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September 19, 2018

Falling behind: Worcester median income drops nearly 6%

Photo/Grant Welker Worcester may not be keeping up with the state and national economy. The city's median household income fell nearly 6 percent last year, and more households fell into poverty.

The median income for a Worcester household fell by nearly 6 percent last year, according to Census data released this month, appearing to show the city being left outside of broad economic gains felt by the rest of the county and state.

Since a peak in income in 2013, median income in Worcester fell by 10.5 percent.

That's a sharp contrast from the rest of Massachusetts, where median household income rose by nearly 3 percent last year and by 12 percent in the last three years.

More Worcesterites also appear to be falling into poverty, despite an unemployment rate in the city of just 4.9 percent in July.

In the most recent year, Worcester saw more households report incomes below $15,000. In 2016, 17.9 percent of households said they were in those lowest income categories. By 2017, that number rose to 21.9 percent.

Statewide, just 10.1 percent of Massachusetts households fell into those categories. For a household of one, the federal poverty rate is $12,144 in income annually, according to the state. For a family of four, the threshold is $25,104.

At the same time, the city could be losing its top-earners.

In 2017, Worcester households earning $75,000 or more made up 27.7 percent of the population. Just a year prior, it was 44.8 percent. In 2013, it was 37.9 percent.

Across Worcester County and the Worcester metropolitan area, which also includes Connecticut's Windham County, the numbers were more encouraging.

Worcester County saw incomes rise last year by $1,102, or 1.6 percent. Across the metro area, incomes rose by $1,649, or 2.4 percent.

Thomas White, an Assumption College economics professor who studies the Worcester area economy, called those more regional views more indicative of the local strength of the economy.

"I think the fall in income in Worcester city is not an indicator of the strength or weakness of the local economy as much as the degree to which economic growth is shared across the region," White said. "This is related to the increase in income inequality that we have seen at the national level over the past several decades."

Timothy McGourthy, the executive director of the nonpartisan Worcester Regional Research Bureau, cautioned that the year-to-year income data was a relatively small sample size and that data over a five-year period, including 2017, showed that income had essentially remained flat. The five-year sample collects from a larger sample of people, he said.

"It’s possible that one year’s sample is simply markedly different from the prior year’s sample," McGourthy said.

Of the five-year-period totals, McGourthy said he thinks Worcester "is following national trends where incomes have not kept pace with productivity and may finally turn the corner now due to low unemployment rates."

The latest Census data appears to put Worcester outside the economic growth felt by the rest of the state, particularly greater Boston and raises questions about whether Worcester is attracting enough higher-earning residents and jobs during long bull market.

In Boston, median incomes grew last year by 5.4 percent to $66,758.

Median incomes among Massachusetts households grew by $2,088 from 2016 to '17 and $10,167 from 2013 to '17. The state unemployment rate is 3.9 percent.

Each of the other five New England states also saw annual income increases in each of the past five years except for a slight drop in Vermont last year. Nationally, median household income in the past year grew by 1.8 percent to $61,372.

Worcester was not the only one among New England's largest cities to have its median household income fall last year. Springfield and Hartford fell by 6.8 percent and 8.9 percent, respectively. Worcester's fell by 5.6 percent.

From 2016 to '17, the median household income in Worcester dropped by $2,459. From 2013 to '17, median household income dropped by $4,888.

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