Urban workers tend to earn significantly more than their rural counterparts — a gap that has widened in recent years.

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While location isn’t the only factor influencing wages, understanding the causes of the divide can help workers in lower-paying areas find ways to boost their income.

Here is what the urban vs. rural pay divide looks like in 2025.

While 2025 income data hasn’t been released yet, the most recent federal numbers show a stubborn divide.

In 2021, workers in large metro areas earned 24% more than those in smaller cities, 39% more than in micropolitan areas, and 51% more than workers in rural counties, according to the U.S. Department of Commerce.

Experts said that even in 2025, the pay gap between rural and urban areas isn’t just about geography; it’s structural, persistent, and deeply tied to how jobs, talent and industries cluster.

“Cities are magnets for highly educated and skilled workers, which attracts industries that pay top dollar,” said David Smith, an economics professor who specializes in labor markets at Pepperdine Graziadio Business School. “Rural areas, unfortunately, often see their brightest minds leave for those city opportunities, leaving behind a workforce that might be less specialized.”

Smith explained, “Cities benefit from what we call agglomeration economies. When businesses and people are clustered together, it sparks innovation and productivity, leading to higher wages. Rural areas just don’t have that same dynamic.”

Cities tend to offer higher salaries, but they also come with higher costs for housing, transportation, and basic goods. Employers in urban areas must compensate workers more to keep up with local expenses.

“Cost of living is a double-edged sword,” said Seann Malloy, Founder and Managing Partner at Malloy Law Offices. “Rural workers often may make less, but costs can be significantly lower, especially when it comes to housing, childcare and transportation. That being said, inflation has eroded this advantage in many areas.”

Experts said employers could lose employees if they continue to follow zip code-based compensation scales.

“Employers often cling to ‘location-based pay’ as a cost-containment tactic, which punishes rural or lower-cost-area workers for choosing lifestyle or caregiving over proximity to power centers,” said Patrice Williams-Lindo, CEO of Career Nomad

and a workforce futurist.