October 11, 2011
Gap between highest and lowest wage earners now at 30-year high
RICHMOND, VA – The top 10 percent of wage earners now make at least 5.7 times more than Virginians in the bottom 10 percent. The wage gap between the highest and lowest paid workers in the state now stands at a 30-year, all-time high and is second only to New Jersey. In addition, in just the first year of the recovery, workers earning in the top 10 percent experienced more real wage growth than workers in the bottom 10 percent experienced across the past 30 years.
These are among the key findings in a new report published today by The Commonwealth Institute for Fiscal Analysis, a Richmond-based fiscal and economic policy think tank, analyzing wages and income among Virginia workers over the past 30 years.
“What our report shows is that the recession has not hit everyone equally. In fact, while many have been hit hard, certain sectors and certain high wage earners have done pretty well,” says Michael Cassidy, President of The Commonwealth Institute. “In the end, our analysis shows that the impact of the recession has been to exacerbate long-term trends in wages and income creating a situation that is unbalanced, unequal and which has undercut hard working middle- and low-wage earning Virginians.”
Among the report’s additional key findings:
- Median household income in Virginia held steady during the first year of the recovery at $60,674 in 2010.
- Median individual wages increased to $17.83 an hour in 2010 — roughly 11 percent above the national average and the eighth highest of any state.
- The uptick in median wages continues a trend that predates the recession. Since the start of the downturn in 2007, Virginia’s median wages have increased by about 5 percent in real terms. This is the fourth highest increase in the nation and compares to a national average of only about three-quarters of 1 percent.
- The recession resulted in more dramatic swings in wages for Virginia’s working men than for its working women. At the low end of the wage distribution, men have seen a greater share of their wages disappear, while among the top 80 percent, they have experienced larger gains.
- Virginia continues to reward college educated workers with substantially higher wages. In 2010, Virginia’s college-educated segment of the workforce earned nearly 12 percent more than the national average for college graduates.
- Since the start of the recession, workers with less than a college degree have experienced sharp declines in real wages, while the wages of those with a college degree have grown by 6.8 percent.
- Although real average weekly wages have been increasing across all industries in Virginia, employment levels have not. This has real implications for working Virginians. The state’s greatest job losses since the start of the recession have been concentrated in middle-wage industries such as Construction and Manufacturing.
“These imbalances represent major setbacks for large segments of working Virginia and create significant and growing distance between poverty and prosperity in the state,” says Cassidy. “The high concentration of job losses in mid-wage industries since the start of the recession presents real challenges for Virginia’s middle class workers and should be of top concern to policy makers as they work to expand this critical segment of Virginia’s economy.”