There’s been an increased focus on the gap between the have and the have-nots and how much each group makes. According to a new study, the chasm between the two is getting even wider.
J. Chris Cunningham at the US Bureau of Labour Statistics conducted a study on wage growth between 2003 and 2013, and found that those that were in the top 25% for wages saw what they made rise over the decade. In contract, those in the bottom 75% actually saw their real wages drop over the 10 years.
“The highest paid 10% of wage earners in the United States earned at least $US88,330 per year, while the lowest paid 10 per cent earned less than $US18,190 per year,” said Cunningham. “Therefore, by this measure, the “90 — 10″ ratio in the United States was 4.86 in 2013, compared with 4.54 in 2003, an increase of about 7 per cent over that 10-year period.”
We pulled out some of Cunningham’s most interesting, and startling, findings along with quotes from the study.
'As can be seen in the figure, in general, real annual wages increased for the highest paid workers and decreased for the lowest paid workers, a pattern that holds for most metropolitan areas. Nominal wages for both measures increased, but the 90th percentile grew faster than the 10th percentile.'
'As can be seen in figure 5, the 90 -- 10 ratio increased for all MSA size categories over the period, but it increased much more in the larger areas (those with employment of 1 million or more).'
'The figure also shows that the 90th-percentile wages in the smaller areas grew faster than those in the two middle size categories, but the 10th-percentile wages also grew faster in the smaller areas, which helps explain why the 90 -- 10 ratios grew more slowly in the smaller areas than in the larger areas.'
'The 10th-percentile wage varies little across the size groups while the 90th-percentile wage varies considerably, with higher wages for the larger areas and lower wages for the smaller ones. Thus, the main reason for the higher 90 -- 10 ratios in the larger areas is that the 90th-percentile wage is higher in those areas. In other words, the highest paid workers in the large areas generally earn more than the highest paid workers in the smaller areas, whereas the wages of the lowest paid workers vary less between large and small areas.'
'As can be seen, there is a positive relationship between computer and mathematical occupations employment and the90 -- 10 ratio; that is, areas with more employment in these occupations tend to have higher 90 -- 10 ratios, suggesting greater wage inequality in those areas.'
'The one exception is healthcare practitioners and technical occupations, for which the correlation is weak and the trend line is negative, as can be seen in figure 8. Nationally, the 90th-percentile wage for healthcare practitioner and technical occupations is the third-highest among the 22 major groups, and the average share of total employment is 5.8 per cent. Nevertheless, there is a weak negative relationship among MSAs with respect to employment share in these occupations and their 90 -- 10 ratios.'
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