The rich are getting richer – but low-income Americans are actually getting poorer

As record-setting inflation has rapidly made life more expensive, just over one in four workers say their income have increased as well – and almost as many say they’re actually making LESS money, according to new data from the Ipsos Coronavirus Consumer Tracker.

28% of Americans in the workforce say their income increased since this time last year, compared to 26% who say their income decreased in the same period. But the gains and pain have not been evenly distributed. In fact, those who make more than $100,000 a year were nearly twice as likely as those making less than $50,000 a year to say their income increased – 39% of those with high incomes compared to 21% of those with low incomes.

“Income inequality is a very real concern in America, and while much has been made of higher wages and job mobility for warehouse workers and retail employees, this data shows a concerning trend,” said Seth Traum, managing partner at Ipsos Strategy3. “If Americans are going to make it through this inflationary period, businesses will need to make sure that not only are they meeting their bottom lines, but they are paying their employees the salaries to do so as well.” 

So what led people to getting higher incomes? Despite talk of the Great Resignation, the most common way people increased their income was by getting a raise at their current job – two in five (40%) cited this. But a sizable number DID say they got their raise by taking a new job – one in four (27%). And another 19% say their income increased because they took on an additional job.

Income inequality takes many forms in our data: There’s also a notable gender difference among those who got raises. Men were more likely to say their income increased – 32% compared to 25% of women. And 27% of women say their income decreased, compared to 23% of men. This aligns with reports from the Kaiser Family Foundation and many others on the unequal burden that women have carried during the pandemic – not to mention longstanding trends in income disparities.

Young people and college graduates are also far more likely to say their income increased in the past year.

• 38% of young adults, age 18 to 34, say their salaries have increased, compared to only 22% of 35- to 54-year-olds and 21% of Americans over 55
• These older groups are also far more likely to say their salaries stayed flat; more than half say this is the case
• People with college degree far more likely to say their salaries increased: 37% say they got a raise compared to 24% of people without degrees

Will others soon leave their job in pursuit of more money or a better work-life balance? More than one in five people (22%) say they want to leave their job in the next month, including a whopping 35% of 18- to 34-year-olds. Beyond age, though, numbers are mostly consistent across income, education, full- vs. part-time, race and ethnicity.

With inflation (and COVID) lingering and the Federal Reserve pulling out more tricks to halt it, there are likely to be more rough seas ahead for employees and businesses both. Keeping your workers happy and well-compensated is likely to ease the ride as we forge forward.