Federal Budget and Taxes

For Some, Reading Is Hard

Recent commentaries by the Pittsburgh Tribune-Review's editorial board and the Allegheny Institute in Pittsburgh offer a good lesson for why you should really try to read all the way to the end.

Morning Must Reads: CEO Pay, Manufacturing Pay and Austerity Economics In Action

The Pittsburgh Tribune-Review reports this morning that the Pittsburgh-based retailer American Eagle Outfitters has hired a new CEO. So what is it like to be the CEO of the company most responsible for millions of tweens wearing sweat pants in locations other than the gym?

Well, for starters, you get a nice signing bonus and $15,000 for your lawyer to review your contract, a luxury car and a severance package equal to two years of your salary plus your stock options should things not work out.

The new CEO made $2.6 million a year at Levi Strauss, so he just got a 242% raise. As King Louis XVI of France was fond of saying, it's good to be king.

American Eagle Outfitters Inc.'s new CEO Robert L. Hanson could make as much as $26.7 million over his first three years with the company, the South Side clothing retailer disclosed in a Securities and Exchange Commission filing.

Averaged over the three-year contract, the $8.9 million a year Hanson could make leading American Eagle would rank him near the top 10 CEOs in Pittsburgh for annual compensation in 2010.

If you are concerned about a lack of good jobs for the 99%, one positive development is that Governor Tom Corbett has formed an advisory council to be housed at the Team PA Foundation to focus on issues important to manufacturing. On average, manufacturing jobs pay better than jobs in the service sector (especially at the low end, see the chart) so it makes sense to do what can be done to expand manufacturing employment.

Morning Must Reads: What Went Wrong and the Confidence Fairy Is Back!

Over the next year, The Philadelphia Inquirer will be updating a series from 1991 titled "America: What Went Wrong," by Donald L. Barlett and James B. Steele. This morning, Barlett and Steele take on the legacy of Apple Computers. 

The death of Steve Jobs was followed by an avalanche of superlatives — brilliant, genius, and visionary among the more common. He was likened to Leonardo da Vinci, Albert Einstein, and Thomas Edison.

But in the case of Edison, there was one significant difference that went unmentioned. For more than a century, just one of Edison's inventions alone — the incandescent lightbulb — was manufactured at numerous locations in the United States, providing employment for millions of Americans across family generations.

The Apple home computer, not at all. After only one generation, all the Apple manufacturing jobs in America disappeared, as the work of building and assembling the machines was turned over to laborers in sweatshops in China and other countries. Jobs that should have provided employment for Americans for decades to come were terminated

While Barlett and Steele explore what went wrong, the Pittsburgh Post-Gazette's series Middle of Nowhere continues today with a survey of major events and policy choices that are thought to be important to creating the middle class in America.

Third and State This Week: Weak Drilling Fee, More Bad Employment News and Ranking Social Well-being

This week, we blogged about the latest developments in enacting a Marcellus Shale drilling fee, more bad employment news for Pennsylvania and a new study ranking nations based on indicators of social well being (the U.S. doesn't do so good).

IN CASE YOU MISSED IT

  • On the Marcellus Shale, Sharon Ward provided an update on legislative developments in the Pennsylvania House, and Michael Wood shared a new fact check from the Pennsylvania Budget and Policy Center comparing the effective rates of leading drilling tax and fee plans before the General Assembly.
  • On inequality, Stephen Herzenberg blogged about a new study that ranks the 31 Organization for Economic Co-operation and Development (OECD) countries on eight indicators of social well-being. The U.S. ranks 27th.
  • On jobs and unemployment, Mark Price wrote about more bad employment news for Pennsylvania, including a revised outlook from the Philadelphia Federal Reserve signaling that the state's economy will be shrinking through the first quarter of 2012.
  • In the Morning Must Reads this week, Mark Price summed up local unemployment data, shared an amusing video from The Daily Show suggesting that it is time for the 1% to go on strike, wrote about rising college tuition and budget strains for local governments, highlighted a lack of political will for fixing the broken economy, and noted that some in the U.S. Senate would just prefer that people that have to drive over structurally deficient bridges would just drop dead.

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

Morning Must Reads: Local Governments Under Pressure, Students Under Pressure, State Policy Makers Not So Much

The Federal Open Market Committee (FOMC), the body that establishes monetary policy at the Federal Reserve, announced on Wednesday that it is expecting the economy to grow more slowly than previously thought over the next several years. 

In response to the deteriorating economic situation, the committee decided to do nothing. 

At his press conference explaining the FOMC decision, Federal Reserve Chairman Ben Bernanke urged Congress to do something about jobs.

'I think it would be helpful if we could get assistance from other parts of the government to help create more jobs,' Mr. Bernanke said.

Meanwhile, with unemployment high, federal assistance running out and the state cutting spending, local government finances are deeply in the red. Lackawanna County appears headed for layoffs and tax increases.

A bipartisan advisory panel recommended Wednesday that Lackawanna County increase real estate taxes to balance its 2012 budget, warning a steep hike will be required as county government contends with a financial crisis that will not be resolved quickly or painlessly.

The Philadelphia School District, also deeply in the red, has a plan to save up to $9 million by closing nine schools.

Turning to college kids, student loan debt rose by 5% in 2010. Public colleges, faced with significant cuts in state support, raised tuition nationally by 7.3% this year. 

