- The Washington Times - Monday, September 4, 2000

High employment rates, a more productive work force and an increase in the minimum wage have made paydays richer for workers in Virginia, a new study shows.
"Unemployment is really about as low as you can expect, so Virginia has really seen a hike in wages," said Jared Bernstein, a labor economist at the Economic Policy Institute and one of the authors of the study released today.
Low unemployment means that companies have to draw from a smaller pool of workers, which puts potential employees in a better bargaining position, Mr. Bernstein said.
In Virginia, unemployment for 1999 was 2.8 percent, compared with 4.2 percent nationally, according to "The State of Working America 2000-2001."
The median income for a family of four in Virginia increased to $60,860 in 1998 from $59,272 in 1989, the study shows. The U.S. median income for 1998 was $56,061, compared with $53,584 in 1989.
As overall quality of life has improved, Mr. Bernstein said, the gap between rich and poor in Virginia has widened, following the national trend.
In Virginia, the richest 20 percent of the population earned 10.7 times more than the poorest 20 percent in the second half of the 1990s. From 1978 to 1980, the richest earned only 7.4 times as much.
"I would say the best way to combat that is to make sure unemployment stays low, to raise the minimum wage and avoid tax cuts … that increase the income of the rich," Mr. Bernstein said.
The minimum wage in Virginia is $5.15 per hour, the same level as the federal minimum wage.
The study shows that the typical American family is working longer hours, has more debt and often does not have adequate employer health care and pension coverage.
While a booming stock market has helped the wealthy get wealthier, data on stock ownership show stocks provided little or no relief to the coffers of the majority of American households.
The report's key findings include:
1. Income inequality continued to grow in the late 1990s, but at a slower pace than earlier in the decade. From 1995-98, real incomes of low-income families grew 1.9 percent each year, trailing the growth rate for middle-income families (2.3 percent) and top income earners (3.2 percent).
2. In 1998, 62.9 percent of workers in the private sector had health insurance through their employers, slightly down from 63.1 percent in 1989. Fewer than half of workers in the private sector had pension plans through their employers.
3. Overall poverty rates fell more for blacks (3.2 percentage points) and Hispanics (4.7 percentage points) in the 1990s than for white people (0.7 percentage points). Still, the poverty rate remained higher for both minority groups.

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