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November 1, 2013

Dude, where’s my pay?!

Over the past decade (2002-2012), Virginians had their noses to the grindstone, making goods and delivering services at such a strong pace that worker productivity increased by a whopping 10.4 percent. This was the 12th largest increase of any state and compares to a national average of about 6.8 percent. In short, Virginians are working harder than ever.

But you wouldn’t know it from their wages.

Over this same period, typical workers in Virginia saw no real gains in their hourly wages. Despite the big increase in output, workers are pretty much stuck where they were a decade ago.


It hasn’t always been this way. From the end of WWII through the 1970s, productivity and pay increased in tandem, and at about the same rate. As the greatest generation helped the nation’s economy become more productive, the typical worker was rewarded with higher pay.

But more recent trends show the connection between productivity and compensation unraveling to the point where today’s worker isn’t sharing in the increasing (and increasingly unequal) prosperity.

Rising productivity means Virginia’s economy is growing. That’s good. The challenge is to make sure that those who make it grow are rewarded for their work.

–Sara Okos, Policy Director

The Commonwealth Institute

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