(Buffalo, NY) Data released by government agencies show that the Buffalo area’s real (adjusted for inflation) private-sector hourly earnings in Mar. 2013 are still down 3.6% from a level before the recession. This equates to a reduction in annual earnings for a typical full-time employee by approximately $1,700 of equivalent 2012 dollars – not small change for most.
This reduction is happening at the same time a general US trend reported by the Congressional Budget Office is ongoing, in which real private-sector wages stagnate or decline since 1979, while income inequality rises. As the national income grows and the real average wage deteriorates, it suggests something mathematically: the distribution of personal income is very uneven and it is shifting from labor to capital. In the US as a whole, income is going disproportionately to a small group of people with extremely high incomes – to both wealthy investors and CEOs of large corporations in the form of capital gains.
Publicly available income data for the Buffalo-Niagara Falls, NY area unfortunately do not allow for an examination of income inequality similar to the US trend cited above, but there is little reason to suspect that it is not rising here as elsewhere in the US. The series of hourly-earnings data from 2007 for the area points to widening inequality during these 6 years. Time will tell whether or not this continues here as part of the worrisome US trend.