Well-Paid Benefit Most As Economy Flourishes

Shauna Thompson works as a home health aide in Reston and spends her 30-minute lunch break with her 3-year-old son, Deshaun, at a nearby child-care center. Her average pay, depending on the client, is $10 to $15 an hour. (By Dayna Smith -- The Washington Post)

The Post's analysis does not give a full picture of how income is distributed in the region, but it does offer a rough idea of how the benefits of the region's economic expansion are being distributed -- and confirms a view already held by many people involved in hiring.

When companies ask HireStrategy Inc., a staffing firm in Reston, to help them find an employee for a clerical job handling invoices, HireStrategy can usually find a match within a few days, chief executive Paul Villella said. The would-be clerk generally cannot negotiate a higher salary because the firm knows it can find someone else. In contrast, filling higher-level jobs in finance, health care or engineering might take weeks, and those candidates can negotiate for raises of 20 percent or more over their old jobs.

"This is a divided labor market," said Jonas Prising, president of Manpower North America, a large staffing firm. "There's no talent shortage for people with low skills or no skills, but you do have a talent shortage for people with specific skills."

In the 1990s boom, Prising said, there was a shortage of low-skilled as well as high-skilled talent, sending wages up across the board.

What changed? Many new technologies and ways of operating -- often aimed at cutting labor costs -- were in their infancy in the late 1990s. Now they are maturing, tamping demand for low-skilled workers.

Some examples: The retail industry has shifted to big stores that require fewer cashiers (two-year wage gain nationwide: 2.1 percent) and stock clerks (2.7 percent) than the department stores and small shops they replace. Firms that once employed dozens of people handling payrolls now hand the work to huge companies that do nothing else and rely heavily on automation (payroll clerk wages: up 4.7 percent). And long-distance telephone costs have dropped so much that it is feasible for big companies to hire people in the rural United States or abroad -- far from corporate offices -- to take phone orders (order clerk wages: up 3.2 percent).

The banking industry offers a particular window on the changes. Banks in the Washington region are booming, with $28 billion more in assets in 2005 than they had in 2003, a 27 percent increase, according to data from bank regulators.

"We're adding locations, our competitors are adding locations, you have new entrants in the marketplace," said William Couper, president of Bank of America in the Washington area. "There's a real competition for qualified talent." As a result, the average salary of financial managers in the region rose 15.8 percent between 2003 and 2005, to $102,440.

It's a different story at the teller's window.

More people are banking on the Internet, by telephone or at teller machines. So while banks had 88 tellers per $1 billion in bank assets in the region in 2003, two years later they had 84, based on a comparison of data from bank regulators and the Labor Department. And in those two years, tellers' average salary rose only 4.6 percent, to $24,090.

When demand for even a few types of low-wage jobs goes soft, wages can be held down in all of them, economists say. That's because a worker qualified to be a retail clerk might just as well become a security guard or receptionist. That means, in effect, that all low-wage workers are competing with one another, a sharp contrast with more specialized jobs.

For that reason, Shauna Thompson may be able to blame the global trends hurting bank tellers for the scant pay increase she's gotten as a home health aide.