Over a recent 16-year period, a great shift occurred in the incomes of Indianapolis households. The median household wage increased and the balance of high- and low-income households shifted. The number of very-low-income households has dropped and the number of higher-income households has increased. Income distribution in Indianapolis is much more equitable than it used to be.

Source: Workforce & Innovation Technical Solution for the U.S. Census Bureau

We might expect incomes to grow, simply because of inflation and increases in pay rates. It would be possible for the median income to rise without affecting the distribution. But that isn’t what happened in Indianapolis. Instead, the distribution (depicted in the chart at right) changed shape. The blue line shows income distribution in 1990; the red, in 2006. The “low-income” end of the distribution fell and the “affluent” end rose. We now have a smaller share of households in every income bracket below $50,000, and a larger share in every bracket above $50,000.

Instead of a skewed distribution in which the number of households fell rapidly at higher levels of income, we now have a more equitable distribution. In 1990, only about 4 percent of households earned between $75,000 and $100,000, whereas more than four times that number (18.5 percent) earned between $20,000 and $30,000. Today, the number of households earning $75,000 to $100,000 is nearly equal to those making $20,000 to $30,000.

 
 

   
     
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