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Wednesday, February 9, 2005

Low-wage workers see fewer gains in pay raises

By PAUL NYHAN
SEATTLE POST-INTELLIGENCER REPORTER

Seattle was a great place to work during the booming late 1990s, as low-wage workers got a modest raise -- their first real pay increase of the decade.

  SPECIAL REPORT
 
· Hard work, hard times: The plight of Puget Sound's working poor

But those at the top got far more.

Workers at all pay grades enjoyed some of the strongest job growth in 40 years as statewide unemployment rates slipped below 5 percent. Companies simply couldn't find enough workers, and that meant higher wages.

During those exuberant economic times, the gap between those who earned the most and those who earned the least around Washington grew considerably, state figures show.

From 1990 to 2002, the lowest-paid 10 percent of the work force saw their hourly wages rise 18 percent. Those workers didn't see their wages truly begin to rise until around 1997, when the economy picked up.

Over the same period, the highest-paid 10 percent enjoyed a bigger bump: a 49 percent raise. (All wages have been adjusted for inflation.)

The disparity is perhaps more obvious in our federal tax brackets.

In 1992, Washington was home to only 19,500 individuals and families making $200,000 or more in income, according to Internal Revenue Service data. Combined, those making less than $30,000 a year reported billions of dollars more in income than all those at the top.

Ten years later, the population in the $200,000-and-above bracket swelled to 51,000 and made $10 billion more in income than all 1.3 million taxpayers in the lowest two brackets.

These days, the local economy is growing again, but economists are not predicting a return of the boom years any time soon. That means wages for the lowest-paid workers likely will barely keep up with inflation over the next few years, said Scott Bailey, a state economist and author of the Washington Wage Report.

There will be "plenty of folks chasing not that many jobs," he said.

P-I reporter Paul Nyhan can be reached at 206-448-8145 or paulnyhan@seattlepi.com
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