Rising Wage Inequality in Illinois in 2 Graphs

Inequality is on the rise.

A recent ILEPI Economic Commentary shows Illinois’ growing inequality in two simple graphs.

In Illinois, The Top 10 Percent and the Top 1 Percent of workers have experienced substantial increases in hourly earnings since 1985.

Over the past 30 years in Illinois:

  • The wages of the Bottom 10 Percent have only increased by $1.29 per hour,
  • The wage of the median worker has grown by $1.65 per hour,
  • The Top 1 Percent have seen an increase of at least $25.14 per hour.

Screen Shot 2016-05-09 at 10.08.29 AM

As a result, wage inequality has escalated in Illinois:

  • The Top 1 Percent took home at least 783 percent more per hour than the Bottom 10 Percent and 314 percent more per hour than the median worker in 1985.
  • Three decades later, The Top 1 Percent now earns at least 933 percent more per hour than the Bottom 10 Percent and 413 percent more than the median worker.

The rich have gotten richer while middle-class Illinois residents have been left behind. The hourly wage of the median Illinois worker has only increased by 9.8 percent over the last 30 years. Meanwhile, the Top 10 Percent and the Top 1 Percent of workers have experienced wage gains of about 36 percent.

In addition, the median worker has seen the smallest growth in hourly wages in Illinois. Hourly earnings grew at a faster rate for both the Bottom 10 Percent and the Bottom 25 Percent of workers than for the median worker from 1985 to 2015. This reinforces the story of a “middle-class squeeze.” While the income disparity has widened, the middle class has been shrinking in Illinois.

Screen Shot 2016-05-09 at 10.08.34 AM

Economic inequality has increased to levels not seen in decades, characterized by significant gains at the very top of the income distribution. There are many reasons for this: the declining real value of the minimum wage, the long-term decline in worker unionization, a tax code that primarily benefits the rich in Illinois, and the redistribution of wealth from labor to capital.

Extreme income disparities can have negative effects on the economy by reducing consumer spending, polarizing opportunities, stagnating intergenerational mobility, worsening health outcomes, increasing criminal activity, and decreasing happiness.

Illinois’ lawmakers can– and should– take steps to reduce inequality and counter the middle-class squeeze.

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