Despite GDP growth, rising productivity and record profits, many Pennsylvanians continue to feel insecure economically, for themselves and for their children. A look at the economic measures that matter to typical families -- middle-class wages, benefits, and incomes --makes clear why.
As many southwestern Pennsylvania families know from their personal experience, a strong economy has not translated into higher living standards for most people.
New data for 2006 from official government sources indicate that for the fifth straight year, wages continue to stagnate for most Pennsylvania workers.
For example:
Adjusting for inflation, earnings at most wage levels climbed by less than 1 percent between 2005 and 2006.
Over the four-year period from 2002 to 2006, a period of steady economic growth, wages for most low-, middle- and even high-wage workers fell.
Even college-educated workers in Pennsylvania have seen their wages fall 7 percent in the last several years.
As documented in Keystone Research Center's State of Working Pennsylvania 2006, other measures of middle-class well-being show similar trends.
The last several years have been a period of stagnation and decline in family income, which includes earnings from nonwage sources.
They have also been years of declining coverage in health and pension benefits.
The lack of progress for the middle class contrasts strikingly with the robust performance of the economy itself. Since 2002:
U.S. inflation-adjusted corporate profits haves risen 63 percent
Productivity -- the value of output per worker ---has climbed 12 percent.
Pennsylvania families know in their gut that the link between our strong economy and the well-being of the middle class has been broken. They also know in broad terms why: The economic world has changed, most visibly through globalization and the shrinking of the manufacturing sector, and too many Pennsylvania have been the victim of these changes.
What Pennsylvanians want in response from state government is a long-term plan to repair the broken link between wages and productivity growth and to sustain strong economic growth for the long term.
Recent state policies begin to move in the right direction. In areas such as early childhood education and work force skill development, renewable energy and now proposals to expand health-care coverage, Pennsylvania has begun to invest on the future. It is increasingly looked on as a leader. Now is the time to put these pieces together into a comprehensive long-term plan that could bring a new era of broadly shared prosperity to the Keystone State.
"The Prescription for Prosperity: An Economic Agenda for Pennsylvania's Future," developed and endorsed by a broad coalition of Pennsylvania groups, outlines such a plan. It includes proposals to further bolster the skills and education of the work force, invest in job creation linked to the industries of the future, broaden health-care coverage and bolster retirement security, and moving toward a more progressive tax structure. For a copy of the plan, go to www.keystoneresearch.org/agenda/Agenda.pdf.
And for The State of Working Pennsylvania 2006, Keystone Research Center's 11th annual review of the health of the Commonwealth's economy, issued on Labor Day, 2006 go to www.stateofworkingpa.com/.