NYC's Wage Gap Widens: High-Earning Workers See Huge Raises, Low-Wage Workers Struggle

The Rich Get Richer in NYC: Wage Gap Widens While Nation Sees Decline in Inequality

While the rest of the U.S. saw significant wage gains for low-income workers during the pandemic and recovery, the situation in New York City paints a different picture. Here, high-wage workers are doing exceptionally well, while low-wage workers are seeing their earnings grow at a much slower rate, leading to increased inequality in the city.

According to a new report from the Center for New York City Affairs, the gap between the highest and lowest earners has widened in NYC, while nationally, inequality has decreased. This disparity raises concerns about the state of the city's economy, especially considering Mayor Eric Adams's optimistic pronouncements about a strong recovery.

A Tale of Two Cities: NYC vs. The Nation

Nationally, low-wage workers saw a 13.2% increase in pay between 2019 and 2023, outpacing inflation. Meanwhile, the top 20% of wage earners saw a modest 4.4% increase. In NYC, the picture is flipped: The lowest-paid workers experienced only a 6% pay increase, while the highest-paid workers saw their salaries jump by 18.2%.

Wall Street Fuels the Gap

This disparity is partly attributed to the strong performance of Wall Street and tech industries in the city. These sectors, known for their high salaries, thrived during the pandemic, resulting in substantial bonuses and increased compensation. As a result, high-wage jobs, which represent a third of NYC's employment, accounted for a whopping 69% of the wage increases between 2019 and 2023, highlighting the disproportionate impact of these sectors on the city's economic landscape.

The Missing Middle: A Hollowed-Out Economy?

The city is also experiencing a decline in middle-wage jobs, particularly in sectors like administration, sales, education, and arts and entertainment. This trend, observed by the Federal Reserve Bank of New York, raises concerns about a potential “hollowing out” of the city's economy. This decline in middle-wage jobs further contributes to the widening wage gap, leaving a significant portion of the workforce behind.

Stagnant Minimum Wage: A Contributing Factor?

The report also points to the stagnant minimum wage in NYC as a contributing factor to the growing inequality. While other states raised their minimum wages an average of 29% between 2019 and 2023, NYC's minimum wage remained at $15 for most of that period. This lack of a significant increase in the minimum wage hinders the ability of low-wage workers to bargain for better pay and further widens the gap between the top and bottom earners in the city.

Mayor Adams Responds: A Focus on Economic Recovery and Affordability

The Adams administration has highlighted its efforts to improve the economy and assist struggling residents, including investments in child care, raising the minimum wage for app-based delivery workers, and expanding workforce development programs. The administration also points to the fact that low-wage jobs in NYC pay more than the nationwide average.

However, the report underscores the importance of addressing the widening wage gap and ensuring a more equitable recovery in NYC. The city's economic future hinges on creating a more balanced environment where all workers can thrive, not just those at the top.