In 1979, Paul Allen and Bill Gates decided to move their computer company from Albuquerque to Bellevue. Microsoft has since exploded, making Gates and Allen two of the wealthiest people in the nation.

According to a new report from the Economic Policy Institute, the Microsoft founders are in rare company in Washington: They’re among the richest 1 percent of the state’s residents, the only percentile to see its income increase since 1979.

In the 35 years since Microsoft put up shop in the Eastside, incomes among the top 1 percent of earners have risen 188.5 percent, while income has fallen 3.4 percent for everyone else.

Wage inequality has become a major talking point. Republicans and Democrats alike are clamoring about methods of reducing the gap between top earners and everyone else, and a recent Oxfam International report said the world’s richest 85 individuals — Gates and Allen included — have as much wealth as the 3 billion poorest.

In the U.S., few states have performed as poorly as Washington at normalizing wage growth across income levels. According to the EPI’s report, Washington is one of 17 states in which all income growth was reaped by the top 1 percent. Washington ranks 10th in the nation in income disparity between the top 1 percent ($1.27 million) and the bottom 99 percent ($47,517), meaning Washington’s top 1 percent makes nearly 27 times more than the bottom 99 percent. That said, Washington’s ratio is below the national average — the top 1 percent of U.S. earners make 29.8 times more than everyone else.


The Great Recession was particularly hard on low- and middle-class earners in Washington. From 1979 to 2007, income for the bottom 99 percent grew 13.9 percent, but they fell 3.5 percent from 2008-2012. Top earners’ income grew 45 percent during the recession.

The authors add some historical context by comparing the top 1 percent’s share of income since 1928. From 1928 to 1979, the income share of Washington’s top earners dropped from 14.9 percent to 8.3 percent, but that share climbed to 20.4 percent by 2007.

Nationally, the top 1 percent of earners have increasingly captured a larger share of income growth. The EPI graphic below charts how much of income growth was snagged by top earners during different periods of economic growth. The 1 percent’s share of income growth has consistently trended upward since 1949.