of household income at the 80th percentile to that of the 20th percentile, sourced from the County Health Rankings & Roadmaps for 2024 at the county level. Information for 96 of the largest cities was obtained from U.S. Census Bureau population estimates for 2023.
For further inquiries regarding this study, please reach out to us at press@smartasset.com. Photo credit: iStock.com/halbergman. This article was originally published on SmartReads by SmartAsset, discussing the trend of increasing income inequality in various cities in 2025.
