Sacramento’s wealthiest residents saw their incomes grow much faster last year than incomes for everyone else, sharply increasing income inequality across the region, new census figures show.
Household income across all groups – from the poor to the wealthy – grew from 2015 to 2016, the second year in a row the region saw broad income gains. The poorest 20 percent of local households saw average incomes rise to $14,000 in 2016, up about $700 from the prior year, after adjusting for inflation.
But it was the wealthy that benefited the most. The richest 5 percent of households in the Sacramento region saw their average incomes rise to $390,000 in 2016, up more than $50,000 from the previous year, after adjusting for inflation.
Sacramento’s wealthiest residents often draw their income from investments. For those invested in the stock market, it was a banner year, with the Dow Jones Index rising about 13 percent. For those invested in real estate, the gains were almost as strong. Median home prices in the Sacramento region rose by 9 percent. Median rents also rose quickly, benefiting landlords.
Since the 2007 recession, the region’s poorest residents have seen their incomes drop substantially, after adjusting for inflation. Its richest residents have made significant gains.
The wealthiest 5 percent of Sacramento households controlled 22 percent of the region’s income last year, the largest proportion in at least a decade. The wealthiest 20 percent of households controlled 50 percent of its income last year.