Introduction to Income Disparities in Texas
Hardworking Texans are making less money per year than the national median, according to a new WalletHub study. The report, which examined the average annual income of the top five percent, the average income of the bottom 20 percent, and the median income for all residents in all 50 states and the District of Columbia, found that Texas workers are making an adjusted median annual income of $73,718. This is compared to the national median of $81,000 per year.
Texas Ranking and Income Disparities
Although individual Texans are not quite making the national median, the state as a whole ranked 11th for "highest" incomes, moving up one spot from its 2024 ranking. The top five percent of Texans are making more than $504,000 per year, adjusted for cost of living, while the bottom 20 percent of Texas residents are making only an adjusted $17,461 annually. This significant disparity in income highlights the economic challenges faced by many Texans.
Income Disparities in Major Cities
In a major city like Houston, income disparities may appear to be even wider than other Texas cities. Earning a "comfortable" wage in Houston now costs $15,000 more than it did in 2024, and being a middle-class earner means making a minimum of $41,754 a year and as much as $125,274. Despite these challenges, Houston still ranks as one of the wealthiest cities in America, with 18 billionaires and about 82,000 millionaires calling the city home.
National Income Disparities
According to WalletHub analyst Chip Lupo, "The highest-earning 10 percent of individuals in the United States earn over 12 times more than those in the lowest-earning 10 percent, based on the latest Census data." This significant disparity in income is a national issue, with the top 10 states with residents earning the highest income being:
- No. 1 – Virginia
- No. 2 – New Jersey
- No. 3 – New York
- No. 4 – Connecticut
- No. 5 – Washington
- No. 6 – Utah
- No. 7 – Minnesota
- No. 8 – Colorado
- No. 9 – Illinois
- No. 10 – Massachusetts
Conclusion
The WalletHub study highlights the significant income disparities in Texas and across the United States. While Texas ranks 11th for "highest" incomes, the state’s median income is lower than the national median, and the disparity between the top and bottom earners is substantial. Understanding these income disparities is essential to addressing the economic challenges faced by many Americans and promoting greater economic equality. By examining the factors that contribute to these disparities, policymakers and individuals can work towards creating a more equitable economy that benefits all members of society.
