The Urban vs. Rural Pay Divide — How Workers Can Earn More in 2025

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

Contents

The Pay Gap Persists Cost of Living Drives Wage Differences Job Concentration in High-Paying Sectors Access to Education and Training Earning More in a Low-Pay Area Remote Work Narrows the Gap

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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.

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The Pay Gap Persists

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.”

Cost of Living Drives Wage Differences

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.

Williams-Lindo added, “It’s not a pay-for-skill model; it’s a pay-for-zip-code model. And that reinforces structural inequities.”

Job Concentration in High-Paying Sectors

Urban economies often cluster around industries such as technology, finance, and professional services, fields known for their higher salaries. According to the USDA, rural areas are more reliant on agriculture, retail, manufacturing, and public-sector roles, which traditionally pay less.

“Tech, finance, and knowledge work still carry the widest gaps,” Williams-Lindo said. “A UX designer in a major city can earn $30-50K more than their rural counterpart with the same deliverables, just because of where they log in from.”

Williams-Lindo explained, “Even within education, nonprofit, or healthcare-adjacent sectors, rural workers face salary ceilings that don’t reflect the value of their labor, especially when remote work blurs geographic lines.”

Access to Education and Training

Cities usually offer more opportunities for higher education and skills-based training. In contrast, rural residents may face geographic, financial, or digital barriers to accessing career-advancing resources. according to Best Colleges.

“Things like access to capital, good infrastructure (like high-speed internet), and competitive job markets are often stronger in cities,” Smith said. “All of these factors combined mean that the urban-rural pay gap, unfortunately, persists.”

Earning More in a Low-Pay Area

Even in a lower-wage region, workers can increase their earning power. Experts recommended upskilling through online certifications, pursuing remote-friendly careers, negotiating for raises, and leveraging local cost-of-living advantages to save and invest more strategically.

“Certifications such as CompTIA, AWS, or Google’s data analytics certification can also assist rural workers in breaking into better-paying remote positions,” Malloy said. “I would also say that using digital platforms like Upwork or Toptal enables rural professionals to compete in national or even global marketplaces.”

Malloy added, “Negotiating pay for skills and results instead of a zip code is a strategy that I’ve seen work for clients in HR contract roles and legal consulting.”

Remote Work Narrows the Gap

The rise of remote and hybrid work means rural workers may increasingly tap into urban pay without relocating. However, doing so often requires skilled career moves to compete in a national labor market.

“Rebranding is key,” Williams-Lindo said. “Workers need to reframe their narrative from ‘rural employee’ to ‘remote expert’ or ‘independent strategist.’ Build visibility on platforms like LinkedIn, speak at industry events, even virtually, and quantify your wins in universal language (ROI, impact, reach).”

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