Rising income inequality has spread to Nebraska, a trend revealed by U.S. Census data released Tuesday.
Nebraska's median household income — median means midpoint or balancing point, so it’s the income level with as many households above as there are below — fell 5 percent over about a decade after adjusting for inflation.
And the state's two most populous counties lost more ground than all but a handful of others.
The biggest gainers in the state: sparsely populated western counties.
Median household income was among a host of measures released in the American Community Survey.
David Drozd, research coordinator at the Center for Public Affairs Research, University of Nebraska at Omaha, compared the latest results — taken from four years of recent surveys to create a statistically meaningful result — with findings from the 2000 census. The period includes the four-year span with the worst recession in 70 years.
Drozd warns that the data still has relatively high sampling error, especially for places with small populations.
But the findings for median household income, after adjusting for inflation, show a significant shift of the balance point toward the poor end of the scale.
Lancaster County's inflation-adjusted median household income was $51,810 from the 2008-2012 survey, down 10.2 percent from a decade earlier. Douglas County's was $53,295, down 10.5 percent.
Only eight of Nebraska's 93 counties showed greater shifts toward the red, and those are small counties with a higher probability of sampling error. The median in Sarpy County, Nebraska's fastest growing county, lost 6.6 percent over the decade.
Much of the shift appears to result from changes at the poor end of the scale.
Drozd said the data shows little change in the proportion of high-income families over the years in Lancaster and Douglas counties — 4.3 percent in Douglas and 3.1 percent in Lancaster — but about a 7 percentage-point increase in low-income families in both counties, to 33.3 percent of Douglas County households and 34.1 percent in Lancaster.
"Possible explanations include more immigrant households, an increasing proportion of one-person households, which would tend to have less income than households with more people, a larger pool of people in their college/early working years as the baby boom echo hits those ages and higher college enrollment rates leading to more of all of what I just mentioned for college-influenced areas like Lincoln and Omaha," Drozd said in an email. "Thus, there is rising income inequality among households in these areas. So what lost out — the so-called middle class, if you consider an income between $35,000 and $200,000 today middle class.
"What is interesting/noteworthy is just how far Lancaster and Douglas fell," Drozd said.
The best gain by a Southeast Nebraska county was Pawnee, 16th among the counties, up 9.2 percent to $43,634.
The majority of households in half of Nebraska’s counties gained in real income while the other half have lost purchasing power since 2000, Drozd said.
In general, agriculturally-based Nebraska counties improved, he said, largely because of relatively low agricultural prices in 2000.
But the results for Omaha and Lincoln are discouraging and reflect the same characteristic in the U.S. economy, said Eric Thompson, director of the Bureau of Business Research at the University of Nebraska-Lincoln.
The declining median household incomes reflect the longer-term trend of a hollowing-out of the middle of the income distribution in the United States, and the weakness of the U.S. economy since 2000, a period which had two recessions, including the Great Recession of 2007 to 2009, Thompson said in an email.
"The hollowing-out of the middle class reflects long-term trends in the economy resulting from rising returns to education and uneven education attainment among the population and the decline of the intact nuclear family," he said.
The urban areas dragged down Nebraska's statewide median household income to $51,381, a drop of 5 percent in inflation-adjusted dollars from the 2000 census to the 2008-12 survey.
Creighton University economist Ernie Goss offered his interpretation of the urban data: From 2008 to 2012, urban areas lost relative income due to the losses from the weakness in residential housing and losses associated with the financial sector, including losses in stock accounts, he said.
"In Nebraska, agriculturally dependent counties began, in January 2009, to experience very healthy gains in household income due to the significant gains in farm income," Goss said in an email. The major contributors to this gain were record low interest rates, which reduced the value of the U.S. dollar and pushed agriculture commodity prices higher, he said.
Nebraska's loss of household income was the 19th best performance among the states. Only four states gained median household income — Wyoming, North Dakota, South Dakota and Maryland.
Wyoming and North Dakota are in energy booms, South Dakota has had agricultural gains, and Maryland's gains come from the proximity to the nation's capital, Goss said.
The District of Columbia outperformed all the states, with a gain in median household income of 16.2 percent, as the nation as a whole lost 8.3 percent to $53,046.