Maryland continues to have the highest median household income in the country, but a relatively low wage increase from the previous year may speak to a lack of high-skilled jobs, according to figures released in the American Community Survey on Thursday.
The average Maryland household income is $75,847, just ahead of the District of Columbia, where the median income is $75,628. Maryland was also identified by the Census Bureau for having one of the lowest poverty rates in the country with just over 500,000 people living below the poverty line.
Maryland saw a 2.4 percent increase in median income in 2015, up 2.4 percent from the previous year. The Baltimore metro area including Columbia and Towson saw a 1.3 percent increase in income, at $72,520.
“Generally speaking, it’s very good,” said economist Anirban Basu, CEO of Sage Policy Group. “That’s exactly where you want to be.”
In many ways, the census data confirms what local economists knew to be true.
“The pace of job creation in Maryland has been robust and therefore, it is likely that poverty is in decline and those things were confirmed by this data,” said Basu.
The modest percentage income increase in Maryland, below the national average, is indicative of the creation of more low-wage jobs in the state, particularly positions in retail, home health and distribution. Even new jobs in the health care sector are low- and middle-income positions. Another factor suppressing median household income is the lack of salary increases in the federal government sector, which has a large impact in Maryland, said Basu.
State income tax revenue falling $250 million below projection this year also shows that the new jobs in the state have low wages.
“Given how many jobs we’re adding, one would expect to see more income tax collection,” said Basu.
When the Office of the Comptroller released the income tax figures in August, Maryland Center on Economic Policy Executive Director Ben Orr said it was a sign of economic disparity.
“The lower than expected revenues mean the benefits of Maryland’s economic recovery aren’t being widely shared,” Orr said in a statement. “Although more Marylanders are working, too many people in our state still must struggle to make ends meet.”
Among the high-wage sectors, while cybersecurity is a big player, more traditional jobs such as financial services are bringing home the large paychecks, said Basu.
“The financial sector in Maryland has grown.”
At the same time, life sciences, technology, particularly technology transfer activity at local universities, are also big income drivers.
Basu would also look to small business owners as major income drivers with Baltimore being the exception, especially in the wake of the April 2015 unrest, which is included in the census data. From a statewide perspective, that impact would be muted.
The needle moved slightly in the gender pay gap with women making 80 cents on the dollar compared to their male colleagues nationwide, up from 79 cents in 2014. Median earnings for men in Maryland was $59,085 compared to $50,481 for women in 2015, an earnings ratio of 85 percent, putting Maryland in fourth place in the country. At this rate, the gender pay gap nationally will close in 2152, the American Association of University Women said.
On Tuesday, the Census Bureau reported the largest year-to-year percentage increase in median household income in 17 years nationwide. The 2015 median income was $56,516, up 5.2 percent from the 2014 median.