Stephen Fuller has been telling us for a while that the labor markets in the District and the metropolitan area have not fully recovered from the great recession. Is our labor market changing? The data from the labor department (collected with the help of our own Department of Employment Services), say yes.
- Total wage growth in the District has fallen behind the nation. Total wages earned in the District (residents and nonresidents combined) held steady between 2013 and 2014, whereas total wages earned across the nation increased by 4 percent.
- The main cause of this change appears to be the decline in average wages. The District has the highest average weekly wage among all states–our workers on average earn $1,569 a week compared to the national average of $940–but the the growth in average wages has been sluggish since 2011. Preliminary estimates show that the average weekly wages declined between the second quarter of 2013 and second quarter of 2014.
- The average weekly wage is declining because a larger share of the people who work in the District have shifted to the private sector where wages are lower. In 2014, the number of employees hired by the federal government was only 2 percent above the level ten years ago—the levels are 192,650 back in 2004 versus 197,000 today. In contrast, the private sector employs nearly 70,000 more people today compared to ten years ago, when private employment was around 429,000.
- Those who shift to the private sector, on average, earn $500 less per week. In the second quarter of 2014, average weekly wages paid by the federal government was $1,938 and that in the private sector was $1,432. In fact since 2004, the private wages have grown slower than federal wages, and now stand at about 73 percent of federal level compared to 77 percent in 2004.