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Hourly workers earning less now than before recession, report says

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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.

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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.

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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.

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