Reports track region’s wages

Income inequality is low here, but racial disparities persist

For the Capital Region, it appears to be the best of both worlds: We’ve seen wage growth that has pushed us ahead of other upstate cities and we’re “among the least unequal places in the country,” according to a new report from the Federal Reserve Bank of New York titled, “Why Are Some Places So Much More Unequal Than Others?

Growing income inequality has become “a critically important economic and social issue,” said the report, authored by Jaison R. Abel and Richard Deitz. Wage growth patterns, they said, result predominantly from the growing demand for skilled workers

driven by technological changes.

Meanwhile, the erosion of labor unions has weakened their ability to deliver higher wages for their members.

The Capital Region has benefited from its large public workforce — Albany is, after all, the state capital — and those government jobs “tend to be relatively stable and provide steady wage increases,” the study said. And while manufacturing jobs here overall have declined, “the region’s burgeoning nanotechnolog y cluster has helped the region add skilled manufacturing jobs.”

The authors use what they call the “90/10” ratio, representing the wages earned by someone in the 90th percentile of the wage distribution divided by those earned by someone in the 10th percentile.

The larger the ratio, the wider the inequality.

Fairfield, Conn. — consisting of wealthy suburbs surrounding poor inner cities — had the highest ratio in 1980, at 5.6. From there, inequality only grew, and Fairfield, still at the top of the list, had a ratio of 8.7 in 2015, according to the study.

Cities in the bottom 15 include Utica-rome, with a ratio of 4.2. Johnstown, Pa., was at the bottom in 2015, with a ratio of 3.9.

Albany and Glens Falls are at 4.7. New York City is a 7.

At first glance, it would appear that a larger share of the Capital Region population shares in the income gains, especially because the growth was relatively muted once you were above the 90th percentile.

“The Capital District as a whole does better than its peer regions upstate and many across the country,” observed Mark Castiglione, executive director of the Capital District Regional Planning Commission. “We have a large, stable workforce in the public sector, and burgeoning clusters in technology and health care.”

In addition, the Capital Region is highly educated, Castiglione points out.

But a commission study issued last year found racial disparities in household incomes: While white households saw median income rise from $63,586 in 1990 to $67,749 in the 2012-2016 period, AfricanAmerican households saw their incomes decline over the same period, to $37,906 from $39,594. Hispanic households saw a sharp drop between 1990 ($56,757) and 2000 ($44,374), before rising slightly to $46,686 in 20122016. And while Asian median household incomes were the highest in the group, at $72,369 in 1990, they declined to $68,030 by 2012-2016.

Digging deeper, only one of the four counties the planning commission covers saw income increasing among black households, while Hispanic households saw “significant ” decreases, also in three of the four counties. And Asian household incomes fell in Saratoga and Schenectady counties, but rose in Albany and Rensselaer counties.

“We are seeing increasing disparities in races” and their incomes, Castiglione said.

Local officials have highlighted the fact that not everyone is sharing in what appears to be a prospering Capital Region.

Education is seen as key to narrowing the disparities. “Generally, higher levels of education correspond to higher incomes,” the study concluded.

The Fed study found that skills and education also played a role in rewarding those at the upper end of the income distribution. Those individuals, in turn, f locked to larger urban areas that subsequently saw growing inequality.

The Capital Region continues to be attractive to many of those individuals.

Companies such as Regeneron Pharmaceuticals continue to add jobs. Employment at Regeneron in Rensselaer County is approaching 4,000 people.

Castiglione called Regeneron “an incredible employment generator for the region,” and suggested that the nearby city of Rensselaer could capitalize on that for its residents.

But the challenge will be to spread such growth to other upstate cities.

While he said the Capital Region’s per capita income — the highest upstate — illustrated its strength, Capital Region Chamber CEO Mark Eagan said in an inter view last week that it would do even better if the rest of upstate shared that prosperity.