The State of Working Pennsylvania 1998

Authors: 
Howard Wial
Authors: 
Stephen Herzenberg
Publication Date: 
September 1, 1998

EXECUTIVE SUMMARY

By the standards of the recent past, the last year brought good news for Pennsylvania workers. For the second year in a row, the state’s working people received a modest raise (seventenths of one percent in 1997, after adjusting for inflation, following a 2.1 percent raise in 1996).1 Even low-wage workers made more in 1997 than they did in 1996.The state’s unemployment rate in 1997 was at a nine-year low. Job growth is higher than in the recent past.

But don’t break out the champagne just yet .The gains of the past two years have been modest. Comparing these gains to the declines of the past two decades, the story of the Pennsylvania economy remains one of great disparities. Consider the following:

  • With the wage hikes of the past two years, Pennsylvania workers earned exactly three cents more per hour in 1997 than in 1989. Pennsylvania workers still earn six percent less than they did in 1979.
  • Only one of Pennsylvania’s major economic regions enjoyed substantial progress in 1997.
  • In 1997, the hourly earnings of a typical Philadelphia-area worker were $13.00 per hour, 83 cents higher than in 1996.Wages in the Philadelphia area are now higher than at any point in the last two decades.
  • But in metropolitan Pittsburgh, 1998 was a very bad year. Hourly wages plunged 76 cents per hour, falling below 1994 levels and wiping out almost all the gains Pittsburgh made earlier in the 1990s. Pittsburgh-area wages are now $2.55 per hour below their 1979 level.
  • In the rest of the state, wages stood still in 1997, remaining roughly 30 cents per hour below both their 1994 and 1989 levels.
  • And in the midst of regional prosperity, the city of Philadelphia still lost jobs in 1997, and its low-wage workers took a pay cut.
  • Even in the last two years, hourly wage gainsin Pennsylvania have trailed productivity increases.
  • Most of Pennsylvania’s job growth during the last few years has been in low-wage industries, unlike in the early 1990s, when most job growth was in high-wage industries. Since 1994, job growth in Pennsylvania has remained slower than in five of six neighboring states and the nation as a whole.
  • African American men have not shared in recent wage gains.Their hourly earnings remain $1.45 less than in 1994 and $3.78 less than in 1979.
  • Men, low-wage workers, and workers without a college degree still have lower wages than in 1989.
  • Over a quarter of Pennsylvania workers earn too little to lift a family of four above the poverty line. These workers have fallen even further behind the poverty line since 1989.
  • The gap between high-wage earners and lowwage earners in Pennsylvania jumped from 1989 to 1994 and has since stayed at its new high level. The richest 20 percent of Pennsylvania families received 87 percent of the total increase in Pennsylvania family income since the late 1970s and 69 percent of the increase since the mid-1980s.
  • Youth, people without high-school diplomas, and African Americans have double-digit unemployment rates. Unemployment remains high in the cities of Philadelphia and Pittsburgh.