What does rising income inequality mean for the future of work?

Without intentional action, the current wage and wealth gap could surge.



Workers at the mid-to-lower end of the economic spectrum are both more likely to hold jobs at high risk of being replaced by technology and are less likely to have the resources needed for training and upskilling. Without change, some of today’s workers will lack the necessary skills to remain employed in the future, which will in turn increase pressure on government services and programs.

Wages for low- to moderate-income workers in the U.S. have been stagnating and failing to keep up with rising costs of living for decades. The gains from increased worker productivity have accrued at the top, leaving most workers with narrower and decreasing margins to save and get by. At the same time, health, housing and education expenses have increased substantially, and debt loads have risen. These circumstances can combine to have long-term effects on the health and mental well-being of workers and their families and can also affect longevity. Inequality can also have long-term effects on society at large due to decreased consumer spending, higher reliance on public benefits and potential social upheaval.

Financial vulnerability exists especially among people of color, who are often concentrated in lower-wage occupations with limited benefits. If incomes don’t rise substantially in these occupations, workers will be unable to retire when they want or need to. An additional challenge for these workers is that many older workers are being phased out of their jobs due to age discrimination and other factors, leaving them in financial hardship.

“I work for a company that provides healthcare solutions, but I can't afford to put my family onto their health plan.”

— Shawn H., Portland, OR, participant in AARP focus group


With the gap in income inequality growing, there will be challenges for employers and workers alike.

Opportunities for workers

None (there are no opportunities for workers in growing income inequality, making this megatrend critical to address and minimize).

Challenges to workers

  • Access to education, upskilling and reskilling that could minimize income inequality is not always available or affordable for everyone (see Megatrend: Lifelong Learning).
  • Government-funded job training programs and some public benefit programs are underfunded and inadequate in helping to bridge income gaps.
  • Workers with low earnings are more likely to be exploited by employers.
  • Financial insecurity and its related stress can impact health and productivity.
  • Workers with low earnings also tend to have more volatile earnings and a smaller financial cushion, making it harder to absorb even minimal financial shocks and setbacks.
  • Workers with low earnings may need to work into later years to increase their financial security, but may not be able to because of health limitations and the difficulty of continuing work in physically demanding jobs.

Opportunities for employers

None (there are no opportunities for employers in growing income inequality, making this megatrend critical to address and minimize).

Challenges for employers

  • Income insecurity reduces productivity as workers experience stress about making ends meet rather than focusing on the work at hand.
  • Income inequality can reduce purchasing power and thus consumer demand for some goods and services.


  • Policymakers can increase access to affordable job training and education opportunities (see Megatrend: Need for Lifelong Learning).
    • Include assessment of current skills, transferable skills and skills gap identification.
    • Provide special focus to proactively assist workers who are most vulnerable to automation and those who are midlife or midcareer (see Megatrend: Advances in Technology).
    • Create clear career path opportunities to higher-wage jobs.
    • Create multisector collaborations and private/public partnerships that support education and training necessary to pursue career path opportunities.
  • Governments, employers and the financial services industry can create public-private partnerships to develop supplemental savings and investment tools and can include financial education for workers to help them understand how to use these tools to support current and future needs.
  • Governments can enforce labor standards and protections.
  • Policymakers and companies can improve job quality through paid leave, retirement savings programs, health insurance and other benefits.
  • Policymakers and employers can focus on the needs of people historically facing low wages and income inequality when designing new policies and solutions.


If you want to dive a little deeper, check out these informative thought pieces from experts.


Recruiting and Retaining Older Workers, Especially Low-Wage Employees, is a Must for U.S. Businesses. Here are Tools Employers Can Use.
Todd Greene,Vice President, Urban Institute and Executive Director, WorkRise

The Older Workforce Renaissance 
Xenia Viragh, Natalie King, and Anika Heavener, The SCAN Foundation

4 Workplace Benefits to Help Address Financial Challenges for Older Employees, Today and Tomorrow
Rodney Bolden, Head of Industry Engagement and Learning, Morgan Stanley at Work

Consider these Four Challenges to Expand the Narrative beyond “Working Longer”
Christina Matz, MSW, PhD,  Associate Professor, Boston College; Director, Center on Aging & Work

Building a Gender-Equitable Economy is Not a Women's Issue - It's Everyone's Issue
Heather McCulloch, Founder, Women In the Economy; Entrepreneur-in-Residence, Aspen Institute Financial Security Program

Procurement Contracts for Small Business Owners Are Key to Countering Rising Income Inequality
Warren McLean, President of Northside Economic Opportunity Network in Minneapolis, MN


Living Longer, Rising Costs and Income Inequality Shape Older People's Quality of Life
Ebony P. White, Director, Racial Economic Justice, Prosperity Now


A Point of View on Income Inequality

William J. Arnone, Chief Executive Officer, National Academy of Social Insurance


The Climate Crisis and Economic Inequality Endangers Older Workers, but Policymakers Can Act
Indivar Dutta-Gupta, Co-Executive Director of the Georgetown Center on Poverty and Inequality and executive committee member of the National Academy of Social Insurance board of directors


Five Steps to Build a Better Labor Market in the Future of Work

Shad Ahmed, Chief Operating Officer, Opportunity@Work





As life expectancy increases, many people will want or need to work longer. These workers are already huge contributors to economic growth, and their impact will only grow.

Learn more

Light Bulb

Lifelong learning

Skill needs will change over time, so workers, employers and policymakers need to figure out how to ensure that workers can learn new skills to keep.

Learn more

Technical Materials

Advances in tech

The nature of work will continuously change with technological advances, including automation, robotics and artificial intelligence. These technological changes could have an outsized impact on older workers.

Learn more

String and measure tape

Contingent work

Employers are increasingly hiring contingent workers, which provides greater flexibility, but also more risks and less stability for workers.

Learn more