Income Inequality in Los Angeles County, California, and the United States

About the chart
Income inequality between the rich and the poor is increasing throughout the United States but is higher in California and even higher in Los Angeles County.  The growing Gini ratios between 2012 to 2016 indicates increased uneven income distribution.

The Public Policy Institute of California studied the effects of the Great Recession on income distribution.  The independent, non-partisan, non-profit research institution concluded that the Great Recession has widened the income gap between lower- and upper-income families as well as further reduced the percentage of middle-income families in all of the United States; however, California and particularly its large metropolitan areas felt the hardest hit (December 2011).  The greater increase of Gini ratios in California and Los Angeles County in comparison to the smaller increase in the United States reflects this conclusion.

What is the Gini index?
The Gini index (also known as the Gini ratio and coefficient) is a summary of income inequality income (U.S. Census Bureau, January 2016).  The Gini index is a number from 0 to 1 that represents the income inequality level in a region.  A Gini index of 0 expresses perfect equality where everyone receives an equal share.  A Gini index of 1 expresses perfect inequality where only one person receives all the income and the rest receives none.

Why do we care?
Gini index is negatively correlated with improved social indicators, economic growth, and political bipartisanship.  Social indicators refer to measures that describe human well-being, covering a full range of issues, including educational attainment, unemployment, crimes, teenage pregnancy, and life expectancy.  Therefore, low Gini index benefits our society, economy, and democracy. For more details on how inequality affects our society, economy, and democracy, please read the OECD’s report titled “In It Together: Why Less Inequality Benefits All” (May 2015).

Propel L.A. empowers organizations and volunteers to fulfill the equity-centered goals and strategies of the 2016-2020 Countywide Strategic Plan.