January 23, 2013

‘Lost decade’ for state’s working families

If  members of Pennsylvania’s middle class feel like they are working harder than ever, but not seeing it show up in their paychecks, it’s because that is exactly what’s happening.

"The State of Working Pennsylvania 2012," a report by the Keystone Research Center, shows that from 2000 to 2010, worker productivity increased 30 percent, while the median income of a four-person household declined by more than $6,000.

The report notes that despite the Great Recession, Pennsylvania’s economy has grown enough to support a rise in middle-class living standards. However, the top 1 percent of wage earners received more than half of the larger economic pie.

Stephen Herzenberg, executive director of the center, a Harrisburg-based independent research firm, calls it “the lost decade’’ for Pennsylvania’s working families.

Highlights of the report include:

  • The decade of 2000 to 2010 was the only one in the last seven with negative job growth
  • The median four-person family income declined from $82,818 in 2000 to $76,682 in 2010
  • Despite being better educated and more productive, the typical worker in 2001 earned only $16.43 (in 2011 dollars), or 63 cents more than in 1979
  • During the economic expansion from 2002 to 2007, the top 1 percent of Pennsylvania taxpayers (62,000 people) captured 54 percent of all income growth
  • For the roughly 620 people in the top 0.01 percent of taxpayers, their average incomes grew by $1.7 million in 2010 to $18,480,207.

Herzenberg, who co-authored the report with labor economist Mark Price, said the reasons for middle-class wage stagnation, as well as the high unemployment rate, are bad economic policies.

“Policymakers are hitting the economic brakes when they should be hitting the accelerator,’’ he said. “Policymakers are also tilting the rewards of economic growth to the top."

In other words, as the report states, economic policies are benefitting the affluent and are “unfriendly to working families."

The report notes that in 2010, Pennsylvania enjoyed a jobs advantage over most other states coming out of the recession.

“But that advantage slipped," the report states. “Budget cuts cost 25,000 teachers, first responders, and public servants, and other public servants their jobs in 2011."

Unfortunately, Price said, economic forecasters are projecting high unemployment well into the future. And that, he noted, threatens middle-class wages even more.

The report recommends an “Investment in the Future" plan that bolsters Pennsylvania’s infrastructure, manufacturing sector, education, jobs skills, and scientific research “in a way that grows jobs in the short run, and lays the foundation for long-range growth."

Herzenberg said that in the end, it’s about values and economic fairness.

“What kind of Pennsylvania do you want?" he asked. “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. We think that’s what most other Pennsylvanians want."





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