Pennsylvania Wage Growth Stalls In Job Loss Recovery

The State of Working Pennsylvania 2003 Shows Erosion of Wage Gains of Late 1990s and Pennsylvania “Growing Apart” Again

Harrisburg -- Pennsylvania has lost 20,400 jobs since the recent recession ended in November 2001, and median wages have declined by 4.1 percent since the first half of 2002, according to The State of Working Pennsylvania 2003, an annual report on the health of Pennsylvania’s economy just released by the Keystone Research Center.

The report, based on extensive analysis of federal and state employment and wage data, calls on the General Assembly to consider new policies to address the Commonwealth’s economic ills.

The State of Working Pennsylvania 2003 finds that:

Pennsylvania is experiencing a “job loss” recovery. Since the recession officially ended in November 2001, Pennsylvania has lost 20,400 jobs.

Inequality, after narrowing in the late 1990s, is growing again. With the exception of one other year (1996), wage inequality is now greater than at any time in 20 years.

The labor force has declined precipitously in Pennsylvania in 2003. Between December 2002 and July 2003,124,904 people left Pennsylvania’s workforce – the third largest seven-month decline in the 33 years for which data are available.

Pennsylvania’s manufacturing sector has continued to decline. From 1990 to 2002 Pennsylvania lost 183,600 manufacturing jobs, or 19.4 percent of its manufacturing unemployment. Since the recovery began in November 2001, the state has lost 61,900 manufacturing jobs. Manufacturing jobs have, historically, been the anchor for Pennsylvania’s middle class.

“The data make it clear that if we limit our approach to cutting business taxes and providing subsidies to individual businesses, we will not generate economic growth that sustains middle class families” said David Bradley, co-author of the report. “If we aren’t careful, we'll end up sacrificing Pennsylvania’s middle class on an alter of economic correctness.”

“We think it is time for the state to implement broader and more accountable workforce and economic development policies targeted at improving job growth and job quality in Pennsylvania’s industry clusters,” said Stephen Herzenberg, co-author of the report.

The State of Working Pennsylvania 2003 is available for download from the Keystone Research Center Web site at www.keystoneresearch.org/swp2003.

The Keystone Research Center is Pennsylvania’s leading source of independent analysis of the state’s economy and public policy.