Wages and Inequality in Massachusetts

A Labor Day slideshow

By Evan Horowitz, Massachusetts Budget and Policy Center

  • There are still fewer jobs than before the recession began

  • Median wages in Massachusetts have increased 24% since 1979

  • The gap between low-wage and high-wage workers has grown substantially over the last few decades

On this Labor Day--three years after the official end of the "Great Recession"--workers in Massachusetts are still struggling. Here, as across the country, economic growth has been too slow to fully restore the losses of recent years. There are still fewer jobs, higher unemployment, and higher levels of poverty than before the recession began.

And the recession is just one of the factors hampering low and medium-wage workers in Massachusetts. Even when the overall economy was fairly good--in the years before the recession--these workers were receiving a shrinking share of the benefits. More and more of the gains of economic growth were accruing to people at the top of the Massachusetts wage-ladder while workers at the bottom saw virtually no change to their earnings.

In 1984, low-wage workers in Massachusetts (at the 20th percentile) earned roughly 41 cents for every dollar earned by a high-wage worker (at the 80th percentile). By 2011, they were earning just 32 cents. That's a drop of more than 20 percent.

Inequality is actually wider in Massachusetts than in the country as a whole. To a large degree, this is because people in the middle and at the top are doing better than their counterparts elsewhere. While median wages nationwide have been stagnant for over 30 years, the Massachusetts median wage has risen 24 percent. Low-wage earners, however, have not seen similar gains. Their wages are roughly the same today as they were in 1979  (adjusted for inflation), which means that over time those workers have been falling further and further behind.

Some good news for Massachusetts workers

There is some good news for workers in Massachusetts. To begin with, they are faring better than workers elsewhere in the nation. At 6.1 percent, our unemployment rate is lower than the national rate of 8.2 percent, and even when the recession was at its most severe, our economy outperformed most other states.

Perhaps more promising, over the long term, is our emphasis on education. There are many reasons for Massachusetts's relative strength, but one of them has to do with the policy choices we made to develop a highly-skilled and highly-educated workforce. Today, Massachusetts has the best-educated workers in the country, which has helped to make ours a relatively strong, high wage economy.

Many of the economic issues facing Massachusetts are national issues, and they require national solutions. But there are things the state can do to mitigate them. Maintaining and cultivating a well-educated workforce can help the state attract high wage employers, and maintaining an adequate minimum wage can help raise the incomes of our lowest wage workers.

CapeCodToday.com welcomes thoughtful comments and the varied opinions of our readers. We are in no way obligated to post or allow comments that our moderators deem inappropriate. We reserve the right to delete comments we perceive as profane, vulgar, threatening, offensive, racially-biased, homophobic, slanderous, hateful or just plain rude. Commenters may not attack or insult other commenters, readers or writers. Commenters who persist in posting inappropriate comments will be banned from commenting on CapeCodToday.com.