Income inequality in Wisconsin is declining as lower-wage workers are seeing faster wage growth, according to a recent report from UW-Madison’s High Road Strategy Center.
The State of Working Wisconsin 2024 report, released ahead of Labor Day, notes this change marks a “reversal of trends” from the past 40 years or so. The income gap between lower- and higher-wage workers has been closing in the recovery period following the COVID-19 pandemic shutdowns and continues through this year, the report shows.
“Lower-wage workers and people of color are securing higher wages in recent years, and it is great to see this long overdue trend raising the floor for the workers who need it most,” High Road Strategy Center Associate Director Laura Dresser said in a statement.
But the report also highlights “significant disparities” by gender, race, education and geography continue to define opportunities for state residents. For example, the median hourly wage for Wisconsin women in 2023 was $22.03 compared to $25.09 for men in the state.
But report authors say Wisconsin workers “have a lot to celebrate this year” as state job totals continue setting new record highs — 3,048,000 in June — and unemployment is holding steady near historic lows, around 3%. Median hourly wages “surged” in 2023 to $23.90, up nearly $1 per hour from 2022. This change “far outstrips” usual increases, as the average annual hourly wage increase between 1979 and 2023 was 7 cents.
“Strong wage growth in 2023 brought Wisconsin up to the U.S. median and restored the wage growth that was interrupted by high inflation in 2022,” report authors wrote.
Between 2019 and 2023, lower-wage workers in Wisconsin are seeing the strongest wage gains. Defined as workers earning more than 20% of the workforce, this group has seen wages grow 8% over this period. That’s compared to 3.9% for those earning more than 50% of the workforce, and just 0.9% for those earning more than 80% of the workforce.
“Lower wage workers have seized the opportunity provided by tight labor markets and moved to higher paying jobs and secured higher wages in jobs that they stay in,” report authors wrote. “As a result, our wage distribution is more equal today than it was in 2019.”
Meanwhile, racial disparities in wages persist in Wisconsin as white men continue to earn more than other demographic groups. Median wages for this group were $26.88 per hour in 2023, compared to $22.48 for white women. Black men had a median wage of $19.96 and Black women earned $20.04 per hour. Hispanic men earned $18.19 and Hispanic women earned $18.02.
Compared to the median wages for white men, Black state residents are earning about 25% less and Hispanic residents are earning about 32% less.
But at the same time, the increases in pay for lower-wage workers are helping to close these gaps, as Black and Hispanic women saw “especially strong” wage growth between 2019 and 2023 — 19% and 7%, respectively. No other group had growth above 4%.
The report also highlights declining union participation as one measure of worker success, noting the state’s unionization rate has fallen from 14% to 8.4% between 2011 and 2023, a sharper decline than neighboring states.
The High Road Strategy Center, which describes itself as nonpartisan but often advocates for progressive policies, argues for “restoring union rights” in the report.
“Through unions, working people can negotiate for better wages and working conditions. Wisconsin state policy deters unionization in both the private and public sectors,” report authors wrote.
The group also calls for raising the state’s minimum wage, noting more than 379,000 workers in Wisconsin — including many women and minority workers — would see higher pay if the minimum wage was boosted from $7.25 to $15 per hour. Sectors with lower wages — including retail, restaurants and early childhood education — are largely dominated by women.
“Such a wage adjustment would not only empower more women economically but also bring many low-wage industries closer to the median wage, fostering a fairer economic landscape for female dominated industries,” report authors wrote.
See the full report.
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