Most middle-class Pennsylvania families have seen their wages and income stagnate since 2000 even though productivity in the economy has grown, according to the Keystone Research Center’s annual State of Working Pennsylvania report.
Growth in the size of the overall economic pie could have supported rising living standards for all Pennsylvania workers, Keystone’s researchers wrote, but an outsized share of the benefits went to the top 1 percent of earners, preventing board-based prosperity and slowing down the economic recovery.
The State of Working Pennsylvania is Keystone’s annual report of how working Pennsylvanians are faring in today’s economy.
This year’s report had little good news for most working Pennsylvanians, following a decade in which most workers experienced stagnant or falling wages and a recession that made family-sustaining job opportunities harder to come by.
For a four-person family, median income grew nearly twice as fast in the 1990s as it did in the 1980s, but it actually declined by $6,136 over the course of the “lost decade”– going from $82,818 in 2000 to $76,682 in 2010.
This decline occurred despite growth in the Pennsylvania economy because the benefits of growth went disproportionately to the top 1 percent of earners. The 1 percent captured more than half of all income growth in Pennsylvania between 2002 and 2007. After a brief setback, top incomes were on the rise again in 2010, capturing three out of every four dollars in income growth in Pennsylvania in the first full year of the economic recovery.
With economic forecasters predicting continued high unemployment in the nation and in the state, workers face the danger of another lost decade, Keystone researchers wrote. That would continue to claw back the wage gains of the second half of the 1990s, the only period of broad-based wage growth in the past 33 years.
“We remain stuck in the most extended period of high unemployment since the Great Depression,” said Mark Price, PhD, co-author and labor economist at the Keystone Research Center. “The longer we have this high a jobless rate, the greater the risk to middle-class wage gains made in the 1990s.”