The State of Working Connecticut 2011: Wages, Job Sector Changes, and the Great Recession

Back • Publication Date: December 21st, 2011

Authors: Sarah Esty and Orlando Rodriguez, M.A.

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The overview of wage trends for Connecticut workers before, during, and after the economic recession finds wage gains for the highest-paid workers, along with stagnation or losses for many other workers.

Among the report's key findings:

  • In recent years, wage gains have largely gone to those who were already doing better than most workers, and wage gaps have worsened. The last five years (2006 to 2010) – including the Great Recession and its aftermath – have resulted in gains for those who were already doing better than most, but stagnation or decline for many of the rest. Wages rose most for the highest-paid workers (90th percentile wages grew an inflation-adjusted 14.4 percent), while the lowest-paid saw virtually no increases (the 10th percentile wage increased by only 1.3 percent). In 2010, women earned 76 percent of the median wages of men, somewhat worse than the 2007 gap of 79 percent and worse than the 2010 national gap (81 percent). Similarly, in 2010 blacks in Connecticut earned 67 percent of whites’ median wages as compared to 72 percent in 2007. Nationally, blacks earned 78 percent of whites' median wages.
  • While median wages have risen in the last few years, the change in this measure of average wages may simply be the result of higher unemployment at the lower end of the wage scale. Data suggest some positive overall trends — in particular the 10 percent rise in statewide median weekly wages from 2006 to 2010, and the 18 percent growth in median wages for Hispanics, which has reduced the Hispanic-white wage gap. However, these trends may be more of a statistical anomaly than evidence of widespread improvements in wages. The large rise in unemployment from 4.3 percent in 2006 to 9.2 percent in 2010, and even greater increase for Hispanics (8.2 percent to 17.7 percent), suggests that rising median wages could be due to job losses among low wage workers that artificially inflated the median, rather than broad wage increases.
  • Educational inequality is a key factor driving wage inequality. Workers with bachelor's degrees earned twice the median wage of those with less education, and saw an 8 percent increase in wages from 2006 to 2010, while those with only a high school diploma suffered a 5 percent reduction in wages over the same period. Forty percent of Connecticut’s whites have a bachelor's degree, compared to only 18 percent of blacks and 14 percent of Hispanics.
  • Wage levels and trends vary dramatically across the state. Average weekly wages in the Bridgeport-Stamford Labor Market Area (LMA) are more than twice those in the Willimantic-Danielson LMA ($1,532 versus $739).

In response to the findings Connecticut Voices called on state policymakers to strengthen the state's educational system and establish a comprehensive state economic strategy.