Since 1979 incomes of typical households in Gateway Cities have barely grown, while our overall state economy has grown significantly. This is part of a broader pattern we have seen in the national economy over the past four decades: economic growth isn't translating into strong income growth for most households. In the decades after World War the incomes of low, middle, and high-income households grew at roughly the same rate. But not in recent decades. While economic growth has led to average income growing 69 percent in Massachusetts since 1979, that average hides what has been happening for most families: median income (the income of the household at the midpoint of the income distribution) rose less than one percent a year while incomes for the highest income one percent of households increased almost seven times as rapidly, rising 4.5 percent a year.
MassBudget's new report "Income Growth and Gateway Cities: What Happened, and Is there a Path Back to Broadly Shared Prosperity?" shows how this pattern played out in Gateway Cities where median incomes grew even less than in the rest of the state - and in some cases declined (adjusting for inflation). The report also looks at policies that contributed to creating an economy where wages are no longer growing with productivity and at some strategies that could push back against that trend.
