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Business Ethics and Leadership
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Pre-Tax Wage and Salary Income Inequalities in Largest Metropolitan Areas in the United States

Authors: Achintya Ray;

Pre-Tax Wage and Salary Income Inequalities in Largest Metropolitan Areas in the United States

Abstract

The distribution of pre-tax wages and salaries for employed individuals between the ages of 18-65 in the ten largest metropolitan areas of the USA are studied in this paper using the American Community Survey data from 2019. The included metropolitan areas are Atlanta-Sandy Springs-Roswell, Chicago–Naperville-Elgin, Dallas-Fort Worth-Arlington, Houston-The Woodlands-Sugar Land, Los Angeles-Long Beach-Anaheim, Miami-Fort Lauderdale-West Palm Beach, New York-Newark-Jersey City, Philadelphia-Camden-Wilmington, San Francisco-Oakland-Hayward, and Washington-Arlington-Alexandria. These ten metropolitan areas employed over 39 million individuals representing well over a quarter of the total employed labour force in the USA. Mean, median, standard error of the mean, 25th percentile, 50th percentile, and the Gini coefficient of pre-tax wages and salaries are presented for each metropolitan area. The metros differ significantly in terms of average pre-tax wages and salaries. They differ significantly in terms of the spread in the distribution of pre-tax wages and salaries measured both in terms of the inter-quartile range (the difference between 75th and 25th percentiles) and the Gini coefficient. San Francisco-Oakland-Hayward is found to have both the highest average pre-tax wages and salaries and widest inequality as measured by the Gini coefficient. The Smallest Gini coefficient is observed in Washington-Arlington-Alexandria metropolitan area. Inequality measured in terms of the Gini coefficient is nearly 15% higher in San Francisco-Oakland-Hayward as compared to Washington-Arlington-Alexandria. The average pre-tax wages and salaries are about 83% higher in San Francisco-Oakland-Hayward than Miami-Fort Lauderdale-West Palm Beach, the lowest in the nation. While aggregate nationwide inequalities attract intense attention, these regional variations point to significant and wide-ranging variations between different regions (metropolitan cities). By focusing on the pre-tax wages and salaries, this study allows us to tie inequalities that are most closely related to the labour market conditions, unlike other sources of income like capital gains, inheritance, government transfers, etc.

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Keywords

330, HF5001-6182, дифференциация доходов, ncome Inequality, Gini coefficient, опрос американского сообщества, american community survey, Business, опитування американської громади, коэффициент Джини, regional income distribution, заработная плата до налогообложения, городское неравенство, pre-tax wages and salaries, urban inequality, gini coefficient, нерівність доходів, региональное распределение доходов, коефіцієнт Джині, регіональний розподіл доходів, міська нерівність, заробітна плата до оподаткування, income inequality

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
2
Average
Average
Average
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gold