Low-wage workers' incomes said to lag

from the Richmond Times Dispatch

Study: Growth has helped top earners the most

By GREG EDWARDS
TIMES-DISPATCH STAFF WRITER

The highest paid Virginians earned $10.58 more an hour in 2006 than in 1979.

The lowest paid made a dime more an hour than they did in 1979.

The Commonwealth Institute, a research organization created by Virginia social-services groups, says the well-publicized growth in the state's economy since the 1990s has failed to benefit lower wage earners.

When 20 percent of workers in Virginia earn wages that place them below the poverty line, the state has significant challenges ahead, said Michael Cassidy, the institute's executive director.

Virginia's economic successes have been well publicized. CNBC, the business news network, and Forbes magazine have ranked Virginia as the best state for business. The state has a diverse business mix and its jobless rate consistently falls below the national average.

Cassidy acknowledges that the state's economy has shown robust growth in recent years. But he says his organization's study goes behind the headlines to look at how workers are far ing in the globalized, 21st-century economy.

"In particular," Cassidy said, "despite growing worker productivity in Virginia, we have seen declining median wages in recent years, which means workers are not being rewarded for the work . . . which has led to growth in our economy."

Others would argue that many workers on the low end of the scale are in entry-level jobs and have moved on or will later find better-paying work. Some people in government say a key for advancement is education.

The Commonwealth Institute does fiscal analysis aimed at influencing public-policy decisions. It was conceived in 2004 by the Virginia Interfaith Center for Public Policy, the Virginia Organizing Project, the Virginia Poverty Law Center and other organizations and individuals.

Among the findings of the institute's study, "A Growing Divide: The State of Working Virginia," were that between 1979 and 2006 wages have grown for all Virginians but not as much for some as others.

Over the period, Cassidy found that wages of the top 10 percent grew 28 times the rate of the bottom tenth.

In 1979, the lowest paid 10 percent of Virginians made $7.54 an hour. In 2006, they earned $7.64. That compares with the top 10 percent, which made $27.78 in 1979 and $38.36 in 2006. The figures are not adjusted for inflation.

James Ceaser, a professor of politics at the University of Virginia, says the numbers can mean different things for workers, depending on their individual circumstances.

A worker who has been locked into the same low-skill job over several years has not done as well as others in the growing economy, Ceaser said.

"It doesn't strike me as all that shocking that . . . [pay for] unskilled labor is not going up as fast as for others," Ceaser said.

For teenagers, as an example, the low-paying job may be a first step into the labor market. And for immigrants, legal or illegal, the job might be an improvement from what they left behind, he said.

Education played a big role in the disparate rates of wage growth, the study found. The median wage for workers with less than a high school education grew by 1.52 percent between 1979 and 2006; for those with a high school degree, the median grew 3.1 percent; and the median wage for those with a bachelor's degree or higher climbed 28.5 percent.

Gloria Glenn of Chesterfield County falls in the lower half of the wage scale, making around $12 an hour. Glenn, 52, is a cancer survivor and former factory worker and state correctional officer who works part time as a transportation officer at the women's diversion center at Chesterfield Courthouse.

"It's almost like I am working to pay my medical expenses and I am working to purchase my meds," said Glenn whose job does not include health benefits. When the flu turned to bronchitis this spring, Glenn's doctor prescribed a $260 inhaler, which she paid for out of pocket.

She leans on her two children and three grandchildren to help pay the bills and on her faith in God, who, she says, "will take care of everything" to rid her of worry.

Glenn attends Virginia State University part time. She hopes to land a job in medical social work after she graduates in 2010. Medical social workers earn an average $21.24 an hour, near the state average hourly wage of $21.43.

Virginia Secretary of Commerce and Trade Pat Gottschalk said education and retraining, such as Glenn is pursuing, will help raise the income levels of all Virginians, particularly those in parts of the state facing economic challenges such as the Southwest and Southside.

"We think we've done a pretty decent job of trying to bring in advanced manufacturing jobs and even technology jobs to some extent to replace furniture and textile jobs [that have been lost]," Gottschalk said.

"But that's not the end of the story," he added. Once you bring in as many jobs as you can, you have to provide the educated and skilled workers that employers want.

"The more you're meeting demands of employers the more they come," he said.

Worker training is under way across the state. Some efforts are partially financed with federal grants.

"I think . . . the additional training and education is one of the solutions to a low wage problem," the secretary said. "The more skills you have and the more education you have the more you can increase your wage."