Median Earnings

Louisville’s economic development efforts must create jobs that keep families out of poverty and those that create higher incomes to drive economic prosperity. Factors like high wage job attainment, unemployment, and affordable housing indicate the state of the job market and the ability of residents to achieve financial independence and stability. The main metric for 21st-century workforce and talent is median earnings. Louisville has a target goal of being in the top 50% of its peers in median earnings.

Peer City Comparison

Louisville’s median earnings of $33,300 ranks 6th among its peer cities.

Louisville is in the middle of its peer group according to a natural breaks algorithm. Cities in green are a cluster that outperforms their peers, yellow represents the middle cluster, and red is a group that lags behind its peers on this indicator.

How does median earnings vary across Louisville?

Louisville’s median income varies greatly across the city. In the map to the left, areas with higher median earnings are displayed in purple, and areas with lower median wages are displayed in white.

Workers in eastern Louisville receive much higher earnings than residents in west and south Louisville. Residents in J-town have a median earning of $45,800, followed by residents of Northeast Louisville who receive a median earning of $43,400. Residents of the Algonquin-Park Hill-Park Duvalle neighborhood only receive a median earning of $16,500. Downtown and Old Louisville residents also show a lower median earning, of only $18,000.

Scroll over the map to see values for each census tract. Zoom in to see street names that form the boundaries of each tract.

Trends Over Time

Median earnings Louisville fell during the Great Recession and have since recovered. Earnings have increased steadily 2011.

Comparison Between the Most and Least Improved Cities

Louisville’s median earnings increased by $700 between 2000 and 2016, outperforming the average peer city where median earnings fell by $400 over the same time period. The most improved city, Knoxville, saw median earnings increase by $2,800, while Indianapolis has seen median earnings fall by $3,000.

Differences Based on Race

In Louisville and across peer cities, White residents continue to have higher median earnings than Black residents. White residents in Louisville earn around $12,000 more than Black residents. Median earnings for both White and Blacks linger below their respective peer city means.

Differences Based on Sex

Males earn more than females in Louisville and across peer cities. Both males and females in Louisville outperform their peer mean.

Median Earnings Gap

The gap in median earnings between White residents and Black residents is currently increasing. While the earnings gap in Louisville is smaller than the peer average, this is due to relatively lower wages for White Louisville residents, not relatively high wages for Black Louisville residents.

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Natural Breaks Algorithm

For each indicator, Greater Louisville Project assigns cities into one of three groups (high-performing, middle-of-the-pack, and low-performing) based on how they compare to other cities. The assignment is based on how cities naturally cluster on that indicator. Sometimes, the differences between cities are very small, and the difference between a city ranked 5th and 6th could simply be a matter of the sampling error that arises from using survey data. Thus, rather than always make a division that declares the top 5 to be the top tier, we use a natural breaks algorithm to look for a cluster of cities that is outperforming the rest, a cluster that is about average, and a cluster that is lagging. This clustering gives us a better indication of where Louisville is thriving and where Louisville has room to learn from cities that are doing better.

Z-Scores

Z-scores (or standardization) is a way to combine data with different units of measurement into a single index. The z-score is a measure of how far away a city (or census tract, etc.) is from the average city. In order to be comparable across different units of measurement, the z-score is the distance from the mean measured in standard deviations (e.g. if Louisville has a z-score of 1 it means Louisville is 1 standard deviation above the mean of its peer cities).

Data from the Robert Wood Johnson Foundation's County Health Rankings use z-scores and all z-scores are relative to the mean of Louisville's peer cities. (On the County Health Rankings site z-scores are relative to all the counties in each state - thus z-scores reported by GLP will be different, because we are using a different reference group). The Greater Louisville Project also uses z-scores in our multidimensional poverty index, which compares each census tract to the mean of all census tracts in Louisville.