Third and State This Week: Rising Unemployment, a Health Insurance Rate Hike and Momentum for a Drilling Tax

This week we blogged about momentum building for a natural gas drilling tax and rising unemployment in Pennsylvania. We also featured a guest post on the need for stronger insurance rate protections in Pennsylvania. And Mark Price kept us up to date with the Morning Must Reads.

IN CASE YOU MISSED IT

  • On jobs and unemployment, Stephen Herzenberg shared his media statement on the rising jobless rate in Pennsylvania.
  • On the Marcellus Shale, Sharon Ward highlighted a recent New York Times article on the problems that have come with Marcellus Shale growth in Pennsylvania. Kate Atkins urged readers to sign a letter to lawmakers in support of a drilling tax that would generate revenue to improve schools, fix roads, train workers, and protect the environment.
  • On health care, Athena Ford of the Pennsylvania Health Access Network penned a guest post on the need for better insurance rate protections in Pennsylvania.
  • Finally, Mark Price had Morning Must Reads on the economic polarization of the 99%, the need for more accountability in charter schools, how we can boost the economy, and what budget cuts and layoffs have in common.

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

Morning Must Reads: Yes Bridges Need Repair & Little Old Ladies Are Homeless But Ask Yourself Have We Really Done Enough for the Top 1%?

With unemployment in the construction industry at record highs, interest rates low and a deep backlog of thousands of structurally deficient bridges in need of repair, now is a great time to spend money to fix stuff do nothing!

Actually, it is not really that bad; it's worse. The Pennsylvania Legislature is spending time debating changes to the state's prevailing wage statute, even though a large body of empirical research demonstrates that changes to prevailing wage laws do not lower construction costs.  Anyway, if you find yourself in Pittsburgh, make sure your car seat also doubles as a floatation device.

Third and State This Week: Gloomy Economic News, Trade Agreements and Tracking Salaries

This week, we blogged about the need for a jobs plan, an effort to make labor markets more transparent, and the negligible effect the recently passed trade agreements will have on reducing joblessness. Plus, the Friday Funny is back, with the warm words of everybody's favorite CEO, T. Herman Zweibel (extra points, if you know who that is without looking him up).

IN CASE YOU MISSED IT

  • On the recession and recovery, Mark Price addressed a Patriot-News editorial that calls for passage of the American Jobs Act but misstates the important impact that the Recovery Act of 2009 had on turning the free-falling economy around. Mark also blogged about some of the awkward facts that make it difficult to root for GE and other multinationals.
  • On unemployment and the economy, Mark compared a poll performed by the Mercyhurst College Center for Applied Politics with labor analysis done by the Keystone Research Center — both finding that roughly 1 in 4 Pennsylvania residents have had less paid work than they wanted during the last 12 months.
  • In other economic news, Mark blogged about Congress' failure to address the lack of consumer demand that is keeping unemployment high and its passage of a free trade agreement that will have a negligible impact on U.S. employment.
  • On wages and the workplace, Chris Lilienthal blogged about an online project aimed at creating a more transparent labor market. You can share and compare salaries and wages, understand your rights on the job, and look up the salaries of politicians, CEOs, athletes, and Hollywood stars.
  • Lastly, a bit of humor after a gloomy news week. Chris shared some satire from The Onion's publisher emeritus, T. Herman Zweibel, who is shocked that his repeatedly mistreated employees are in disbelief that he would move their offices to the Yukon.

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

Morning Must Reads: Wages Under Pressure and Doing Nothing Is Not an Option

It's hard out here for a cellist!

On the cusp of the opening of the orchestra's 2011-12 season, members of the ensemble approved a contract calling for a 15 percent pay cut, reducing the size of the ensemble, and replacing the defined-benefit pension with a defined-contribution plan. The deal, also ratified by the association's board of directors, was mediated under the supervision of Stephen Raslavich, chief judge of U.S. Bankruptcy Court for the Eastern District of Pennsylvania, and is subject to bankruptcy court approval. The American Federation of Musicians and Employers' Pension Fund, the $1.7 billion national plan that would be jilted by the new deal, has pledged to fight for up to $35 million it says it will be owed if the orchestra association withdraws from the fund.

Third and State This Week: Strong Revenue Growth in PA, Rising Student Loan Defaults, and Morning Must Reads

This week, we blogged about rising rates of student loan defaults, Pennsylvania's strong revenue growth early in the fiscal year, and rising poverty in the wake of recessions. We also started each day with the "Morning Must Reads," highlighting the must-read economic news and opinion of the day. 

IN CASE YOU MISSED IT

  • On higher education and unemployment, Sean Brandon blogged about the rising number of student loan defaults as young college grads find jobs harder to come by in this economy. 
  • On poverty and recessions, Chris Lilienthal shared a chart showing how the recessions of the last 30 years have driven up poverty rates in their aftermath.
  • On state budget and taxes, Michael Wood wrote about a new Pennsylvania Budget and Policy Center analysis showing that state revenue collections in the first two months of 2011-12 are running well ahead of the same two-month period last year. Mike also shared a chart showing that July-August tax collections have outperformed the same two-month period in the last five fiscal years. September revenue collections will provide a much better idea of what to expect in future months.
  • Lastly, Mark Price greeted you each daybreak with the "Morning Must Reads," highlighting current economic news and opinion. This week, Mark highlighted articles on paid sick leave, public sector employment losses, the challenges of local economic development, local area unemployment rates and the bupkis Congress is doing to spur economic recovery
More blog posts next week. Keep us bookmarked and join the conversation!
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