Paid Sick Days Can Help Make Philadelphia a High Road City of Opportunity

Last week, I wrote that when you look at the positive benefits and the low costs of Philadelphia’s proposed paid sick days legislation, it could end up paying for itself.

As I wrote that, I could almost hear a collective gasp from neoclassical economists: “If it paid for itself, employers would already do it!”

Third and State This Week: Teacher Salaries, Legislative Updates & Paid Sick Leave in Philadelphia

This week at Third and State, we blogged about teacher salaries and a paid sick leave bill in Philadelphia City Council, along with providing legislative updates on efforts to cut unemployment benefits in Pennsylvania and advance a state budget with deep cuts to education and human services.

IN CASE YOU MISSED IT

  • On workplace issues, Steve Herzenberg takes apart an analysis by an economist for the National Federation of Independent Business that vastly overstates the impact of a paid sick leave bill now before Philadelphia City Council.
  • On unemployment insurance, Mark Price reports on the defeat of an anti-worker unemployment compensation bill in the state House, and has a follow-up post with data on income in York County to explain what is at stake when politicians tinker with unemployment.
  • On the state budget, Chris Lilienthal writes about House passage of a state budget that cuts $1 billion from public schools and reduces Governor Corbett's budget by $471 million for health and human services for women, children and people with disabilities.
  • Finally, on education, Steve Herzenberg highlights a project that is educating Americans on the relatively low teacher pay in this country compared to the most successful educational systems in the world.

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

The Safety Net Is a Good Thing: York County Edition

While we celebrate the rejection of House Bill 916 this week, we should remember what is at stake when politicians tinker with the safety net. The figure below presents the annual percent change in personal income and personal income minus transfers (a proxy for market-based incomes) in York County. (Rep. Scott Perry, the sponsor of House Bill 916, represents portions of York and Cumberland counties).

A bit more explanation: personal income minus transfers is a proxy for incomes generated in the market-based economy, so as people in York County lost jobs in the 2001 and 2007 recessions, there were steep declines in market-based incomes. 

Personal income, which includes transfers like unemployment insurance, either fell less or not at all during the last two recessions in part because those who lost jobs had at least some of their income protected by the unemployment insurance system. (Pennsylvania's unemployment insurance system replaces a little over half of your lost wages.) In the absence of such protection, many families in York County would have lost all of their income in the recession. 

Unemployment insurance, thus, gives these families a temporary and modest lifeline to weather the recession, allowing them to pay their mortgages and other essential expenses until they find a new job. In this way, the benefits of unemployment insurance extend beyond individual recipients into the local community by preventing additional layoffs and home foreclosures.

House Bill 916, which failed by a vote of 79-122, would have cut unemployment benefits by about 20%. Unemployment in York County remains high at 7.2%. Even though the economy in Pennsylvania is in the midst of a robust recovery adding more jobs than it is losing each month, new workers are still being added to the unemployment insurance rolls each month. With unemployment so high, many of these newly jobless workers will be unemployed longer because the competition for new jobs is so fierce. House Bill 916 would have made the financial situation of many of these workers and their families more precarious.

Using NFIB Economist’s Estimates on Paid Sick Days: It’s Not Cricket

As a kid living near Manchester in the north of England, my first love was cricket. The sport (it is a sport) comes up nowadays when I use the phrase “it’s not cricket” — as in, it’s not acceptable, it’s not done.

In a report circulated to Philadelphia City Council and the media (but not online that I can find), Dr. William Dunkelberg estimated the cost to employers of enacting paid sick days legislation in Philadelphia. Even if you oppose paid sick days, you shouldn’t use the Dunkelberg estimates because, well, “It’s not cricket.” The estimates are so transparently inflated that folks who live in a fact-based world shouldn’t use them.

Pa. House Approves $27.3 Billion Budget

The Pennsylvania House of Representatives voted 109-92 Tuesday to approve a state budget that sets spending at $27.3 billion for the 2011-12 fiscal year — the same amount proposed in Governor Tom Corbett's March budget plan.

The budget cuts $1 billion from public schools and reduces Governor Corbett's budget by $471 million for health and human services for women, children and people with disabilities. It fails to enact a drilling tax on natural gas and leaves untouched a $500 million state revenue surplus.

