Hourly workers earning less now than before recession, report says

Despite gains in the economy, hourly workers in California earned significantly less in 2013 than they did when the Great Recession began, a report says.

That is especially true for Californians in low-wage positions who earn in the bottom 20th percentile, according to a California Budget Project report released Thursday. These workers saw earnings plunge 5.4% to an average of $10.90 an hour, down from an inflation-adjusted prerecession level of $11.52.

The low-wage Californians “had the steepest drop in earnings in 2013 relative to their value in 2006, the year before the recession began,” the report said.

Middle-wage workers in California did not fare much better. Last year, they earned an average of $19.10 an hour, which was 5.1% below the $20.12 they earned before the recession, when adjusted for inflation. Higher income workers only suffered a 0.6% drop to $35.23.

The California Budget Project is an organization that advocates for low- and middle-income families.

The slow economic recovery is partly to blame for the slow wage growth, the report said. But the erosion in earnings also reflects a decades-long trend of widening inequality between workers who pull in the big bucks and everyone else.

The boom times of the 1990s helped narrow the divide. But “further wage stagnation beginning in the early 2000s erased the gains made by low- and mid-wage workers in the late 1990s,” the report said. “By 2013, these workers earned less than similar workers earned in 1979, after adjusting for inflation.”

In 2013, high-wage Californians pulled in $3.23 for every dollar earned by low-wage workers. In 1979, that ratio was $2.42 to $1, the report said.