When the highest‑paid workers pull far ahead of the median earner, the benefits of economic growth concentrate among a relatively small group. The Economic Policy Institute warns that such wage inequality can “redistribute wages away from most workers” and dampen broad‑based wage growth. At the same time, larger gaps may reflect higher rewards for specialized skills that boost productivity.
How the study measured wage disparity
SmartAsset examined the 90th‑percentile wage threshold—the pay level at which workers enter the top 10 % of earners—in each of the 50 states. Using U.S. Bureau of Labor Statistics Occupational Employment and Wage Statistics (OEWS) data for May 2024 and May 2025, the firm calculated how much that threshold exceeded the state median wage, expressed as a percentage, and then measured the year‑over‑year change.
Key findings
The analysis ranked states by the percentage‑point change in the disparity between the 90th‑percentile wage and the median wage from 2024 to 2025. While the report lists every state, the most notable trends include:
- States such as California, New York, and Massachusetts showed an increase in the gap, indicating that top‑tier earnings grew faster than median wages.
- Conversely, states like Alabama, Mississippi, and West Virginia recorded modest declines in the disparity, suggesting a narrowing of the wage gap.
- Several Midwestern states, including Indiana, Ohio, and Iowa, experienced relatively stable gaps, with only one‑ or two‑percentage‑point shifts.
Understanding the numbers
OEWS figures are derived from survey‑based estimates that multiply hourly wages by 2,080 hours to approximate annual earnings. Because the data exclude self‑employed workers, certain agricultural employees, private household staff, and military‑specific occupations, the results represent a broad but not exhaustive picture of the labor market.
Small changes—often only one or two percentage points—should be interpreted cautiously. The study’s authors note that such shifts may fall within the margin of sampling error. Nevertheless, the overall pattern provides insight into how wage structures are evolving across the nation.
Why the gap matters
Wage disparity matters for families, churches, and communities that rely on steady, middle‑class incomes to support households and local economies. When top earners capture a larger share of total wages, fewer families benefit from the fruits of economic expansion. At the same time, rewarding specialized talent can encourage innovation and growth, which may eventually lift wages for all workers.
What policymakers can consider
State leaders and business groups can use these findings to evaluate workforce development programs, education initiatives, and tax policies that aim to broaden opportunity. By targeting training for high‑skill occupations and supporting industries that pay well above the median, states may help narrow the gap while still fostering economic dynamism.
Looking ahead
The next round of OEWS data, expected for May 2026, will allow analysts to track whether the trends observed in 2024‑2025 continue, reverse, or stabilize. For now, the mixed picture underscores the importance of balanced policies that promote both skilled‑worker growth and wage fairness for the broader population.
Original reporting: KTVZ (Central Oregon) — read the source article.
