America’s Widening Wage Divide

October 29, 2015

By Amy Holloway

The national conversation about growing inequality among middle and lower income families is reaching a fevered pitch. As tents go up in preparation for the 2016 political circus, we expect this issue will continue to make headlines.

This month, Avalanche Consulting and Headlight Data were inspired to dig into the issue and share the real numbers behind the story. This post is the first in a three part series in which we explore America’s widening wage divide, its impact on attainable housing, and what it means to the economic development profession.

To begin, Headlight Data explored the change in real wages by income bracket for the past decade in the largest U.S. metros. The findings are so dramatic that they caught the attention of Forbes, which republished our findings in an article and slideshow last week.

What are the findings of our analysis? The disparity in wage growth in our country is substantial. Real wages have been decreasing for lower-wage earners and increasing for higher-wage earners over the past 10 years. The top half of workers saw their real wage (adjusted for inflation) grow 3% while the bottom half of workers saw if fall 4%. Not only is wage growth flat, but inequality is getting worse. And these trends vary greatly across metros.

If our role as economic developers is to improve the health of our communities’ economies – for all residents – then this is an issue that calls for strategic solutions. Solving the issue starts with acknowledging that the issue is real and setting our sights on bridging the gap in our communities. (Teaser… We will share tactical ideas for economic developers in our December newsletter.)

To learn more, read Headlight Data’s article on real wage change by income bracket for the U.S. and major metros.