SWPA Blog #7: Policy—Pennsylvania’s Choice

Stephen Herzenberg |

Keystone Research Center released its annual report on the economy, “State of Working Pennsylvania 2022,” on August 30. This is the final blog breaking our report into bite-size pieces. To access the full report, including full references for this specific blog, and other “State of Working Pennsylvania” resources, please visit our SWPA 2022 Resource page.

This blog focuses on policy, a topic on which our main message—not for the first time—is that policy matters. With policies that support workers and unions over the next few years, and recognizing the opportunity created by high demand for workers and the depressed supply, Pennsylvania and the United States could finally begin to create what Keystone Research Center has called, since the 1990s, a “New Deal for a New Economy.” We highlight the four policy areas most directly relevant to increase equity in the labor market that should guide a new governor and legislature starting in 2023. Here we offer a brief overview of each of these policy areas. The end of our full report has more detailed policy recommendations in each area.

The policy most important to the birth of another “New Deal” is support for the growth of broad-based (area-wide, sectoral) unions, using the limited policy tools available to the state and the bully pulpit available to a new governor and new lawmakers. As workers at Amazon, Starbucks, and elsewhere seek to organize, Pennsylvania policymakers need to have their back and to elevate the fact that organizing successes can usher in a new era of shared prosperity.

Raising wages: Pennsylvania needs to raise its minimum wage to catch up with New York, New Jersey, and Maryland. Pennsylvania also needs to establish wage and benefit standards far above the minimum wage in particular industries—as already happens on public construction through the state’s prevailing wage laws. We need sectoral wage standards in trucking, caregiving, manufacturing, health care, and higher education—to name just a few sectors in which raising wages across the board would both benefit workers and serve the public good because it would raise productivity, competitiveness, quality, and/or safety.

Pennsylvania needs to get serious about building a skills and career infrastructure for a 21st-century economy. Under the past four governors, Pennsylvania pursued incremental change in this direction, investing in industry (training) partnerships and apprenticeship. It’s time to stop playing at the margins and to use a creative approach to shared investment in work-relevant skills by businesses and government. Our full report outlines such an approach. Pennsylvania also needs to fix its broken unemployment insurance (UI) administrative system, restore its unemployment compensation trust fund to solvency, reverse the cuts in UI benefits and eligibility that took place a decade ago, and then modernize unemployment compensation by linking it with effective training that leads to the next equally good job.

Government should promote marketplace competition that supports our values: equity, opportunity, and higher living standards—not promote the market as an end in itself. The last critical new policy “The State of Working Pennsylvania” highlights is the need for the next gubernatorial administration to fully embrace a holistic recognition that there is no such thing as a free market. Given this, the primary economic responsibility of government should be to structure the rules of marketplace competition and make the investments in public goods that lead to a more productive, racially and economically just, and sustainable economy.

Pennsylvania’s choice: The contrasting alternative to our prescriptions would be policies that reduce workers’ power, individually and collectively, in the job market. At the federal level, this could mean sustained higher interest rates and a return to austerity, at least while President Biden is in office. It could also mean continued inaction on the minimum wage nationally and in Pennsylvania, a Pennsylvania “right to work” law, repeal of the Pennsylvania prevailing wage law on public construction, further evisceration of unemployment compensation beyond the cuts under Governor Corbett, and other policies from the southern, red-state playbook. This would lower real wages during the period it takes for inflation to come back down to 2%–3%, and, in part because it weakens unions further, entrench more deeply and for the long-term economic inequality in Pennsylvania and a state legislature unresponsive to working people.

We hope that “The State of Working Pennsylvania 2022,” helps Pennsylvanians of all stripes, members of the media, legislators, candidates, and their staff decide on the basic policy direction that they think would most benefit the state.