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Study suggest Pennsylvania workers wages stagnate since 2000

09.18.12

SEPTEMBER 2012 Scranton/Wilkes-Barre/Hazleton edition of The Union News

Study suggest Pennsylvania workers wages stagnate since 2000

BY PAUL LEESON
THEUNIONNEWSSWB@AOL.COM

REGION, August 29th- According to a new study by the Keystone Research Center, a left-leaning economic research group in Harrisburg, most middle-class Pennsylvania families have seen their wages and income stagnate since 2000 even though productively in the economy has grown.

The study suggest growth in the size of the overall economic pie could have supported rising living standards for all Pennsylvania workers, but an outsized share of the benefits went to the top one percent of earners, preventing board-based prosperity and slowing down the economic recovery.

“Policymakers are hitting the economic brakes when they should be hitting the accelerator. Policymakers are also tilting the rewards of economic growth to the top. Fix those problems and we can have broadly shared prosperity again,” stated Stephen Herzenberg, an economist and executive director of the Keystone Research Center.

Neithter the “lost decade” for working families since 2000 nor a recent increase in unemployment and the shortage of jobs in Pennsylvania occurred by accident, Mr. Herzenberg added.

The report concludes they were the result of poor policy choices that have been unfriendly to working families.

The organization’s annual report on the Pennsylvania economy had little good news for most workers, following a decade in which most workers experienced stagnant or falling wages and a recession that made family-sustaining job opportunities harder to come by.

For a four-person family, median income grew nearly twice as fast in the 1990s as it did in the 1980s, but it actually declined by $6,136 over the course of the decade, going from $82,818 in 2000 to $76,682 in 2010.

The decline occurred despite growth in the Pennsylvania economy because the benefits of growth went disproportionately to the top one precent of earners. The one percent captured more than half of all income growth in the state between 2002 and 2007.

The report suggests with economic forecasters predicting continued high unemployment in the nation and the state, workers face the danger of another decade of poor income. That would continue to claw back the wage gains of the second half of the 1990s, the only period of broad-based wage growth in the past 33 years.

Pennsylvania enjoyed a job advantage over most states coming out of the recession in 2010, but that advantage has slipped, Mr. Herzenberg stated. Budget cuts cost 25,000 teachers, first responders and other public servants their jobs in 2011, contributing to the state’s fall from top 10 to 38th in state job-growth rankings, the report added.

“In the end, its about values. What kind of Pennsylvania do you want. We want one with widespread opportunity, improved living standards across the board, and a democracy responsive to the middle class and what benefits all Pennsylvanians,” stated Mr. Herzenberg.

The data released with the Keystone Research Center report added;

• In the 1990s, Pennsylvania experienced the strongest job growth it has seen since the 1960s.

• Pennsylvania’s jobs deficit, the difference between the number of jobs the state has and the number it needs to regain its pre-recession employment rate, stood at 301,300 in July and is 74,000 jobs higher now than a year ago.

• Despite being better educated and more productive, the typical worker in Pennsylvania in 2001 earned $16.43 per hour, only 63 cents more than in 1979.

• During the short economic expension from 2002 to 2007, the top one percent in Pennsylvania captured 54 percent of all income growth. Average incomes grew by 15.4 percent, the top one percent grew by 50 percent.

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