Boston’s low-wage workers struggle to rise, BRA study shows
By NBP Staff | March 15, 2016, 17:44 EDT
BOSTON – Low-wage workers in Boston, the economic engine that drives the region, have largely been passed over by growth for a quarter century, in terms of real income, according to a report issued by the Boston Redevelopment Authority.
The roughly $35,000 inflation-adjusted median income for Boston residents who worked in 2014 was about the same as in 1990 and in 2000, according to the report, which shows most future job growth will come in occupations that require at least a four-year college degree. Most college-educated workers, 77 percent, earn more than the median income.
“For more than a generation, the incomes of Boston residents in the lower half of the income distribution have remained stagnant,” the report says. For a family with two working adults and a preschool-aged child, the combined median income would be barely enough to cover basic living expenses in the city, the BRA said.
The study underlines an earlier examination of incomes in Boston by researchers at the Brookings Institution in Washington. Their study, published in January, showed Boston had the widest gap in household incomes between the poorest and richest of all residents, in a ranking of the nation’s 50 largest cities.
Among Boston households earning more than 95 percent of all households in the city, their income was about $266,000, or almost 18 times higher than the almost $15,000 earned by households with incomes of more than 20 percent of all those in the city.
“This phenomenon is not unique to Boston, as growing inequality, a shrinking middle class, and stagnant incomes at the bottom of the distribution continue to make headlines nationally,” the BRA said in its report. “It is, however, particularly pronounced in Boston, where sectors like finance and high tech employ college-educated workers at high wages, and those without a college degree are heavily concentrated in low paying personal service industries.”
But the Brookings researchers said at least part of the reason for the wide gap stems from the large proportion of Boston families that include students, presumably spending at least part of their time in college so not able to work as much as nonstudents.
The agency estimated there were about 700,000 jobs in the city in 2014, and put the median income of resident workers not in school at $41,000. The agency also estimated that about half of those earning the all-worker median wage or less worked part-time. The percentage of workers with part-time employment has held steady at roughly a quarter (about 26 percent) since the Great Recession, when it climbed from under 22 percent.
But the BRA study also showed a disproportionate number of city residents work in low-wage industries in Boston, such as food-service or hotels, while more than half of the jobs in the best-paying sectors, such as finance and professional services, commute into the city to work.
City residents are “overrepresented” in low-wage industries, which employ 9.5 percent of Boston-resident workers, the BRA said. Those jobs paid a median annual full-time wage of about $30,000, it said. The report estimates that 36 percent of Boston residents 25 or older have a high school education or less.
“These findings underscore the imperative of our mission,” said Trinh Nguyen, the director of the city’s Office of Workforce Development. “We must work to create viable career pathways between disadvantaged workers and living-wage jobs.”
The BRA said a “living wage” in Boston as of July 2015 paid $14.11 an hour, or almost $29,000 for a full-time job. It said 17 percent of full-time workers in the city didn’t earn that much in 2014.