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Economy Moving, but Pennsylvania Missing Out

While the nation's economy is slowly improving, Pennsylvania's unemployment rate is on the rise.

       Jobs numbers released at the end of last week touched off some celebration across the United States as unemployment hit a four-year low behind strong job creation.

       But it’s a little like watching a party over the fence at the neighbor’s house.

       The economy is moving again and Pennsylvania is being left behind.

       The latest figures from the Bureau of Labor Statistics showed 8.2 percent of Pennsylvanians unemployed in January, the worst rate since the 2010 elections that put Gov. Tom Corbett in office.

       The national unemployment rate dropped to 7.7 percent for February.  When the bureau releases numbers for Pennsylvania, it’s likely that it will be the sixth consecutive month where Pennsylvania has had a higher unemployment rate than the rest of the nation.  After years of better-than-average performance, Pennsylvania’s economy is lagging behind the nation.

       One of the contributors to the state’s sluggish job numbers is the administration’s decision to stake everything on gas drilling.  During tough economic times, job training programs were cut, teachers were laid off and thousands lost jobs in human services.

       All the while, multi-national energy companies were getting a sweetheart deal in their mad rush to drill.  Now, the boom is over.

       Gas prices have plummeted and unemployment in heavy drilling counties is spiking.  We were told that it was better to lay off teachers than tax drilling companies because we didn’t want to do anything to slow down the expansion.

       Well, two years later, the boom is over and the teachers are still gone.

       Pennsylvania needs a balanced and progressive job-creation policy that spreads opportunity across the state, in cities, suburbs and rural mountain tops.  Investments in infrastructure, education and transit would grease the wheels of the economy and create sustainable growth beyond the boom-and-bust cycle of corporate compliance.

PA & U.S. UNEMPLOYMENT RATE
(June 2012 - February 2013)

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Minimum Wage History Proves Opponents Wrong

Defenders of poverty wages are trotting out the same old disproven predictions to avoid increasing Pennsylvania's minimum wage..

       When President Obama included in his State of the Union address a call to raise the minimum wage, it set off a predictable round of wailing from the defenders of poverty wages.

       Their tactics of making simplistic predictions and paranoia among workers and consumers are timeworn and provably false.

       The federal minimum wage turns 75 this year, and over that time it has been adjusted to overcome inflation 21 times. Combine that with what state legislatures have done and there have been hundreds of minimum wage adjustments over the years.

       It would seem that with all that history, apologists for poverty wages wouldn’t be limited to vague predictions of doom. But such cloudy forecasting is all they have because the history of the minimum wage makes a compelling argument for future adjustments.

       Right wing think tanks do some tortuous economic contortions to defend their sponsors’ sub-standard treatment of employees. But overwhelming public support for fair wages always prevails. An adjustment is made and the sky doesn’t fall on low-wage workers or their employers.

       Ten years ago, when I sponsored the last minimum wage adjustment in Pennsylvania, a local think tank predicted massive job losses among minimum wage workers and a dramatic spike in the price of consumer goods such as pizza.       

       However, after the bill became law and the phase-in began, employment in the leisure and hospitality industries, where half of minimum wage workers toil, grew at nearly three times the rate of the rest of the job market.
And the price of pizza in states with higher minimum wages is virtually the same as it is in low-wage states.

       For those who think poverty wages are good for the economy, Oregon must be considered The Badlands. With a nation-leading minimum wage of $8.95 per hour, low-wage promoters might have you believe that there are no big box stores, fast food restaurants or pizza shops still open.

       Yet, somehow, they survive.

        Critics of Oregon’s landmark 2002 minimum wage bill, which tied the wage to the consumer price index, predicted 30,000 low-wage workers would lose their jobs.
Despite heavy corporate lobbying, voters narrowly approved the adjustment and employment in the restaurant industry began to grow at twice the rate of the overall state workforce, according to Oregon’s Employment Department.

       Still, if you listen to the big business lobby, the poor people of Oregon must need to save for months to get prepared foods, right?

       Wrong.

       The Internet makes it easy to find out whether pizzas, hamburgers or hotel rooms cost more in states with higher minimum wages. They don’t, and anyone with a computer can see it.

       The big difference is low-wage workers in Oregon have more buying power, which means they buy more goods and that’s good news  and good business for the owners of small, local businesses.

       Employees earning more money collect less in food stamps, rent subsidies and other government assistance while employers in low-wage states depend on taxpayers to fill in the gap between their wages and a living wage.
A single mother with one child working full-time earning Pennsylvania’s minimum wage earns $600 less than the federal poverty rate. In Oregon, she earns $2,700 more than the poverty rate.

       Between 2006 and 2007, when Pennsylvania’s minimum wage rose in three steps from $5.15 per hour to $7.15, the state’s poverty rate dropped from 11.3 percent to 10.4 percent, the second largest single year drop in 25 years. There were 124,000 fewer             Pennsylvanians living in poverty in 2007 than in 2006. In the next four years, the number of Pennsylvanians living in poverty rose by more than 400,000.

        With all that history, economists aren’t the only ones who support a reasonable wage floor.

       Voters overwhelmingly support an inflation-proof minimum wage, leaving the poverty-pay lobby to depend on obstruction to keep minimum wage legislation from coming to a vote.
In the decade after the narrow victory in Oregon, and the subsequent debunking of the myths, voters in 10 states passed similar legislation by wider and wider margins.
In 2006, six states – both red and blue – agreed that fair wages reduce poverty, help the economy and decrease government dependency.

       In Missouri, where voters awarded five of their nine U.S. House seats to Republicans but narrowly elected a Democrat to the U.S. Senate, 76 percent supported adjusting their minimum wage for inflation. In Nevada, Republicans won two of three house seats and the governor’s office while 66 percent of supported fair wages.

       In return for higher wages, employers in those states got a more predictable wage law, reduced employee turnover, a more efficient workforce, and a customer base with more buying power.