Income Inequality is Rising So Fast Our Data Can’t Keep Up

Labor News

(Illustration by Christopher Ingraham for The Washington Post/Illustration by Christopher Ingraham for the Washington Post)

Reprinted from The Washington Post by Christopher Ingraham on February 21, 2019.

Wages at the top of the income distribution continue to rise much more rapidly than wages for everyone else, according to an analysis of the latest federal data by the Economic Policy Institute, a progressive think tank.

But the data are just as notable for what they don’t say, according to the report by EPI economist Elise Gould. Increases in wages at the top are outpacing economists’ ability to measure them because the federal survey tracking the wage data “top-codes” the highest earnings amounts: For confidentiality reasons, wages are fully recorded only up to a certain threshold. The Bureau of Labor Statistics and the Census Bureau, which jointly administer the survey, haven’t changed that threshold in 20 years, even as top incomes have skyrocketed. As a result, the survey is capturing less information on top pay than it used to.

“All workers who report weekly earnings above $2,884.61 (annual earnings for full-year workers above $150,000) are recorded as having weekly earnings of exactly $2,884.61, to preserve the anonymity of respondents,” Gould writes. That top-code threshold hasn’t been updated since 1998. As a result, the survey is becoming less useful for tracking top incomes at a time when public concern over inequality is growing. Representatives from the Census Bureau did not immediately respond to a request for comment. …

Washington Post 2/21

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About Jeffrey Burman 5247 Articles
Jeff Burman served on the Guild’s Board of Directors from 1992 to 2019. He is now retired. He can be reached at jeffrey.s.burman.57@gmail.com.

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