Pa. House Rejects 20% Cut to Unemployment Benefits

In a victory for working Pennsylvanians, the state House rejected legislation today that would drastically cut unemployment benefits.

House Bill 916 would have lowered average weekly benefits from $324 to $277 and cut benefits overall by more than $632 million annually. That would have amounted to a 20% cut in benefits for out-of-work Pennsylvanians.

The House defeated the bill in a preliminary vote of 79-122 before final passage. Thirty-two Republicans joined all Democrats to vote no on the bill.

House leadership could force another vote on the measure later on, but today's vote signals a bipartisan opposition to what would have been the single largest cut in unemployment benefits in Pennsylvania history.

Last week, we urged lawmakers to vote against this bill. So have many other working Pennsylvanians. Apparently, House lawmakers are listening.

Teacher Salaries and the Medieval Bloodletting of the Public Schools

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Many people know Dave Eggers for his entertaining first book A Heartbreaking Work of Staggering Genius. It's the story of the death of both his parents from cancer within a matter of months, and Eggers' subsequent raising of his younger brother to adulthood.

A few weeks ago, a New York Times op-ed, "The High Cost of Low Teacher Salaries," introduced me to the efforts of Eggers and his colleagues to educate the public on the need to elevate the status and salaries of teachers. The op-ed starts with a compelling analogy: when the U.S. runs into challenges in military conflicts, it doesn't start pointing fingers at men and woman fighting in the trenches for low pay and little recognition. Instead, we ask questions about the performance of military leaders and whether we are providing training and supports that give soldiers a chance to succeed.

Third and State This Week: Pa. Job Numbers, Drilling Tax Plans & Getting Cheeky with Tax Data

This week at Third and State, we had a podcast on Pennsylvania's April job numbers, a three-part series on dishonest claims about taxes, an overview of several natural gas drilling tax plans, and a quick visit to Ohio.

IN CASE YOU MISSED IT:

  • On jobs and the economy, Mark Price has a podcast explaining Pennsylvania's April job numbers, what it means for the recovery and why a bill in the state House aiming to cut unemployment benefits could set things backs.
  • On state and federal taxes, Mark also wrote a three-part series playfully titled "Getting Cheeky with Tax Data." In it Mark sheds some light on misleading claims about the impact of state and federal taxes on businesses and how many of them avoid paying taxes. Read Part 1, Part 2 and Part 3.
  • On the Marcellus Shale, Michael Wood takes stock of several natural gas drilling tax plans now before the Legislature.
  • Finally, on income inequality, Stephen Herzenberg shares an Ohio colleague's article voicing the outrage of many people there, as new Governor John Kasich takes a state and a middle class that are down and gives them a good hard kick.

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

Podcast: The Takeaway from Pennsylvania's April Jobs Report

Before you head to your weekend, watch my four-minute podcast explaining the April job numbers report for Pennsylvania, what it means for the economic recovery, and why a bill in the state House aiming to cut unemployment benefits could set things backs.

Getting Cheeky with Tax Data, Part 3

This is the final part of three-part series running this week on Third and State.

On Wednesday, we highlighted the flaws in a Wall Street Journal editorial that was caught being, shall we say, less than truthful in its presentation of data on taxes.

Then, yesterday we wrote about conservatives here in Harrisburg, like the Commonwealth Foundation’s Nathan Benefield and Jonathan Humma, who want to make the case that Pennsylvania's business climate is bad because of taxes, ergo we should cut corporate taxes and shift more of the tax burden away from the wealthy and onto the rest of us.

Richard Florida has a piece at the Atlantic reviewing the relationship between "business tax competitiveness" and various measures of state level economic performance where he concludes:

The bottom line is this: Lower state investment tax burdens aren't associated with stronger state economies, and higher investment tax burdens aren't associated with worse ones. Tax cuts may be an effective political strategy and lowering business and investment taxes may appeal to corporate interests and attract campaign contributions, but they have little relation to state economies.

And don't forget that in Pennsylvania, middle-income taxpayers already pay more of their income in state and local taxes than the wealthy do.

This all reminds me of a great Upton Sinclair quote:

It's difficult to get a man to understand something, when his salary depends upon his not understanding it!

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