Median Annual Wages

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. The main metric for 21st-century workforce and talent is median wage. Louisville has a target goal of being in the top 50% of its peers in median wage.

Peer City Comparison

Louisville’s median wage of $31,202 ranks 7th 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 the median income vary across Louisville?

Louisville’s median wage varies greatly across the city. In the map to the left, areas with higher median wages are displayed in green, and areas with lower median wages are displayed in red.

Workers have higher earnings in eastern Louisville in communities such as Northeast Jefferson and Floyd’s Fork, where the highest median wage reaches $45,200. The median wage is lower in western and southern Louisville, where it is $14,600 per year in California.

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 annual wages in Louisville have increased over the past decade. Following the Great Recession, wages increased steadily from 2009 to 2015, interrupted only by a large jump in 2013 and a slight decline in 2014. This steady increase resulted in a 14% increase in wages for Louisville residents from 2009 to 2014 and pushed Louisville’s median wage above its peer cities’.

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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.