The income gap between high-wage and low-wage workers in Virginia has widened during the economic slowdown and is now at a 30-year high, according to a report released Tuesday.
In 2010, the top 10 percent of wage earners in Virginia earned almost six times more than the bottom 10 percent of wage earners, according to the report by the Commonwealth Institute for Fiscal Analysis, a Richmond-based think tank.
The institute, which focuses on economic issues affecting low- and moderate-income people, examined recent data from the U.S. census for its report.
It concludes that while wage earners in Virginia have fared better than similar workers in most other states, the fragile economic recovery has exacerbated a long-term trend of widening income inequality.
"High-wage earners have made wage gains despite the recession, and low-wage earners have been hit hard," said Michael Cassidy, president of the institute.
On the positive side, Virginia's median household income in 2010 of about $60,674 was the ninth highest in the nation. The median wage in Virginia was $17.83 per hour last year, 11 percent above the national average and the eighth highest in the country, according to the report.
Since the start of the economic downturn in 2007, wages have increased about 5 percent. Yet much of that gain went to wage earners in high-tech and professional jobs, especially in Northern Virginia.
The top 10 percent of wage earners in Virginia saw their pay grow more than 10 percent on average from 2007 to 2010, three times the average increase nationally.
Yet workers in the bottom 20 percent saw a 4.3 percent decline in wages. That was more than five times the decline experienced by the same group nationally, according to the report.
That puts Virginia second only to New Jersey in the largest gap between high-wage and low-wage earners, according to the report.
A combination of trends has led to the widening gap, including major job losses in some industries, the report says.
The state has seen job growth since the recession in some high-wage sectors such as professional, business and technical services, as well as growth in some middle-wage sectors such as educational services.
"But we have seen declines in a lot of the middle-wage sectors like construction and manufacturing," Cassidy said. Construction, for example, pays average weekly wages of $994, but total employment in the sector declined by more than 54,400 jobs since the recession.
Across all industries, the average weekly wage at the end of 2010 was $1,029, the report says. Weekly wages varied from $1,956 in the highest-paid industry category — professional, technical and scientific services — to $333 in the lowest-wage industry category, accommodation and food service.
Education also is a key factor in the wage gap, the report says.
In 2010, college graduates in Virginia earned a real median wage of about $27.79 per hour, more than two times the real median hourly wage of $13.27 among Virginians with a high school education.
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