For Immediate Release
November 3, 2022
Contact: Kirstin Snow, PA Budget and Policy Center snow@pennbpc.org
Editorial Board Memo: PA’s Economy Heading into Election
To: Pennsylvania Editorial Boards and Other Members of the Media
From: Dr. Stephen Herzenberg, economist and executive director, Keystone Research Center
Subject: The Facts on the Pennsylvania Economy
Recent polls tell us that the economy is voters’ top concern in this election. One reason: inflation is making it hard for many families to pay the bills. Yet accurate information on the Pennsylvania economy is hard to come by—how it is performing from the perspective of working families, and, most important, the consequences of the November elections for future policies and for working families. The importance of getting full and accurate information out to voters is so that they can weigh competing values and approaches to economic issues and have the tools to vote their best economic outcomes.
To arm editorial boards and other members of the media—and thus voters—with more complete information on the economy, Keystone Research Center has abbreviated (and in some cases, updated) sections of the “State of Working Pennsylvania 2022,” first released August 30. (For the full report and other resources go to SWPA 2022 Resource page.) Our overall findings: first, alongside the challenges of high inflation, several other indicators of the current economy favor workers; second, federal and state policies in 2023—shaped by the election results—will determine whether the strength of the current economy for working families leads to an extended period of shared prosperity or to a return to wage stagnation and rising inequality.
This memo describes each stand-alone section of SWPA2022 to help you find the information you need. To set up interviews or seek additional data, please email (snow@pennbpc.org) or call (215-510-9336) Kirstin Snow.
The first three blogs contain information on
- the overall state of the economy.
- the labor market (“How Great the Resignation?”), evaluating how “tight” the labor market is based on measures such as unemployment, the number of job openings compared to the number of unemployed, and ratio of quits to layoffs plus discharges.
- wage trends.
These three blogs document the first of our main findings: the Pennsylvania economy is more favorable to workers than recognized. Wages—adjusted for inflation—have been rising for workers since 2014. There are also about two job openings for every unemployed worker and twice as many workers quitting jobs as getting laid off or discharged. In sum, under two presidents, the United States has navigated the most rapid collapse of the economy ever—necessitated by the effort to slow the spread of COVID-19—and then recovered with unprecedented speed a labor market with low unemployment and opportunities for many workers, including the opportunity to get new and better jobs.
The fourth blog analyzes wage trends at the low end of the Pennsylvania labor market and shows that lower-wage Pennsylvania workers are earning thousands of dollars less each year than workers in neighboring states with much higher minimum wages. This is a direct consequence of the failure of the Pennsylvania legislature to raise our minimum wage, despite repeated proposals to do just that from Governor Wolf.
Blog number five addresses corporate profits and inflation. While many working families struggle to make ends meet because of rapid hikes in the prices of fuel, food, rent, and other basics, news reporting has underplayed some dimensions of the inflation story that we unpack: that price gouging by corporations is a big driver of inflation; that other countries have even higher inflation; that inflation has moderated recently; that the Federal Reserve Bank expects inflation to drop below 3% next year; and that policies within the recently passed Inflation Reduction Act should help moderate inflation.
The sixth blog analyzes the state of unions in Pennsylvania and the United States, highlighting that there is more support for unions, and more potentially transformative union organizing taking place today, than there has been since the 1950s and 1960s. We explain why today’s organizing foreshadows a potential union “comeback” on the scale of union growth from the 1930s to the 1950s—big enough to mostly “fix” U.S. income inequality and to give unions and their coalition partners enough influence on policymaking at the federal and state level to sustain “an economy for the 99 percent.”
The last blog addresses policy and highlights that policy matters—and, by inference, who we elect to make policy matters. We spell out recommendations on unions, wage setting, skills development, and the overall frame that state policymakers bring to economic policy (they should seek to promote constructive or “high road” competition in each industry). In the context of today’s tight labor market and union organizing wave, if federal and state policy support workers, unions, and increased equity, we could achieve a new era of shared prosperity. If federal and state policy deliberately cut spending, increase unemployment, seek to further weaken unions (e.g., through a Pennsylvania right-to-work law) and reduce wages (e.g., by eliminating or weakening Pennsylvania’s prevailing wage law that raises wages on state-funded construction), we could quickly see a reversal of the wage increases since 2014 and a restoration of the post-1980 norm of falling wages. The stakes of this election and the policies that result from it are very high.