By Mark Price, Third and State

Photo by Davidd

Happy Sunny Friday, people! Now for the not so good news. The job numbers for Pennsylvania came out Thursday, and the overall picture was somewhat disappointing. The unemployment rate edged down slightly to 7.4% and nonfarm payrolls declined by 600 jobs. Focusing on the jobs data, the biggest loser in April was construction, which shed an eye-popping 5,400 jobs. That is a big swing at a time of year when construction projects should be ramping up. Odds are that loss is driven by sampling error rather than real trends in construction activity. Another troubling stat was the loss of 1,700 jobs in the public sector.

Because monthly data are somewhat erratic, you shouldn’t make too much out of any one-month change in employment overall or within a sector. Looking at nonfarm payrolls since October, the jobs picture is somewhat brighter with Pennsylvania adding, on average, 3,900 jobs a month. So Pennsylvania’s labor market, like the national labor market, is continuing to recover.

Now for the bad news: if you were hoping the Pennsylvania economy would finally return to full employment by 2015 (remember, the recession started in December 2007), nonfarm payrolls need to grow by about 10,000 jobs a month. So by that metric, we are a long way from fully recovering from the worst recession since the Great Depression.

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A blog post by Stephen Herzenberg, originally published at Third and State.

Let me connect three dots for you. Draw your own conclusions about the impact of Pennsylvania Senator Pat Toomey’s proposal in the super committee to reduce the federal deficit.

Dot Number 1 — The American middle class is shrinking: The New York Times reports this morning that the middle class is shrinking in America — based on where people live.  In 2007, the latest year studied, 44% of families lived in middle-income neighborhoods, down from 65 percent of families in 1970. A third of families lived in very high-income or poor neighborhoods now, up from just 15 percent of families in 1970. The case example used to illustrate this national trend — the Philadelphia metropolitan area.

Dot Number 2 — Toomey proposes to increase after-tax inequality further: In the super committee, Congressional Republicans, led by Senator Pat Toomey, have advanced a plan that they say would raise revenues by closing tax loopholes and eliminating tax breaks while cutting spending by $1.2 trillion. But a closer look shows that, of $3.5 trillion raised by the elimination of loopholes and tax breaks, $3.2 trillion would lower tax rates for the wealthiest. The plan would lower taxes at the top a lot more than simple extension of the Bush tax cuts for the very rich. So the impact of Senator Toomey’s proposal would be to increase economic inequality after taxes: affluent families would pay less in taxes and the middle class and the poor would face cuts in Social Security, Medicare, and other social programs.

Dot Number 3 — High inequality undercuts core American values (opportunity, democracy) and weakens our economy: High levels of economic inequality — such as now exist in the United States — undermine intergenerational mobility (also known as “the American Dream”). (For evidence, see the links in this earlier blog post on inequality or this one or see this online video by Richard Wilkinson.) Such inequality also contributes to the erosion of political democracy — shifting the country further from one person, one vote towards one dollar, one vote. And, third, high levels of inequality undermine economic and productivity growth. Let’s process that again: the end of the American Dream; the erosion of democracy (wasn’t America — and Pennsylvania — the birthplace of democracy?); and a weaker economy. Three strikes and you’re out.

Question Number 1 — Why? On a day when a national newspaper is using Philadelphia to illustrate the erosion of the middle class, why is Senator Toomey championing ideas that threaten the most cherished American values (opportunity, democracy) and the country’s future living standards? You’d have to ask him.

A blog post by Mark Price, originally published at Third and State.

Catherine Rampell of The New York Times has posted results from a UK think tank tracking trends in overall economic growth and median pay from 2000 to 2007 in 10 countries. As Rampell explains:

A higher ratio means that the pace of growth for median pay was close to the pace of growth for output per capita. A low ratio means that median pay grew much more slowly than did the economy as a whole.

Of the 10 countries analyzed, Finland showed the closest relationship between the living standards of the typical worker and improvements in the overall economy.

The United States was on the lower end. From 2000 to 2007, median pay increased at a quarter of the pace of output per capita. In other words, the typical American worker did not share much in the country’s growing wealth even when the economy was good.

Below I reproduce the figure Rampell posted but with Pennsylvania data added in. When the economy was strongest here in Pennsylvania, wages for the typical Pennsylvania worker grew at a quarter of the pace of output per capita in the state. When it comes to trends in inequality, Pennsylvania is America.

A blog post by Stephen Herzenberg, originally published at Third and State.

Last Friday evening, I was asked to lead a Saturday afternoon “teach-in” on inequality to Occupy Harrisburg. Shortly after receiving this request, I got an email about a talk on income inequality that Eric Cantor, the Majority Leader of the U.S House of Representatives, had been scheduled to give Friday at the University of Pennsylvania.

Cantor canceled his talk at the eleventh hour, saying that he had only just learned his lecture would be open to the public. Cantor’s prepared remarks, however, were published by The Daily Pennsylvanian.

Cantor’s remarks were a refreshingly honest discussion of opportunity in America and what he, a leading conservative, has to say on the issue. So I decided to make my introductory remarks to Occupy Harrisburg a take-off on and response to Cantor’s text. See who you think gets the better of the argument by reading my remarks and Cantor’s.

After I delivered my prepared remarks, I spent an hour in a very enjoyable back and forth with the audience. In my experience giving talks and teaching students at leading universities, I have rarely met such an informed and thoughtful group.