SmartAsset’s newest study examines recently released Bureau of Labor Statistics data to determine where wage equality is increasing and decreasing, ranking Arizona No. 4 in the nation for year-over-year change in pay disparity. 

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Among the study’s key findings: 

  • Over the last year, pay disparity between top earners and middle earners in Arizona increased 8 percentage points.
  • The minimum amount the top 10% of earners in Arizona make is $120,180, compared to a statewide median wage of $50,060. That means the threshold to enter the top tier of Arizona earners is now 140% of the median income. 
  • Nationwide, California and New York have the greatest wage inequality, while North Dakota has the least.

Wage equality helps define how workers share in economic growth. When top earners pull far ahead of median workers, rising high-end pay concentrates gains among a relatively small group. According to the Economic Policy Institute, earnings inequality has “redistributed wages away from most workers” and stifled “broader-based wage growth.” However, wider wage gaps may also reflect stronger rewards for specialized skills and experience, factors that can help drive productivity and economic expansion.

SmartAsset analyzed 90th-percentile wage thresholds — the wage level at which workers enter the top 10% of earners — in each of the 50 states over the preceding two years. The study calculated how much that threshold exceeded the median wage, expressed as a percentage, and measured the year-over-year change in the disparity.

Key national findings

  • California and New York have the highest rates of wage inequality. The two states’ high concentrations of executive roles, finance jobs, and large technology sectors may explain their outsized wage inequality. In New York, the top 10% of workers earn at least 164% more than the median worker; in California, that figure is 173%.
  • Pennsylvania and North Carolina had the largest year-over-year increases in wage inequality. In both states, the wage threshold for entering the top 10% rose 11 percentage points farther above the median wage, as top-end wages increased faster than wages in the middle.
  • In half of states, wage inequality narrowed. Twenty-five states saw the gap between the threshold for entering the top 10% and the median wage decrease, led by Oregon with an 11-percentage-point decline.
  • North Dakota has the narrowest wage disparity. The Roughrider State is the only state where the median wage is at least half the wage threshold for entering the top 10%.