Report: Virginia workers see wages drop

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Photo - Construction workers in Tysons Corner (Examiner file photo)
Construction workers in Tysons Corner (Examiner file photo)
Local,Business,Virginia,Taylor Holland

Working Virginians were spared the worst of the Great Recession, enjoying an unemployment rate consistently below the national average. But Virginians didn't escape unscathed: A new study shows that wages across the state have dropped to levels not seen since before the downturn.

Median hourly wages in Virginia fell from $18.38 in 2010 to $17.64 in 2011, the largest single-year drop over the past decade, the nonpartisan Commonwealth Institute found. It was the first time wages fell since the recession began in 2007.

Median household income was also down last year, the report found, falling roughly 4.2 percent from its pre-recession peak of $64,628 in 2007 to the current $61,882.

The drop in wages hit workers at every income level in 2011, with higher-wage workers taking the biggest hit. The top 10 percent of earners saw their wages drop 4.4 percent last year, far more than the national average drop of 2.5 percent, the report found.

Rebecca Tippett, of the Weldon Cooper Center for Public Service at the University of Virginia, said the drop was not unexpected.

"We're coming out of a very long, protracted economic downturn," Tippett said. "Many Virginians have been struggling for a long time, and likely will continue to struggle. Because of that, a full recovery takes longer to show up in data."

A spike in poverty and unemployment immediately following the end of recessions often accounts for the drop in wages, she said, because businesses and employees don't start hiring and buying right away.

"It takes awhile for consumers to start spending money," she said. "Similarly, it takes a while for businesses to start hiring again and for developers to start building new businesses."

Wages are highest -- and rising -- in Northern Virginia, where the average worker now makes $1,285 a week, the report found.

But employees in Richmond, Danville and the Blacksburg area saw some of the sharpest drops. Danville-area workers brought home an average of $610 a week, the lowest in the state, the report found.

Nicolaus Tideman, a professor of economics at Virginia Tech, said the drop in Virginia wages can be attributed to federal spending reductions and a loss of manufacturing and construction businesses.

Despite the drop in wages, Virginia still ranks in the top 12 in median household income and median wages. It also achieved the smallest average wage gap between men and women in the past 30 years. Virginia women earned roughly 85 cents for every dollar earned by men, the report found.

"This report demonstrates that this continues to be a very tough economy," said Tucker Martin, spokesman for Gov. Bob McDonnell, noting McDonnell's commitment to private-sector job creation. "There is still much work to do. Americans are hurting, and this report is just another indicator of how tough this recession has been."

tholland@washingtonexaminer.com

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