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Wages in Virginia Fell in 2011, Report Says

Median household income in 2011 was down 4.2 percent from 2007.

Virginia wages dropped last year to levels not seen since 2007, before the nation’s economic downturn, according to a new study.

The Commonwealth Institute reports that Virginia’s median hourly wage fell from just under $18.50 in 2010 to $17.64 in 2011, a 4 percent decrease – the largest single year decline in the past decade.

Median household income was also down considerably. In 2011 the median income was $61,882, a 4.2 decrease from the pre-recession peak of $64,628 in 2007.

Wage cuts were felt across all income levels in 2011, according to the report. But the Commonwealth’s top 10 percent of earners were hit the hardest, seeing a decline in wages of about 4.4 percent. Wages only fell 2.5 percent nationally.

Stephen Fuller, an economist at George Mason University, said some of these changes could be attributed to a high volume of new hires for positions at the lower end of the pay scale, or “income dilution.”

“More of the new jobs have lower salaries than in the past,” he told Patch. “So the recovery in Virginia and elsewhere around the country has been driven by jobs that aren’t high-end jobs.”

The slow decline in the size of the federal workforce and high volume of retirees also contributed to the dilution, he said.

 “The fact that the federal government is cutting back and the private sector is watching its pennies, and because of the uncertainty of what will happen with the fiscal cliff and federal spending more broadly, means that the pay scale is going to be pretty tight for a few years,” Fuller said.

Fuller didn’t think the numbers were as dire as the report seemed. Some are taking cuts, he said, but others aren’t.

“You look at those numbers and say ‘Everybody’s taking a cutback,’ but we’re talking about different people and it’s just that we have more young people coming in large numbers and working,” he said.

Northern Virginia had the highest 2011 average weekly wages of any other area in the Commonwealth. At $1,285, it was more than the statewide average weekly wage of $974.

And despite the wage decreases, Virginia has the 8th highest median household income and the 12th highest median hourly wage in the nation.

“We’re just not going to be quite as well-off as we used to be, but we’re still going to be pretty good,” Fuller said.

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