The pay gap between rural and urban workers is getting worse, according to new financial data

City workers make about 23% more than rural workers.
(Campaign creators photo, Unsplash)

Workers in urban areas traditionally have made more money than rural workers, but the pay gap is getting worse, reports Elizabeth Trovall for Marketplace.

“In cities, people earn about 23% more than people in rural areas, according to new data from the Federal Reserve Bank of New York,” Trovall reports. “That difference was more like 20% before the pandemic.”

The pay gap hasn’t always been so pronounced. According to Trovall’s report, “Rural areas were catching up to city wages, mostly because of new technology coming to smaller communities. ‘Then, around 1980, this all changed,'’’ said Conor Walsh of the Columbia Business School.

The loss of manufacturing jobs hurt rural incomes.

(Pitti.edu photo, Unsplash)

“That’s when the lucrative business services sector took off in places like New York, Los Angeles and San Francisco,” Trovall reports. “’In particular, finance, tech and professional services,’ Walsh said. . . . “At the same time, manufacturing jobs started leaving rural America, which helped to widen the gap.”

In addition, there's the long-standing difficulty of getting college-educated students from rural areas to return home after graduation instead of taking higher-paying jobs in larger cities.

The Covid-19 pandemic and high inflation have made the problems with income gaps worse in recent years.

"'Inflation impacted people living in rural areas more because they spent considerably more on goods with higher price increases,'" economist Selcuk Eren of The Conference Board told Trovall. "'What goods am I talking about? I'm talking about vehicle purchases, and I'm talking about gasoline."