A March 2023 paper by economists David Autor, Arindrajit Dube, and Annie McGrew—“The Unexpected Compression: Competition at Work in the Low Wage Labor Market”— uncovered a surprising development: since the COVID 19 pandemic, wage inequality in the U.S. has narrowed. The key driver of this change was strong wage gains among lower-paid workers—especially those without a bachelor’s degree and those under 40.[1]
This chart of the week builds on this insight by tracking a related trend: how real hourly wages at the 10th and 20th percentiles fared both in D.C. and the U.S. relative to the median hourly wage. Percentiles are one way to rank real hourly wages. A given percentile can be thought of as a dividing marker in the hourly wage distribution. For example, the 10th percentile is the wage where 10 percent of workers earn less and 90 percent earn more.
Between 1980 and 2024, the gaps between the median hourly wage and the bottom of the wage distribution increased in the District but decreased nationally. In D.C., the gap between median hourly wage and 10th percentile wage widened by 11 percentage points—from 47 percent to 58 percent. Nationally, in contrast, this gap narrowed by 2 percentage points, from 45 percent to 43 percent. Wages at the 20th percentile followed a similar trend: the gap widened in the District but narrowed at the national level.
While real hourly wages increased both in the District and nationwide, the strongest growth occurred at the bottom nationwide, whereas in the District, the trend was the opposite. Nationally, wages at the 10th and 20th percentiles grew faster than the median hourly wage, helping narrow the wage gap. But in the District, median wages grew the fastest, and wages at the 20th percentile increased more than those at the 10th percentile. As a result, lower-paid residents of the District fell further behind. The slower growth of wages at the 10th and 20th percentiles in the District may reflect the fact that many jobs require specialized technical skills or a high level of education.
Data notes:
The real hourly wage data comes from the Economic Policy Institute’s State of Working America Data Library. The D.C. wage data discussed in this piece applies to District residents.
[1] Interestingly, while the median hourly wage for resident bachelor’s degree holders in the District remained higher than that of high school graduates, the gap closed slightly during the pandemic—from roughly 53.5 percent in 2019 or 2020 to approximately 52 percent in 2024. Nationally, this gap also narrowed, decreasing from about 41.7 percent to roughly 40.7 percent over the same period. See Daniel Burge, “Chart of the week: The widening education wage gap in the District,” D.C. Policy Center, March 28, 2025.