Wages up, but job losses skew local data

At first glance, a 6 percent jump in the average hourly wage for Hampton Roads workers would seem to be great news. It compares with an anemic 1.8 percent increase in the average hourly wage nationwide.

In its latest National Compensation Survey, the federal Bureau of Labor Statistics reported that the average for Hampton Roads climbed to $17.96 an hour last year from $16.94 in 2008.

The increase was skewed, however, by heavy job losses in the region and negligible hiring by employers, said economists with the Hampton Roads Planning District Commission.

When the Bureau of Labor Statistics conducted its survey in July, the number of payroll jobs in Hampton Roads had fallen by 34,700 since the 2008 survey, the economists noted in the commission's Hampton Roads Economic Quarterly.

Most workers who lost jobs were those most recently hired, and they tended to be nearer the low end of the wage scale, the economists said. Meanwhile, companies have used the recession to cull their least productive workers, further skewing the hourly pay averages.

"Unfortunately, rising wages are an additional signal of weakness in the economy rather than an indicator of imminent recovery," the economists said in the spring issue of the economic quarterly.

Data from the bureau's National Compensation Survey is often used by businesses for establishing pay plans and deciding where to locate plants.

Hampton Roads workers in the natural resources, construction and maintenance sectors were paid an average of $17.12 an hour last year - a 6.3 percent increase from the $16.11 average in 2008, according to the survey.

However, the average hourly wage of $10.62 for service workers barely budged from $10.57 one year earlier, the survey found.

For part-time workers in Hampton Roads, the average fell to $10 a hour from $10.17 in 2008.

The hourly wage figures do not include paid leave, health insurance or other employee benefits.

Separately, economists at the planning district commission reiterated that a full recovery for the Hampton Roads economy is likely to be sluggish. Although the region's jobless rate remains well below the nationwide rate, "it will take Hampton Roads a long time to recover the 36,500 jobs lost since the beginning of the recession," they said.

Two traditional engines of growth after a recession - retail sales and home building - remain weak. The pace of home building, the economists said, will be restrained by expiration of a federal tax credit for first-time home buyers on April 30 and the end of a Federal Reserve program on March 31 that helped keep residential mortgage rates low through the purchase of mortgage-backed securities.

Tom Shean, (757) 446-2379, tom.shean@pilotonline.com