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Lowest-Paid Falling Behind

Workers At Bottom Of Scale Aren't Sharing In State's Economic Growth, Report Says

By JANICE PODSADA, Courant Staff Writer

September 02, 2007

Although Connecticut has regained the jobs it lost in the last recession, the state's low-wage workers have not shared in its renewed economic growth, according to the annual Labor Day report issued by Connecticut Voices for Children.

"Low-wage workers are the last ones to reap the gains when the economy turns around," said Doug Hall, associate research director of the advocacy group, which promotes the well-being of the state's children and families.

Since 2001, the state's low-wage workers - those earning about $8 to $10 an hour - had the largest real wage decrease in the nation, according to the 2007 State of Working Connecticut report, which the group has issued annually since 2001.

Last year, nearly 17 percent of the state's workers earned $9.91 an hour or less. Working full time, year-round for that amount would leave a family of four at the federal poverty level ($20,615 a year for a family of four in 2006).

"Connecticut's economy may be growing - in its size, productivity and profits - but it's sure not doing much to help Connecticut's families," said Shelley Geballe, president of Connecticut Voices for Children.

Low-wage workers aren't the only ones losing ground. The state's wage earners - low, median and high - earned less in real dollars in 2006 than in 2002, the report said.

Real wages for workers in every category are either flat or have declined, the report said. In real wages, someone who earned $18.36 an hour in 2001 earned $17.75 an hour last year, the report said.

"Health care costs are consuming a larger proportion of total compensation," said Hall, citing one reason for stagnant or declining wages. "There seems to be a disconnect between an economy that's doing well and the wages people are being paid."

It's a national trend, according to a study issued last week by the Economic Policy Institute.

"Most American workers have not shared in the growth and prosperity they have been helping to create," the institute's study said. "While productivity is up nearly 20 percent since 2000, the real median hourly wage is up 3 percent overall."

In July, the state's overall unemployment rate was 4.8 percent, but it was much higher for some minority groups - about 8 percent - and in some cities. In Hartford, the unemployment rate was 9 percent; in New Haven it was 7.7 percent; and in New Britain, it was 7.6 percent, according to the Connecticut Voices for Children report.

Educational attainment is the strongest predictor of income, the report said. The state's labor force is one of the most highly educated in the nation. Almost 37 percent of workers hold a bachelor's degree or higher, 26 percent have some college education and only 10 percent have less than a high school education.

High school dropouts face the greatest challenge in finding steady employment, the report said.

College graduates with a bachelor's degree or higher have a median wage of $26.39 an hour, compared with the $9.79 median hourly wage that workers lacking a high school diploma earn.

The group is urging the state's policy-makers to strive for more higher-wage jobs, provide more child care and housing subsidies for low-wage families and invest more in education.

"All people, all kids, need to get a solid start in education, regardless of race, ethnicity or where they live," Hall said.