Friday, October 24th, 2014
Mostly True
Earle
"Inequality in Texas is steadily getting worse, with very few rich people, a great many poor people, and fewer and fewer in the middle."

Ronnie Earle on Monday, January 18th, 2010 in a speech

Ronnie Earle says income gap steadily widening in Texas, shrinking the middle class

Ronnie Earle, the former Travis County district attorney seeking the Democratic nod for lieutenant governor, says powerful interests hold more sway at the Capitol than regular folks.

According to The Austin Chronicle, he went farther afield before the NXNW Austin Democrats Jan. 18, saying: “Inequality in Texas is steadily getting worse, with very few rich people, a great many poor people, and fewer and fewer in the middle.”

We wondered if the former prosecutor had stated his case on inequality correctly.

Earle shared with us outside research suggesting growing gaps in household income nationally as well as in Texas, beginning in the late 1990's.

For instance, research by the left-leaning Center on Budget and Policy Priorities and the Economic Policy Institute found that the incomes of the poorest fifth of Texas families and the middle fifth of families didn’t change significantly between the late ‘90s and about 2005. Meantime, the average income of the richest fifth of Texas families increased by $10,505, or 9 percent, to $126,658.

What about more recently? Karl Eschbach, the Texas state demographer, shared estimates by the U.S. Census Bureau that showed the distribution of Texas families across the income scale barely changed from 2000 through 2008, though inequality increased slightly.

As of 2008, the state’s wealthiest 20 percent of households accounted for nearly 51 percent of income. That is, about half the money taken home that year went to the richest Texans.

The next-wealthiest 40 percent of households garnered 37 percent of income. The remaining 40 percent of households -- the bottom earners in Texas -- got less than 12 percent of total household income.

We also reviewed an indicator that's a widely accepted measure of income inequality.

Scientists use the GINI coefficient to gauge inequality in income across societies. A society that scores 0.0 on the scale has perfect equality, meaning everyone has the same income. The higher the number over zero, the more the inequality. A score of 1.0 indicates total inequality where one person or household corners all the income.

According to Eschbach’s analysis, the GINI coefficient for Texas was .466 in 2008, up slightly from .46 in 2000.

Separately, the Census Bureau estimated a Texas GINI index of .474 for 2008—placing Texas fifth in income inequality among the states, trailing only Louisiana, Mississippi, Connecticut and New York, which topped the dubious category with a GINI index of .503.

James K. Galbraith, a professor at the Lyndon B. Johnson School of Public Affairs, pointed us to research he’s overseen suggesting that income inequality in Texas widened over the past few decades. Texas had a GINI index of .37 in 1970. The index reached .39 in 1980, .42 in 1990 and .47 in 2000 before dropping to .46 in 2004.

With help from a Census Bureau statistician, we tried to assess whether the state's middle class has shrunk.

Kirby Posey, a bureau survey statistician, told us that if the middle class is shrinking in Texas, it's happening slowly.

As of 1990, the middle class accounted for 47 percent of all the state's household income. The share of income attributed to the middle class was 46.6 percent in 2000 and 45.8 percent in 2008, according to the bureau.

By and large, Earle correctly noted that Texas is home to lots of poor people and a clutch of the very wealthy.

Earle passed along a September press release from the Center for Public Policy Priorities, which advocates for programs serving low-income Texans, stating that the ranks of Texans living in poverty has likely swelled given the national recession.

Even if so, that doesn't necessarily mean that fewer people are in the state's middle class. Eschbach, the state demographer, suggested that because there has been little change in income inequality across Texas over the past decade, more research would be needed before concluding the state's middle class has dwindled.

Ultimately, neither Galbraith or Eschbach quibbled with the gist of Earle’s claim.

We rate his statement Mostly True.