Economic Development

Morning Must Reads: Unemployment Benefits Extended, Prevailing Wage Change Stalls and Running Government Like a Business

What a difference an election year makes. Last year was full of pointless brinksmanship over federal policy issues that will take several decades to solve. Those battles at times looked like they threatened the near term health of the economy. 

The New Year is shaping up to be very different. The New York Times reports this morning that a deal has been struck to extend the payroll tax reduction and extended unemployment benefits through the end of the year. Tentatively, it looks as if efforts to weaken the unemployment insurance system have been blocked. Both the payroll tax reduction and extended unemployment benefits were set to expire at the end of February, and the failure to extend them was on most economists' lists of things that could weaken the economy in 2012.

Morning Must Reads: Asset Tests, Layoffs and The Race To Give Away Tax Dollars To Big Oil

On Wednesday, the Pennsylvania Department of Public Welfare submitted its final proposal to the federal Food and Nutrition Service for an asset test on SNAP benefits (formerly known as food stamps).

Morning Must Reads: You Get What You Pay For: Human and Physical Capital

In the State of the Union address last week, President Obama called for more investment in programs that link training in higher education to employers. This morning the Harrisburg Patriot-News has an excellent article detailing one such program here in Central Pennsylvania.

Morning Must Reads: Perfectly Legal Forms of Wage Theft and Build Baby Build!

When you tip your server at a restaurant, you probably assume that all of that money goes to the server. If you use a credit card to pay, you would be wrong. 

It is very common for restaurant owners to use a portion of those tips to pay credit card processing fees.

The Philadelphia Daily News reports this morning that Philadelphia City Council has passed a law that stops restaurant owners from stealing from servers in this way. 

Third and State This Week: No Marcellus Shale Fee in 2011, Extended Unemployment at Risk and PA gets a D

This week, we blogged about a new report on economic development subsidies in Pennsylvania, the economic harm that ending extended unemployment insurance for 281,000 jobless Pennsylvanians will have, and the latest on the debate over enacting a Marcellus Shale drilling fee.


  • On economic development, Chris Lilienthal shared the results of a national study by Good Jobs First that ranked the 50 states' economic development subsidy programs based on job creation requirements and wage standards for workers at subsidized companies. Pennsylvania came in 40th.  
  • On the Marcellus Shale, Michael Wood blogged about 2011 ending as the last two years have — without a Marcellus Shale drilling tax or fee for Pennsylvania.
  • On unemployment, Sean Brandon laid out the facts supporting the extension of emergency federal unemployment insurance. With the average duration of joblessness among Americans at an all-time high, now is not the time for Congress to turn its backs on the unemployed. 
  • In the Morning Must Reads, Mark Price highlighted news stories discussing the safety issues of Marcellus drilling and the foreclosure crisis in the midstate

More blog posts next week. Keep us bookmarked and join the conversation!

PA Economic Development Programs Rank 40th on Job Creation, Job Quality Standards

A new national study sizing up hundreds of state-level tax credit, cash grant and other economic development subsidies has some bad news for Pennsylvania.

The commonwealth scored a D and ranked 40th place among the states in the Good Jobs First report, Money for Something: Job Creation and Job Quality Standards in State Economic Development Subsidy Programs. Some of the five Pennsylvania programs reviewed by researchers lack job creation requirements and wage standards for workers at subsidized companies. None of the programs required companies receiving state tax dollars to provide health benefits to workers in jobs or facilities funded by the subsidy.

Third and State This Week: Corporate Tax Avoidance, Insurance Rate Review and Prevailing Wage

This week, we blogged about a new report on state tax avoidance by some of the largest U.S. corporations, how to really save money on public construction projects, and legislation that undermines the state’s ability to review most health insurance rate hikes.


More blog posts next week. Keep us bookmarked and join the conversation!

Morning Must Reads: The Economic Development Ghosts of Christmas Past, Present and Future

ScroogeIn the holiday spirit this morning, I decided to go with a Charles Dickens theme. What follows are three stories in order which I would characterize as the Ghost of Christmas Past (north Kensington, Philadelphia), the Ghost of Christmas Present (Carlisle Borough) and the Ghost of Christmas Future (Charlotte, North Carolina).

Morning Must Reads: Job Numbers, Property Taxes and Smart Growth

The Pennsylvania Department of Labor and Industry reported Thursday that the number of jobs in the commonwealth grew by 13,800 in October, as the unemployment rate fell slightly to 8.1%. A key factor in October's relatively good performance was a pause in public-sector job losses.

So the good news is we had one positive month; the bad news is unless we have more months like October, the labor market is more or less stuck in neutral. Back in January, we estimated that the jobs deficit in Pennsylvania was 257,000 jobs (this is the number of jobs Pennsylvania needs to get back to full employment). The October jobs deficit is just over 237,000 jobs. In other words, the pace of job growth is such that we are back to full employment in more than eight and half years.

Weak job growth also means less revenue for local governments. Lackawanna County is set to raise property taxes by 38%.

Morning Must Reads: Business Subsidies and Corporate Tax Loopholes

Recently, Sarah Stecker of New Jersey Policy Perspective noted that Goya Foods will receive $80 million from the State of New Jersey to create nine new jobs.

I immediately thought of the Goya deal when I read Joseph DiStefano's column in The Philadelphia Inquirer this morning.

According to DiStefano, Pennsylvania gave Teva Pharmaceuticals $2.5 million to build a warehouse in Philadelphia that is projected to employee 500 people. Teva Pharmaceuticals over the last several quarters has reported $1.2 BILLION in profits. 

At least the Teva deal wasn’t as bad as the Goya deal, but on the other hand the states are engaged in a race. And it is that race that should scare you.

While recounting the details of the Teva deal, DiStefano relays a conversation he had with Pennsylvania Governor Tom Corbett about another promised state subsidy of $11.5 million for the financial services firm Janney Montgomery Scott.

I told Touhey what Pennsylvania Gov. Tom Corbett answered earlier this month when I asked why he promised brokerage Janney Montgomery Scott $11.5 million for moving its headquarters across Market Street: 'That's what makes this country great: We're not afraid to compete,' Corbett told me.

As Governor, Corbett says he's supposed 'to do one thing: grow jobs, jobs, jobs.' If states didn't compete by cutting deals, 'we'd grow fat and lazy.' By giving away cash, 'we are making Pennsylvania a business-friendly state.'

So there you have it. Based on the business subsidy that Goya Foods got from New Jersey, you the Pennsylvania taxpayer are fat and lazy! You know what this means? It's time shape up and lay off a lot more teachers, so we can give bags of cash to profitable companies to create a couple of jobs.

Taxpayer subsidies targeted at individual businesses do not alter the pace of job growth. They do, however, redistribute taxpayer dollars upward to wealthy business interests. They also reduce the resources available to finance critical public services like education, which can in the long run undermine our actual competitiveness as a state.

Speaking of robbing the taxpayer blind, the Pittsburgh Post-Gazette reports that the Pennsylvania Department of Revenue has concluded that the $10 million in realty transfer taxes that would normally be due on the sale of a building worth $250 million were avoided in a perfectly legal manner by the New York-based real estate investment firm that bought the U.S. Steel Tower.

Syndicate content