Keystone Research Center released its annual report on the economy, “State of Working Pennsylvania 2022,” on August 30. This is the fourth installment of our series breaking the report into bite-size pieces. To access the full report and all the resources associated with the “State of Working Pennsylvania,” please visit our SWPA 2022 Resource page.
This blog focuses on wage trends, where the facts contradict the Fox News-driven narrative that the economy is not performing well for working families. Wage data through the end of 2021, the latest we have available, show that the economy has been performing much better than usual from the perspective of working families. In the last decade, especially since about 2014, Pennsylvania workers have seen their first sustained, broad-based increases in wages since the long economic expansion under President Bill Clinton in the 1990s. From 2014 to 2021, inflation-adjusted wages rose by 9% to 19% for workers throughout the wage distribution—near the top of this range for low- and high-wage workers and near the bottom for workers in the middle.
For most of the four decades since 1979, Pennsylvania’s wages followed a consistent pattern: slower wage growth for lower-wage workers and faster wage growth for higher earners. Since 2014, however, wages have increased. The table below breaks the 10-year period from 2011 to 2021 into three sub-periods. From 2011 to 2014, wages were flat for the top half of the distribution and declined slightly for the bottom four deciles. From 2014 to 2019, wages increased across the board due to a period of falling unemployment and continued economic expansion, not unlike the second half of the 1990s.
Since 2019, wages have been somewhat volatile. They tended to rise in 2020 because large numbers of low-wage workers left the labor market during the height of the pandemic, leaving behind mostly higher-earning workers. Wages tended to fall in 2021 because larger numbers of low-wage workers came back into the labor market. Looking at 2019-21 as a whole makes it easier to see the longer-term trend. Over this two-year period, wages rose the most in the bottom third of the wage distribution. Workers at the 10th, 20th, and 30th deciles saw 5%, 9%, and 6% wage growth, respectively, while no higher decile saw more than 4% wage growth.
Combining two of our “sub-periods” in the last decade (2014-19 and 2019-21), wage growth has been robust by the standards of the past four decades. In these seven years, wages rose by 13% to 19% at the bottom three deciles—roughly 2% annually. In the middle three deciles, the 40th to the 60th, wages rose by 9% to 11%. In the highest three deciles, wages rose by 12% to 17%.
These data do not mean that wages will continue to keep up with inflation—as the end of our report elaborates, that depends on public policies going forward. But, so far, public policies have navigated the pandemic recession, the fastest plunge then rebound our economy has ever had, and maintained the progress workers were making prior to the pandemic.
PA Wages by Decile, 2011–2022
(inflation-adjusted 2021 dollars)
|% Change 2011-14||-1%||-4%||-3%||-1%||0%||0%||1%||2%||0%|
|% Change 2014-19||9%||10%||7%||7%||8%||7%||8%||9%||15%|
|% Change 2019-21||5%||9%||6%||2%||3%||3%||4%||4%||2%|
|% Change 2011-21||14%||16%||11%||7%||11%||10%||14%||15%||18%|
|$ Change 2011-21||1.4||2.0||1.6||1.2||2.1||2.3||3.9||5.1||7.9|
|Source: Keystone Research Center based on Current Population Survey data accessed through Economic Policy Institute data library.|
Our full State of Working PA 2022 report contains striking charts showing wage trends by race/ethnicity and gender, by education level, and by broad occupation for three blue-collar groups.
In 2021, the median hourly wage for white workers was $5.51 higher than the median wage for Black Pennsylvanians and $6.50 higher than the median for Hispanic Pennsylvanians. Figure 14 in the report shows median wages for white, Black, and Hispanic Pennsylvania workers over time (Hispanic back to 2000, white and Black back to 1979). In the 1980s, the Black median hourly wage bounced around $1 to $2 per hour below the white median. Black workers earned roughly 90% of the wage of white workers. In the last three decades, the Black median hourly wage has declined to three-quarters of the white. The Hispanic median hourly wage was lower still during the late 1990s through 2015, but more recent data show that it is now closer to and tracks the Black median. In 2021, Black and Hispanic median hourly wages were 76% and 72% of the white median wage, respectively.
Turning to gender pay disparity, figure 15 in the full report shows that the gap between men’s and women’s wages shrank by over half from 1979 to 2011-12, both in Pennsylvania and nationally. The female median wage worker made nearly 40 cents on the dollar less than the male in 1979 and about 20 cents on the dollar less in 2011. In the last 10 years, the progress of women relative to men at the median wage for each gender has stalled in Pennsylvania. Pennsylvania women’s median wage was 79% of the men’s median wage in 2021, compared to 86% nationally.
Figure 16 in the full report shows the well-known rising gaps in earnings based on education levels since 1979.
Figure 17 in the full report looks at wages in one more way—for blue-collar workers in four key industries (trucking, warehousing, construction, and manufacturing). In all four industries, inflation-adjusted wages have stagnated since the mid-1980s. Wages would likely show a bigger decline in these sectors if our data went back to 1979 because 1979-85 were years of wage decline for workers without a high school degree or with just a high school degree. Trucking wages would also show a bigger decline if data on how many hours drivers work were accurate. The data do not fully capture that long-haul truck drivers spend many hours far away from home waiting for their next load and don’t get paid for that time. The stagnation of blue-collar workers’ wages for four decades is one of the reasons many working people are angry about the economy and feel like public policy ignores their plight.
As with wages for other types of workers, the key question is: what policies would help restore wage growth for blue-collar workers going forward? A starting point would be policies supportive of labor unions plus more widespread use of policies such as prevailing wage laws that ensure decent wages on publicly funded construction. How about a “safety wage” for truck drivers so they don’t have to drive inhumane, unhealthy, and unsafe numbers of hours to earn a decent income?