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Gap between Virginia’s top and bottom earners increases

- The Washington Times - Tuesday, October 11, 2011

RICHMOND — The gap between the top 10 percent of earners and the bottom 10 percent in Virginia is the highest it's been in 30 years and ranks second only behind New Jersey, a report released Tuesday says.

The top 10 percent of earners made at least 5.7 times what the bottom 10 percent earned in Virginia last year, according to the report from the Commonwealth Institute for Fiscal Analysis, a left-leaning think tank based in Richmond.

"High earners have made wage gains despite the [recession]," said the group's president, Michael Cassidy.

Virginia, which was ranked third last year behind New Jersey and the District, leapfrogged the District, which ranked fourth, with a ratio of 5.35. Nearby Maryland was sixth, at 5.21.

The growth in the gap continues a trend that's been seen for the last 30 years, the report said. Between 1980 and 2010, real wages of the top 10 percent of workers in the state jumped by more than 50 percent, while wages for the bottom 10 percent increased just 5 percent.

"When you look at the northern part of the state, that's where all the information sciences are, the defense contractors are," said Daraius Irani, associate vice president of the Division of Economic and Community Outreach at Towson University. "If you look at the southeastern/southwestern corners of Virginia, that's where the problems are. Northern Virginia is, in itself, a state, to some degree."

With its concentration of high-paying technology and federal government jobs, Northern Virginia, had the highest average weekly wage last year at $1,264, compared with a low of $611 in Danville, Va. Median individual wages increased to $17.83 an hour in 2010 — about 11 percent above the national average and the eighth highest of any state, the report said.

And the state actually is adding high-wage jobs. The sector that includes professional, scientific and technical services is Virginia's highest-paying industry, with an average weekly pay of $1,956. That sector has also added the second highest number of net new jobs since the start of the recession — 24,095, or 6.68 percent, over pre-recession employment levels, the report said.

But accompanying that growth are job losses since the start of the economic downturn concentrated in middle-wage industries, such as construction and manufacturing, the report said. Total employment in construction declined by more than 54,400 jobs since the start of the recession, for example.

"The 2000s were a 'lost decade' for Virginia's workers," Mr. Cassidy said.

College graduates also had a significant advantage over those with less education in the state. The real median hourly wages for non-college graduates dropped between 2007 and 2010, while the wages for those achieving a bachelor's degree or higher jumped more than 6 percent.

"Individuals without college or high school diplomas are always going to be suffering, and unfortunately, this recession has exacerbated that fact," Mr. Irani said.

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