The Bureau of Labor Statistics crunched income data of U.S. consumers for a 10-year period and the results showed a widening gap between higher wage earners and lower ones.
For the fashion apparel industry, the impact of broadening inequality and stagnant wages is cause for concern — especially as recent reports show sluggish spending at retail.
In the research report released today, economists at the bureau said “rising wage inequality in recent years has brought increased focus on the disparity between the highest wage earners and the lowest wage earners.” The bureau examined consumer income from 2003 to 2013 (the latest year of completed, inflation-adjusted annual wage data), and found that the “highest-paid 10 percent of workers — wages at or above the 90th percentile — increased 4.6 percent, while those for the lowest-paid 10 percent decreased 2.2 percent.”
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The bureau also said wage inequality “varies considerably by metropolitan area.” In larger metro areas and cities, the disparity tends to be greater. For 2013, people in the top 10 percent of the highest paid workers earned $47.06 an hour in metro areas with one million or more workers while in smaller markets, the average pay among the top 10 percent was $34.41. Conversely, for the lowest paid employees, larger markets doled out $9.07 an hour versus $8.57 an hour for small metro areas.
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The topic of income disparity and income inequality has gained interest in recent years as economists cite a middle class that is slowing evaporating. The topic has also been imbedded in political discussions, including stump speeches from 2016 presidential candidates.
Meanwhile, wage growth remains a concern as the Federal Reserve eyes an interest rate hike. Poverty levels are also being carefully observed as increasingly more families are living paycheck to paycheck. The data essentially “showed no change in the economic status of low- and middle-income households from 2013 to 2014,” said the Economic Policy Institute. “Despite an improving economy, the same proportion of Americans is still struggling to make ends meet.”
The institute said this “lack of improvement in the poverty rate illustrates one of the chief catalysts behind America’s persistent poverty: stagnant wage growth that has left too many people without the means to support themselves and their families.”
The U.S. poverty rate for 2014 was 14.8 percent.