Wages

Third and State This Week: States Cutting Budgets, the Debt Ceiling Debate, and a Middle Class 'Under Attack'

This week, we blogged about the looming debt ceiling crisis in Washington, how state budget cuts will hurt the economic recovery, Marcellus Shale job claims, a new report on the middle class in Pennsylvania and more.

IN CASE YOU MISSED IT

  • This week was a busy one for Mark Price, who penned four of our five blog posts. On the Marcellus Shale, Mark corrected an inaccurate figure in a recent Wall Street Journal piece about jobs created in Pennsylvania from Marcellus Shale drilling.
  • On the economy, Mark wrote about a recent report from the Keystone Research Center and the national policy center Demos on a middle class that is "under attack" in Pennsylvania. He also blogged about a new policy brief analyzing Pennsylvania's June jobs report.
  • On the federal debt ceiling debate, Mark shared his op-ed on this "manufactured crisis" which ran on FoxNews.com this week.
  • Finally, on the state budget, Chris Lilienthal highlighted a new report from the Center on Budget and Policy Priorities finding that at least 38 of 47 states are cutting K-12 education, higher education, health care, or other key public services in 2012. According to the report, this cuts-only approach that most states have taken will slow the recovery and weaken the nation’s economy over the long term.

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

The Middle Class ‘Under Attack’

At the Keystone Research Center, we have been chronicling for years the forces that are putting a tighter and tighter squeeze on middle-class Pennsylvanians.

Last week, we released a new report in partnership with the national policy center Demos that takes the temperature of the state's middle class in the wake of the Great Recession. I'm sorry to say, once again, the patient is not well.

The state's annual unemployment rate is the highest it has been in nearly three decades and the cost of going to college is on the rise.

According to the report, times are particularly tough for Pennsylvania's young people, with state budget cuts to 18% of public university funding and a 7.5% tuition hike in Pennsylvania's State System of Higher Education. Pennsylvania's young people already bear the seventh highest rate of student debt in the nation — at approximately $28,000 on average.

Your Job or Your Hours

Chaquenya JohnsonBy Chaquenya Johnson, Intern

When the economy is hit by a sudden drop in demand, employers typically react by cutting employment or hours of work — sometimes both.

In Case You Missed It: Third and State Blog for Week of April 4

This week, we blogged about oppressive regimes and income inequality, what the top CEOs are making these days and calls this week for state lawmakers to grow the revenue pie. 

IN CASE YOU MISSED IT:

  • On wages, Stephen Herzenberg wrote that median CEO pay in 2010 rose 27%, compared to a 2.1% increase in the compensation of workers in private industry. And in light of recent discussion about public-sector pay, he pointed out that the two highest-paid CEOs in Pennsylvania earn a lot more than the 100 top-paid public-sector workers.
  • On income inequality, Chris Lilienthal shared highlights from a Vanity Fair article by Nobel Laureate Joseph Stiglitz on income inequality in the U.S. Stiglitz writes that, in light of recent turmoil and protests in Egypt, Libya and other oppressive regimes, growing income inequality in the U.S. should be a concern for the rich as much as the rest of us.
  • Finally, Sharon Ward posted a short video highlighting an event this week in the state Capitol that brought college students, advocates for domestic violence victims, educators and more out to deliver pie to state lawmakers.

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

CEO Pay Soars While Workers’ Pay Stalls

USA Today reported last week that median CEO pay in 2010 rose 27%, compared to a 2.1% increase in the compensation of workers in private industry. (I’m guessing this is average compensation. The median compensation increase for typical workers would be lower.)

The highest-paid CEO was Viacom’s Philippe Dauman, who drew down a cool $84+ million, including $70 million in “stocks and options.”

Oppressive Regimes and Income Inequality

Joseph Stiglitz, a Nobel Laureate in economics, has a great essay in the latest issue of Vanity Fair explaining why excessive income inequality in the United States is a problem for everyone — rich and middle-class Americans alike.

In his essay, appropriately titled "Of the 1%, by the 1%, for the 1%," Stiglitz explains that the top 1% of American earners take in a quarter of the nation's income each year and that they control 40% of the nation's total wealth. Just 25 years ago, the top 1% took in 12% of the nation's income and held 33% of its wealth.

In Case You Missed It: Third and State Blog for Week of March 28

Senator Jeff Piccola expanding school vouchers concept to include Pennsylvanians trapped in low-performing families? A state worker stunned to learn her mid-level administrative job is no pathways to riches? A Corbett speechwriter struck with a rare illness afflicting writers of overwrought clichés?

Either it's a particularly zany news day — or it's the first of April!

In Third and State's Friday Funny, we pass on an April Fool's take on the latest un-news coming out of Harrisburg. (Our thanks to a loyal blog reader for passing this one along.)

In other news this week, we blogged about the taxes gas drillers do (or don't) pay, why the minimum wage matters, imaginative tax avoidance strategies, and much more! 

IN CASE YOU MISSED IT:

  • For much of the week, it was the Mark Price Show at Third and State. On wages, Mark explained just how much the minimum wage matters and why the failure of policymakers to peg it to growth in productivity (or even inflation) has had a wide-ranging impact on American society.
  • On jobs and unemployment, Mark blogged about imaginative tax avoidance strategies at work at General Electric.
  • And on fiscal and monetary policy, Mark wrote about the Federal Reserve's policymaking role and why it is so important to the economic recovery.
  • Finally, Michael Wood has a post on the taxes that natural gas drillers in the Marcellus Shale are (or are not) paying.

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

The Minimum Wage Matters

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On Thursday, the Mid-Atlantic office of the Bureau of Labor Statistics released its latest estimate of the number of workers in Pennsylvania earning at or below the current federal minimum wage of $7.25 an hour.

In Case You Missed It: Third and State Blog for Week of March 21

This week on Third and State, we blogged about Marcellus Shale trickle down economics, the Affordable Care Act's first birthday, unions and inequality, and much more!

In case you missed it:

  • On the Marcellus Shale, Mike Wood notes that trickle down economics is not helping the local communities across Pennsylvania hosting increased natural gas drilling.
  • On health care, Chris Lilienthal highlights a "consumers' hearing" in the State Capitol Rotunda on the one-year anniversary of the Affordable Care Act's passage. The hearing presented the perspective of Pennsylvanians who have benefited from the law - a perspective that was omitted from a congressional hearing on the landmark law also held at Pennsylvania's State Capitol this week.
  • On federal tax issues, Chris blogs about an interview on WHYY's Fresh Air that explained some of the accounting gimmicks that large corporations use to shelter income overseas and avoid as much as $90 billion a year in U.S. taxes.
  • On wages and income inequality, Mark Price shares research documenting that in economies where more people are covered by unions, there is less inequality.
  • Finally, Mark has this week's Friday Funny: The Daily Show's Jon Stewart takes on new governors, mean stepdads and confusion within the administration of Maine's new governor about what exactly a mural is.

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

Where There Are Unions, There Is Less Inequality

I highly recommend you spend some time checking out the website for The State of Working America, the annual checkup on the health of the middle class produced by the Economic Policy Institute. 

One of the interesting graphics researchers put together for this year's edition was a scatter plot of union coverage and inequality in advanced economies.

Unions compress the wage distribution and, thus, reduce inequality. As a result, the more people who are covered by unions in an economy, the less inequality that economy has.

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