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Wages Barely Keep Up With Inflation

September 03, 2006|From the Associated Press

Wages for the vast majority of Californians have barely kept pace with the cost of living in the five years since the last recession, according to a new study.

The California Budget Project study tracked hourly wage increases, adjusted for inflation, across three earning categories: low, median and high. In 2005, hourly pay for the lowest earners was $10, median pay was $17, and high pay was $30.

From 2003 to 2005, workers in the low and median ranges saw little or no wage growth, while those at the high end of the wage scale saw increases of barely 1%, according to the study to be released today.

Pay raises slowed after jumping modestly from 2001 to 2003, when workers saw increases ranging as high as 4.5% for the lowest earners.

"There's troubling news for California's workers and their families," said Jean Ross, executive director of the Sacramento-based nonprofit policy research group that conducted the study.

"After a period of notable gains, we've seen wage growth for California workers slow to virtually nothing," Ross said.

Price increases for gasoline and other consumer goods put a dent in people's buying power.

Adjusted for inflation, wages for the state's biggest earners rose 20.3% between 1979 and 2005, while the lowest-paid workers saw wages fall 3.7% during that period, the study said.

Wages were defined as the hourly rate employees receive for working.

The study also found that median household income in California rose just 1.7% last year, to $51,755 from $50,868 in 2004.

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