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November 26, 2013

In the Dark

The Great Recession and the continuing sluggishness of our recovery have wreaked havoc on wages in Virginia. But it turns out that lower-wage workers were getting hit way before the recession began. The recession just made it worse and dragged it out longer.

In 2012, hourly wages for workers at every wage level were below their historical peaks. In other words, when you adjust for inflation, low, middle, and high earners alike earned less per hour in 2012 than they had at some point in the past decade or so.

What varies, however, is how far wages have fallen and for how long.

Wages for all workers  in Virginia peaked somewhere between 2001 and 2010. For lower earners, those peaks occurred longer ago than for higher earners, whose wages peaked much more recently. That means lower wage workers were taking hits not just during the recession, but well before it began, while high wage workers saw their wages rise, even during the recession.


As a result, lower-wage workers are now even worse off relative to their higher-wage counterparts. For example, the bottom 10 percent of earners – who make up to $8.18 an hour – had wages in 2012 that were more than 10 percent below their 2004 peak. But the top 10 percent of earners – who make more than $47.97 an hour – were only 2 percent down from their peak, which they just hit in 2010.

This trend isn’t just playing out at the extremes. Wages in 2012 were at their lowest levels in over a decade for the bottom 40 percent of earners. But the top 60 percent of earners have made strong progress despite a few bad years.

Virginia’s economic outlook may be starting to brighten, but for workers at the bottom of the wage scale, it’s still pretty dark.

–Sara Okos, Policy Director

The Commonwealth Institute

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