New Data Show Rising Inequality, Strong Wage Growth for Top Earners
September 11, 2025 |
ALBANY, NY | Fiscal Policy Institute Director Nathan Gusdorf released the following statement regarding this morning’s release of new economic data from the Census and the Bureau of Labor Statistics:
“New economic data released this morning show that inequality is rising in New York, with income gains for the state’s richest residents driving statewide wage growth well above the national average. At the same time, low- and middle-income households saw wage gains below the national average, and overall statewide job growth lags behind the national average – highlighting the economic challenges facing New York’s working families.
“Wage growth for high earners has driven strong tax revenues, contributing to the State’s $3.9 billion surplus for the most recent fiscal year. The continued strength of the state’s high-wage industries, paired with historic federal tax cuts for these same top earners, presents an opportunity for New York’s elected policymakers to enact the revenue measures necessary to both offset impending federal funding cuts and embrace new measures that will make the state attractive and affordable to working- and middle-class households, in particular affordable housing and childcare.”
Background:
The state economy is seeing strong wage growth for high earners, but weak wage growth for working and middle class households:
- In the first quarter of 2025, total wages in New York grew 8.0 percent. They rose just 4.8 percent in the US as a whole.
- This follows annual wage growth of 6.6 percent in 2024—outpacing nationwide growth of 5.7 percent.
- Income growth for both low-income and middle-income households in New York was lower than the national average.
- Low-income households saw their incomes rise 0.7 percent in New York, as compared to 1.9 percent nationally; middle-income households in New York saw their incomes rise 1.6 percent as compared to 2.1 percent nationally.
Job Growth has fallen behind the national average:
- New York job growth has remained subdued, with annual growth of 0.6% in the first quarter of 2025 and 1.2% in 2024, lower than national growth.
- Growth in total wages, therefore, has been driven by rising average wages in high-paying industries.
Figure 1. New York and US real wage growth by income group from 2023 to 2024
Income growth for higher-income households exceeded the national average, with the top 20 percent of New York households seeing a 2.9 percent increase, as compared to 1.4 percent nationally, and the top 5% seeing 3.8 percent growth as compared to 0.7 percent nationally.
Figure 2. Share of low- and high-income households in New York and the US
New York’s middle class is smaller than the rest of the country: The share of households earning less than $25,000 in the state is 13 percent higher than the US as a whole. New York’s share of those earning more than $200,000 is 26 percent higher.
Figure 3. Gini measure of income inequality in New York and the US
New York’s income inequality rose in 2024—it remains the highest of any state. By contrast, national inequality fell in 2024.
New Data Show Rising Inequality, Strong Wage Growth for Top Earners
September 11, 2025 |
ALBANY, NY | Fiscal Policy Institute Director Nathan Gusdorf released the following statement regarding this morning’s release of new economic data from the Census and the Bureau of Labor Statistics:
“New economic data released this morning show that inequality is rising in New York, with income gains for the state’s richest residents driving statewide wage growth well above the national average. At the same time, low- and middle-income households saw wage gains below the national average, and overall statewide job growth lags behind the national average – highlighting the economic challenges facing New York’s working families.
“Wage growth for high earners has driven strong tax revenues, contributing to the State’s $3.9 billion surplus for the most recent fiscal year. The continued strength of the state’s high-wage industries, paired with historic federal tax cuts for these same top earners, presents an opportunity for New York’s elected policymakers to enact the revenue measures necessary to both offset impending federal funding cuts and embrace new measures that will make the state attractive and affordable to working- and middle-class households, in particular affordable housing and childcare.”
Background:
The state economy is seeing strong wage growth for high earners, but weak wage growth for working and middle class households:
- In the first quarter of 2025, total wages in New York grew 8.0 percent. They rose just 4.8 percent in the US as a whole.
- This follows annual wage growth of 6.6 percent in 2024—outpacing nationwide growth of 5.7 percent.
- Income growth for both low-income and middle-income households in New York was lower than the national average.
- Low-income households saw their incomes rise 0.7 percent in New York, as compared to 1.9 percent nationally; middle-income households in New York saw their incomes rise 1.6 percent as compared to 2.1 percent nationally.
Job Growth has fallen behind the national average:
- New York job growth has remained subdued, with annual growth of 0.6% in the first quarter of 2025 and 1.2% in 2024, lower than national growth.
- Growth in total wages, therefore, has been driven by rising average wages in high-paying industries.
Figure 1. New York and US real wage growth by income group from 2023 to 2024
Income growth for higher-income households exceeded the national average, with the top 20 percent of New York households seeing a 2.9 percent increase, as compared to 1.4 percent nationally, and the top 5% seeing 3.8 percent growth as compared to 0.7 percent nationally.
Figure 2. Share of low- and high-income households in New York and the US
New York’s middle class is smaller than the rest of the country: The share of households earning less than $25,000 in the state is 13 percent higher than the US as a whole. New York’s share of those earning more than $200,000 is 26 percent higher.
Figure 3. Gini measure of income inequality in New York and the US
New York’s income inequality rose in 2024—it remains the highest of any state. By contrast, national inequality fell in 2024.