KRC's State of Working Pennsylvania 2008 showed stagnant wages, tumbling home prices, and skyrocketing income increases for the wealthiest Commonwealth residents amount to an economic crisis for the state's middle class, a crisis that's eroding economic opportunity.

To help voters make informed choices about the economic plans of Senators Barack Obama and John McCain KRC has released a speech, Building a Moral Economy, that KRC would like to hear either candidate offer in Pennsylvania in the coming weeks.

“With polls finding the economy the number one issue across the land, voters are starved for a convincing story about how each candidate would restore broadly shared prosperity,” said KRC economist Stephen Herzenberg. “Voters don’t want a laundry list. They do want some specifics that would make a real difference, plus they want an overall vision that restores confidence in the possibility of a better future. We’ve prepared a speech that outlines how America could create a moral economy that delivers economically and sustains, rather than undermines, families and communities. We encourage both candidates to take freely from it.”

KRC has also released a scorecard with 10 criteria for rating the candidates’ economic plans. The criteria are drawn from KRC’s economic analysis and vision, and can be used to assess the candidates’ understanding of the economic realities facing working families and to improve those realities. Individual criteria address wages, benefits, worker training, green jobs, unionization rights, trade policies, and the need for an economic stimulus that would kick-start a transition to a more moral economy.

“We think our scorecard criteria provide a solid basis on which the average voter can evaluate both candidates,” said Dr. Herzenberg. Herzenberg said providing the voter scorecard and the speech is a logical extension of what KRC—a nonprofit, nonpartisan research group—does. “Since our founding in 1996, our mission has always been highly practical and pragmatic—promoting solutions that will actually work to improve the lives of Pennsylvania workers and families.” he noted. “In The State of Working Pennsylvania 2008 we’ve pinpointed the current problems. Now we’re presenting the solutions in a form that we hope will reach some new audiences.”

With a change in the presidency at hand, he added, it is the perfect time to offer a vision to both campaigns. “Our proposal is simple and workable, and we would be thrilled to have it ‘plagiarized’ by Senator Obama or Senator McCain,” he said.

In The State of Working Pennsylvania 2008 Herzenberg and KRC labor economist Mark Price, PhD, found that the year-old national economic crisis with its rising mortgage foreclosures, falling home prices, and severely stressed financial institutions, has already damaged the Pennsylvania economy. The wages of most Pennsylvania workers are stagnant, and the concentration of income among the richest 1 percent of earners is approaching the level of the 1920s, the report showed.

Perhaps more telling, The State of Working Pennsylvania 2008 also revealed that even before the economy began to falter, Pennsylvania workers were not doing well.

“The expansion that began in November 2001 was characterized by slow employment growth, and the share of the population employed failed to reach the levels achieved in the late 1990s,” Price and Herzenberg wrote. “Weakness in the labor market translated into anemic wage growth that failed to even keep pace with inflation.”

The report’s figures on the flat incomes of middle- and low-wage workers contrast sharply with its data on the rapidly rising incomes for the wealthiest Pennsylvanians. Between 2001 and 2005, the richest 1 percent of Pennsylvania families captured nearly 80 percent of all the growth in personal income in the state.

This is a stunning reversal from the 1997-2000 period, Price said, when the top 1 percent of families captured just 10 percent of the growth in personal income. The State of Working Pennsylvania also discusses the current housing problem in the commonwealth, where home prices have dropped by 4 percent since the first quarter of 2007.

“With both wages and home prices falling, and savings rates close to zero, families are being squeezed in a way that is likely to depress consumption spending in the months ahead,” Price noted. “And since consumption spending makes up about 70 percent of the Gross Domestic Product, this does not bode well for the broader economy.”