From Keystone Research Center (http://www.keystoneresearch.org):
HARRISBURG — Today the Keystone Research Center released its annual State of Working PA report.
Stephen Herzenberg, economist and executive director of Keystone Research Center, broke down the latest numbers on the Pennsylvania economy from the perspective of working families. He highlighted the deep impact of the coronavirus on jobs and unemployment; how the current economic crisis has laid bare stark inequalities in Pennsylvania, including by race; and reviewed the pivotal importance of getting federal and state policies right to mitigate the economic fallout from COVID.
Herzenberg said, “Within Pennsylvania, the increases in unemployment also follow a pattern that reflects the distinct character of this recession. Rather than increasing more in rural areas, as with prior recent recessions, unemployment has increased more in counties with higher COVID rates. This underscores the importance of reining in the virus so that businesses and people feel safe restarting the economy.”
This recession has brought with it a cruel triple whammy that mostly harms many vulnerable workers, including low-wage workers, women, and people of color.
- First, the industries forced to shut down to allow social distancing—restaurants, bars, and in-store retail—disproportionately employ women and workers of color.
- Second, essential workers that have continued working and endured increased health risk because of the importance of their industries to the general population—such as health care, grocery stores, and distribution—are nearly two thirds female, one half more Black, and slightly more Hispanic than the Pennsylvania workforce as a whole.
- Third, many immigrants and their families, despite risking their lives for the rest of us, have been denied access to pandemic social benefits.
Since workers’ buying power drives the economy forward, when their incomes stagnate so does the economy. In the short run, to avoid a downward spiral of the economy into depression, we need another injection of federal relief that puts money in the pockets of people who will spend it:
- Extension of the $600 per week boost in unemployment benefits.
- More relief for state and local government. Without this, deep cuts in government jobs and a collapse in the buying power of public employees will drag the economy into deeper recession.
- A stimulus that invests in infrastructure and reducing carbon emissions, work performed outside and with less risk of triggering further upticks in COVID-19 cases.
With Pennsylvania, the state should
- Identify shovel-ready projects that could absorb likely federal stimulus investments in infrastructure, universal high-quality broadband, and reducing carbon emissions.
- Capitalize on federal subsidies for work sharing—reduced work hours and partial unemployment benefits. Work sharing gives workers more income than if unemployed, helps businesses bounce back when the economy kicks into gear, and can lower unemployment in future recessions
Long-term, the modest wage gains from 2006 to 2019 documented in this report remind us that the policies and wage-setting institutions in place today—rigged heavily against working people—result in rising inequality, including based on race. Achieving shared prosperity that can end low growth due to slowly growing incomes requires structural changes that rebalance the scales between workers and corporations. In conclusion, Herzenberg added, ” State and federal lawmakers should make strengthening workers’ rights a top priority so that we can achieve the economy we want—one that works for all—not the economy we’ve had.”
The full report is available at https://krc-pbpc.org/research_publication/the-state-of-working-pennsylvania-2020/.
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