Income growth: If growth were inclusive, all workers would see their incomes rising, with the largest gains among lower-wage workers.
Insights & Analyses
- Income has decreased most dramatically from 1980 to 2022 for workers at the bottom rung (in the 10th percentile) and has increased most dramatically for workers at the top (in the 90th percentile).
- Income has increased steadily in recent decades for the highest-earning workers, from $112,890 in 1980 to $142,680 in 2022.
- Only two states (Alaska and Wyoming) saw declining incomes for top earners between 1980 and 2022. Thirty-five states saw declining incomes for workers at the 10th income percentile during this period.
Drivers of Inequity
Reduced bargaining power among workers due to declines in union membership and corporate consolidation as well as a higher average unemployment rate have caused incomes for low-wage workers to grow more slowly than those of high-wage workers. Growing trade with low-wage countries, automation, and stagnant minimum wage rates also contribute to income inequality. However, growing income inequality disproportionately impacts women and people of color as these populations are concentrated in low-wage jobs. This trend is a result of historical practices, such as racial segregation and policies that banned women and people of color from accessing education and higher paid professions, as well as ongoing factors, including biased hiring practices and inadequate childcare support.
Strategies
Grow an equitable economy: Policies to create good jobs for all
- Raise the floor on low-wage work by increasing the minimum wage or enacting living-wage laws, requiring paid sick days, ending wage theft, strengthening workers' rights to organize, and ensuring fair scheduling.
- Ensure entrepreneurs of color can access the capital and know-how to launch and expand their businesses.
- Target economic development and workforce efforts to grow high-opportunity sectors that provide pathways for people without four-year degrees.
- Leverage anchor institutions to support local and minority-owned businesses.
- At the federal level, institute a federal jobs guarantee, dedicate 1 percent of infrastructure investments to a fund for inclusive job and contracting supports, enact a $15/hour minimum wage for all workers, and guarantee workers’ right to organize at scale.
Strategy in Action
California law set to improve protections for fast food workers. Over half a million workers in the state work in the fast-food industry, a sector that struggles with low-wages, wage theft, harassment, and overall unsafe working conditions. One in five families with a member in the fast-food sector has an income below the federal poverty line. In September 2023, Governor Gavin Newsom signed the Fast Food Industry legislation, AB 1228, into law which raised the minimum wage of fast-food workers to $20 per hour and established a nine-member Fast Food Council made up of fast food workers, union representatives, and fast-food industry and franchise representatives to create minimum standards of wages and working conditions. Labor advocates including the Service Employees International Union (SEIU) believe that this legislation is one of the biggest pieces of labor law passed in the past decade as well as a step towards sectoral bargaining. A 2024 study found that this legislation led to an 18 percent increase in hourly wage for fast-food workers without reducing employment. Similar efforts have passed in New York and Seattle. Read More.
