WAGE growth in America has been measly for years, but since the recession one state has fared particularly badly: Delaware, an east-coast tax haven. From 2009 to 2014, it was the only state in which hourly and weekly earnings dropped in cash terms (see chart). At first glance, this is puzzling. Unemployment in Delaware, at 4.8%, is well below the national average; many would expect such a tight labour market to result in rising wages. Moreover, the state is famously kind to business. Thanks to benign company laws and low taxes, there are more businesses registered in Delaware than there are people. More than 50% of all publicly traded firms in America have chosen the state as their legal home. Last year roughly 170,000 business entities formed there, a new record. A quarter of Delawareans work in finance or business services, a higher proportion than in any other state. Such vocations typically pay well.

But dig deeper, and problems appear. In recent years Delaware’s business-services industry has not looked so hot. In company litigation, its courts have lost out to rivals, particularly federal ones. Excessive litigation encourages companies to move. And Wilmington, the largest city in the state, is losing its appeal as a place to do business because of its high crime rate. Downtown is eerily quiet, even on business days. At the heavily policed railway station, a helpful video shows what to do if an armed madman launches an attack.

All this has taken a toll. The number of full-blown public and private corporations registered in Delaware is 11% lower than it was in 2000. (The number of smaller outfits has shot up, but these generate less juicy work.) Small wonder, then, that over the same period employment in Delaware’s professional and business-services sector has dropped by a tenth. Wages in that industry have fallen for the past few years. They have also tumbled in the financial sector, which has struggled recently with low profits. Delaware’s moneymen are earning 25% less per hour than they did before the financial crisis.

Other parts of the economy are suffering, too. Delaware’s manufacturing sector is one. Two car plants, which once employed 10,000 workers between them, have gone: Chrysler’s in 2008 and General Motors’ in 2009. Since the recession ended, manufacturing jobs (which typically pay well) have continued to wither in the state, despite a nationwide recovery. Delaware’s industrial electricity prices, which are 25% higher than the American average, partly explain the lacklustre performance. John Stapleford of the Caesar Rodney Institute, a libertarian think-tank near Wilmington, laments the absence of a “right-to-work” law (which would prevent workers from being forced to join a union as a condition of employment). Without one, says Mr Stapleford, Delaware is an unattractive place to locate a factory: manufacturing jobs go elsewhere.

Delaware’s low-wage sectors, though, have bloomed. Since 2010 the state’s casinos have been allowed to host “table games”, such as blackjack. That, says George Sharpley of the Delaware Department of Labour, partly explains why employment in the leisure and hospitality sector has since grown by 7%.

Retirees are also playing a role, says Gus Faucher of PNC, a bank. Many move to Delaware for its low taxes on retirement income. From 2010 to 2013 the share of the state’s population over 65 grew by 7%, well above the American average, and Delaware is forecast to be one of the fastest-ageing states in the next few decades. Working for gamblers and pensioners pays poorly: hourly wages in leisure and hospitality are half the state average. To paraphrase the state song, some wonder if the sun really is shining over their beloved Delaware.