Pennsylvania's New Jobs Pay 23% Less Than Its Old Jobs

New Data Suggest Continued Erosion of State’s Middle Class Purchasing Power and Economic Security

Harrisburg – New jobs in Pennsylvania’s expanding industries pay, on average, 23% less that jobs lost in contracting industries according to a new analysis of federal wage and employment data released today by the Keystone Research Center and the Washington D.C.-based Economic Policy Institute (EPI).

Between November 2001 and December 2003, jobs in contracting industries in Pennsylvania paid an average of $40,175 a year, and jobs in expanding industries paid $31, 055, $9,121 less per year than jobs in contracting industries.

Industries that expanded employment in Pennsylvania between 2001 and 2003 included construction, finance, education and health services, leisure and hospitality services, and government. Professional and business services, mining and natural resource extraction, manufacturing, wholesale and retail trade, transportation, utilities, and information services all decreased employment in the same period.

“As costs Americans have long thought essential to a middle class standard of living – like health insurance and a college education – are increasing, a great many workers are having to make do with less, significantly less” said Peter Wiley, KRC communications director.

The new data also raise questions about the strength of the current economic recovery, according to Stephen Herzenberg, an economist and executive director of the Keystone Research Center.

“There is a growing consensus that the current recovery has been financed largely by demand generated by consumer barrowing. For the recovery to be sustainable there must be, fairly soon, a shift to demand generated by growth in wages. This new analysis suggests that wages are not growing and so the shift to wage-led demand may be may not happen, at least not very quickly” said Herzenberg. “If consumers use up their credit before their wages begin to rise the economy could tip back into recession.”

At the national level, according to the EPI, industries that are gaining in jobs relative to industries that are losing job pay 21% less annually, making Pennsylvania’s 23% slightly higher than the national average. The EPI analysis and state-level data are available at www.jobwatch.org.

Throughout 2004, with the economy the top concern of many Pennsylvanians , the Keystone Research Center will be paying special attention to employment and wages in the Commonwealth. KRC will release monthly analyses of new state and federal jobs numbers and on state unemployment and wage numbers.

The next KRC release of state unemployment numbers will be on Tuesday, January 27. The data in these releases will be made available on KRC’s economic snapshot Web page at www.keystoneresearch.org/snapshot. The economic snapshot page brings together historical data and current analysis unavailable from any single free Web-based source in Pennsylvania.