Criminal Law Library Blog
Source: Mohamed Obaidy, Associate Director, Economic Policy Team, Center for New York City Affairs (CNYCA), Income Polarization Redux: NYC’s Wage Gains Are (Again) Flowing to the Top (2026).
Introduction
In Income Polarization Redux: NYC’s Wage Gains Are (Again) Flowing to the Top, Mohamed Obaidy examines recent wage, employment, and productivity trends in New York City and concludes that economic gains are becoming increasingly concentrated among higher-income workers and higher-paying industries. While New York City’s economy continues to grow and workers are becoming more productive, the benefits of that growth are not being distributed evenly across the workforce.
The report argues that New York City’s challenge is not simply generating economic growth but ensuring that the gains from growth are broadly shared. Readers interested in the complete analysis, charts, methodology, and supporting data should consult the original publication including the corrected version of Figure 2 noted below.
Wage Growth Is Increasingly Concentrated at the Top
Drawing on wage data for New York City residents, Obaidy finds that real wage growth between 2024 and 2025 was heavily skewed toward the highest earners.
Workers in the top 20 percent of the wage distribution experienced real hourly wage growth of 5.1 percent, substantially outperforming all other groups. By comparison, workers in the bottom 20 percent saw only modest gains, while middle-income and lower-middle-income workers experienced stagnant or declining real wages.
The disparity is also evident in wage levels. Average hourly earnings for workers in the top quintile exceeded $100 per hour, while workers in the lowest quintile earned slightly more than $14 per hour.
According to the report, this pattern represents a renewed phase of wage polarization in which the highest earners are pulling further ahead while much of the workforce experiences little improvement in purchasing power.
High-Wage Industries Are Capturing Most of the Benefits
The study also analyzes industry-level data using the Quarterly Census of Employment and Wages (QCEW).
Industries already positioned at the upper end of the wage scale experienced the strongest wage and employment growth. Financial services, investment-related activities, corporate management, and certain construction sectors posted particularly strong performance.
By contrast, many low- and middle-wage industries experienced either minimal job growth, outright job losses, or stagnant wages.
The report concludes that labor market opportunities are becoming increasingly concentrated in higher-paying sectors, reinforcing existing patterns of inequality.
Productivity Gains Have Not Been Shared Equally
One of the report’s central findings concerns the relationship between productivity and wages.
Between 2001 and 2024, labor productivity in New York City increased by approximately 36 percent. Economic theory often assumes that rising productivity should translate into rising wages because workers are producing more value per hour worked.
Obaidy’s analysis finds that this relationship has weakened for most workers. Wage growth for the bottom 80 percent of earners has lagged behind productivity growth, creating what economists refer to as a “wage-productivity gap.”
Only the highest-paid workers have seen wage growth that has kept pace with, or exceeded, overall productivity gains.
The report argues that this suggests New York City’s economy is generating additional wealth but distributing that wealth unevenly.
Artificial Intelligence and Future Inequality
The article also explores the potential implications of artificial intelligence.
While many economists expect AI to increase productivity and economic output, Obaidy argues that productivity gains alone do not guarantee improved living standards for most workers. If the benefits of AI are concentrated among highly skilled workers, investors, and high-income industries, existing inequalities may widen further.
The report therefore frames AI not only as a technological issue but also as a distributional issue, raising questions about who will ultimately benefit from future productivity gains.
Policy Considerations
The author contends that economic growth by itself is insufficient to address inequality.
Instead, policymakers should consider measures that affect:
- Wage standards
- Labor protections
- Worker bargaining power
- Job quality
- Minimum wage policies
- The distribution of productivity gains
According to the report, without such measures New York City risks continuing a pattern in which economic growth produces increasing wealth while concentrating a disproportionate share of that wealth among those already at the top of the income distribution.
Correction Notice From CNYCA: An earlier version of this brief published on June 9, 2026, contained an error in the QCEW industry employment analysis used in Figure 2. Using the QCEW geography with consistent detailed industry coverage, the most meaningful change is that high-wage industries had 0.3 percent growth (not 1.2 percent growth). Upper-middle-wage industries had the fastest job growth, with 1.1 percent growth (not -0.7 percent growth). Low-wage industries had 0.7 percent growth (not -1.8 percent growth). The brief and Figure 2 have been revised accordingly. The key findings remain true: real wage gains were concentrated in high-wage industries. Employment growth was more modest and mixed across industry wage groups.
Conclusion
Mohamed Obaidy’s analysis presents a picture of a city that is growing economically but not sharing that growth evenly. The report finds that wage gains, employment growth, and the benefits of increased productivity are increasingly concentrated among high-income workers and high wage industries. As New York City confronts challenges related to affordability, inequality, and the rise of artificial intelligence, the report argues that the critical question is not simply whether the economy grows, but who benefits from that growth.