Worcester Incomes Fall Far Behind the Rest of Massachusetts

Friday, July 15, 2016

GoLocalWorcester News Team

The income for Worcester residents is falling further and further behind the rest of Massachusetts.

The median household income in Worcester grew at less than one-half of the rest of the Commonwealth.

“By contrast, Massachusetts income per household overall increased 69 percent, with the gains heavily concentrated among the highest-income households,” said a Phineas Baxandall, MassBudget.

Incomes of households in Worcester are slightly better stagnant, while the Massachusetts economy has grown significantly since 1979, according to a new study by MassBudget, a non-partisan public policy research organization.

Massachusetts Growth v. Worcester Stagnation

The study, which details city by city Census data on income stagnation, reveals that in six cities, median income in 2012 was below 1979 levels, in inflation-adjusted terms. In underscoring the widening income gap in Massachusetts, the MassBudget report pinpoints the need for clear policy solutions to address wage stagnation.

In the decades after World War II until 1979 the incomes of low, middle, and high-income households grew at roughly the same rate. If that pattern had continued and median incomes in Worcester grew at the same rate as overall income, then the median household income in Worcester would be $70,000 instead of $45,000.

“Restoring the connection between productivity growth and wage growth is one of the most important challenges our nation faces,” said Noah Berger, President of MassBudget and co-author of the report. “The way it used to work in America is that when the economy became more productive wages grew right along with productivity. If that pattern had continued we would see much higher incomes for middle and low-income families in Gateway Cities and for working people across the Commonwealth.”

The report, “Income Growth and Gateway Cities: What Happened, and Is there a Path Back to Broadly Shared Prosperity?” continues MassBudget’s research detailing how the incomes of most families are not growing with the economy. Gateway Cities generally follow a more pronounced version of the state’s income trends in recent decades, though the study shows some variation. Overall, the study reveals how families in Gateway Cities are falling behind: Only two Gateway Cities saw median income growth reach levels even roughly half the rate of income per-household of the Massachusetts economy as a whole.
The study identifies a number of policies that can contribute to income growth. For instance, Massachusetts is increasing our minimum wage to $11 hour by 2017, which will raise wages for many low and moderate-income workers.

The wage floor remains far below what the minimum wage would be if it had grown at the same rate as economic productivity since 1979. The paper also shows how average local wages in Massachusetts correspond closely to educational attainment, and highlights strategies to help kids in school that are particularly important in Gateway Cities.

“Stagnant wages are an impediment to the American Dream, a dream that brings so many people to Gateway Cities like Worcester,” said Worcester City Manager Edward M. Augustus, Jr. “In Worcester, we remain focused on investing in the education of our young people, and in improving access to transportation. It’s these kind of investments that I believe will continue to build quality of life and make our community a great, and affordable, place to live for all.”

“Income inequality is a scourge and a sin on our nation,” said Rev. Jose Encarnacion, Chair of Worcester Interfaith. “It needs to be dealt with now to narrow the divide between the haves and the have nots. We need a higher minimum wage and more funds for education and job training."
A “Gateway City” is a state designation that includes Worcester and 25 other medium-sized cities in the Commonwealth with lower than average incomes and rates of educational attainment of bachelor’s degrees.

Related Slideshow: The Household Income Gaps of Worcester County Cities and Towns

The below slides list the most financially unequal cities and towns in Worcester County, in order of least to most unequal. For each community, the percent of residents with household incomes at the very bottom and the very top of the income scale are listed. In addition, the median household income, which is the amount made by those in the middle, and the percent of those at the median are also provided for each community. The degree of inequality is measured by comparing the combined percent of those at the top and bottom with the percent of those in the middle. If the total percent of those at the top and bottom exceeds that for the middle, the community is has greater financial inequality than the one where most income earners are in the middle. Higher scores indicate greater financial inequality. Lower scores indicate less.

Worcester Incomes Fall Far Behind the Rest of Massachusetts

Related Slideshow: The Household Income Gaps of Worcester County Cities and Towns

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