Morning Must Reads: The Impact of Economic Austerity, Student Loans and the Geography of Manufacturing

The U.S. economy is growing, albeit too slowly to make a substantial and badly needed dent in the unemployment rate. Growth in the U.S. economy will almost certainly mean continued growth in the Pennsylvania economy.

The most important risk to Pennsylvania's job growth in 2012 remains job losses among teachers, nurses and other public servants caused by federal and state budget cuts. 

In 2011, Pennsylvania shed more than 22,000 public-sector jobs. It is too early to know whether 2012 will bring similar losses, but as public agencies continue to grapple with revenue shortfalls, the predicted job losses and service cuts mount.

This morning’s news is full of stories about layoffs, tax increases and service cuts scheduled to take effect over the next few months all across the commonwealth.

Service cuts and layoffs by the Port Authority in Pittsburgh are helping people think twice about traveling into the city to spend money, illustrating once again that economic austerity erases jobs and undermines the quality of life in a community.

For many transit riders, Saturday's fireworks show at PNC Park was followed by a dud.

Port Authority says it can no longer afford to provide extra Light Rail Transit service after crowded stadium events. But last weekend, a staffing shortage prevented it from meeting even its stripped-down regular schedule.

Hopefully, Pittsburgh Opera fans don't rely on public transportation; otherwise Governor Corbett might get as cool a reception in the opera house as he is expected to get outside of it thanks to his mixed brand of economic austerity, tax cuts and cash for businesses and fewer art teachers for the kids.

When blogger Jessie Ramey of Point Breeze thinks of opera, the governor and arts education together, she said "The Beggar's Opera" comes to mind because "public schools have become beggars, hoping to salvage their arts curriculum with donations."

When the Pittsburgh Opera thinks of opera, the governor and arts education together, it gets ready to award a Lifetime Achievement Award to Gov. Tom Corbett and his wife, Susan, for their support...

"This is not something that is anti-opera. This is about what's happening to funding in our public schools," she said.

The Corbett award, she said, "really hit a nerve. People are really reacting, and they're passionate about arts education.

"The award has attracted about 300 comments on the opera's Facebook page questioning the decision, calling it "unreal," "deplorable" and "unbelievable."

In other economic austerity news:

Incoming Superintendent Carol Johnson said she can’t yet share details of the process involving 74 teaching positions and 10 support staff being cut.

The closing of the U.S. Postal Service processing and distribution center on Stafford Avenue is probably months away even if there is no action in Washington that would further delay the planned shutdown.

A moratorium on the consolidation of the Scranton regional center and hundreds of others across the country is set to lapse Tuesday, but nothing will happen immediately, Postal Service regional spokesman Ray Daiutolo said...

With Congress at work on alternatives that could stall or reverse the planned closures, the 300 employees at the Stafford Avenue facility whose jobs would be affected are still hopeful of a reprieve, said Kevin Gallagher, president of American Postal Workers Union Local 101.

Big Spring School Board Monday approved a preliminary $41.2 million budget for 2012-2013 that hikes the real estate tax by 2.2 percent while cutting the equivalent of 10.5 teachers from the payroll.

As Philadelphia school officials were pleading with City Council for more money Tuesday, a group of Philadelphia state legislators was pushing a bill to redirect gaming revenue to the schools.

Roughly $86 million a year generated from gambling now goes toward reducing the city wage tax for people who live or work in Philadelphia.

One of the more unseemly and destructive features of the last two years has been the repeated hostage taking by members of the U.S. House and Senate. Remember the debt ceiling fight last year when the economy was the hostage, or again when jobless Americans were taken hostage as unemployment benefits were set to run out at the end of last year?  

Well, now it's the young with student loans. As Heidi Shierholz, Natalie Sabadish and Hilary Wething point out, the labor market for people under 25 remains grim. Those fortunate enough to have graduated and are now repaying their student loans can look on in horror as electoral politics is stopping action to prevent the interest rates they pay on their student loans from doubling.

Senate Republicans derailed a Democratic bill on Tuesday keeping interest rates on federal college loans from doubling July 1 in an election-year battle aimed at the hearts — and votes — of millions of students and their parents.

Republicans said they favor preventing the interest rate increase but blocked the Senate from debating the $6 billion measure because they oppose how Democrats would pay for it: Boosting Social Security and Medicare payroll taxes on high-earning stockholders of some privately owned corporations.

I should note Natalie Sabadish, now of the Economic Policy Institute, is an alumni of the Keystone Research Center. Speaking of KRC alumni, Howard Wial, now of the Brookings Institution, and his coauthors have a fascinating paper out on the geography of manufacturing production in the United States. Check it out.


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