Connecticut s income gap stood at 14.2 in 1994-96. Wages and salaries have grown modestly, while income from capital has risen dramatically. When there are a shrinking number of jobs with high wages and a growing number with low wages, earnings inequality must rise. Average wages will fall, furthermore, unless the dwindling number of wage raises is steep enough to outweigh the growing number of wage cuts. In fact, these two effects have almost canceled out, leaving average wages to grow only slightly.
Regional economies tend to specialize in things for which they have abundant inputs.
This bids up the wages for skilled labor, and bids down the wages of the less skilled. But if rising inequality is driven by the demand for educated workers, then a better long-term balance will only be created by a more educated workforce. This would be doubly good for Connecticut, since it would decrease inequality and make the state more attractive to investors. This will create a growing political demand for projects that can demonstrate educational success.