Annual “State of Working Pennsylvania” Report Finds Strong Labor Market and Workers Poised for More Wage Gains

Stephen Herzenberg, Claire Kovach, and Maisum Murtaza |

Annual “State of Working Pennsylvania” Report Finds Strong Labor Market and Workers Poised for More Wage Gains

HARRISBURG – The Keystone Research Center (KRC) today released its annual “State of Working Pennsylvania” report, finding that  the labor market remains tight, with fewer unemployed Pennsylvanians than job openings. Even while inflation was high, workers’ earnings kept pace. With  inflation now back down near 3%, workers can look forward to real wage increases. 

Longer-term prospects for workers are less clear, with income inequality reaching an all-time high in the pandemic. To achieve sustained shared prosperity, Pennsylvania requires bold policies that strengthen unions, directly raise wages, and boost workers’ skills and career advancement opportunities.

“Ahead of Labor Day, the data in this year’s report make clear that when the government makes smart investments in workers, as the federal government did in the pandemic, government can play a vital role in lifting wages and expanding opportunity,” said Keystone Research Center Executive Director and report co-author Stephen Herzenberg. “While the labor market is good at the moment for many Pennsylvanians seeking work, we still lag behind our neighboring states on the minimum wage, and  inequality has never been higher. To convince workers that the system is not rigged against them, Pennsylvania state and policy makers need to champion ambitious worker-friendly public policies.”

The report highlights several key points:

  • A tight labor market has given workers more leverage than in decades past.
    • The unemployment rate in Pennsylvania fell to 3.6% in July 2023 — a 52-year low.
    • In the first six months of 2023, there were about 1.4 job openings for every unemployed worker.
  • Wages kept up with inflation and present an opportunity for more growth in 2023.
    • From March 2022 to March 2023, Pennsylvanians saw a 7.6% increase in their average weekly wage, 1.7% after adjusting for inflation.
    • Decelerating inflation presents an opportunity for real wage growth in 2023.
  • The most recently available data, however, show that income inequality hit an all-time high in 2021 nationally, with stock and asset prices booming and few high-wage workers losing jobs.
    • The top 1% income share reached 27.4% in 2021, far above the previous record of 23.9% in 1928. Even setting aside capital gains, the incomes of the top 1% rose faster than the bottom 99% of incomes from 2019-2021.

In last year’s The State of Working Pennsylvania, KRC highlighted the possibility of a surge in union organizing that could fix inequality, fueled by high approval rates for unions, the high share of workers who say they would join a union if they had the chance, and innovative organizing at giant nameplate companies such as Starbucks and Amazon. Union membership did grow last year, by ,23,000 in Pennsylvania, including 19,000 in the private sector. But the potential of a New Deal-scale organizing wave continues to be held back by employers’ freedom in the United States to effectively deny workers the right to form a union.

The long-term power imbalance between labor and management must be rectified by policymakers to restore shared prosperity. Policymakers at every level of government need to.

  • Strengthen union rights in every way they can–this is the most powerful way to reverse growing income inequality.
  • Enact a  long-overdue minimum wage increase in Pennsylvania and pursue  sectoral labor standards boards to lift wages further.. 
  • Make Pennsylvania a national leader in skills development and career advancement by smartly  building on existing apprenticeship programs and increasing investments in Career and Technical Education (CTE) and higher education 

“We’ve made a lot of history recently. Historic gains against poverty and hardships despite a pandemic, historically high quit rates in leisure and hospitality jobs, and now historically low unemployment. And yet we’re still seeing historically high income inequality. ” said Claire Kovach, a Senior Research Analyst at Keystone Research Center and co-author of the report. “

“As Pennsylvania capitalizes on historic investment in infrastructure and climate projects,” added co-author Maisum Murtaza and Keystone Research Center Research Associate. “We need to create more good union jobs and make this the opening wedge of a full court press to revitalize the American Dream in Pennsylvania.”