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Six-State Study Finds Industry Supporters Exaggerated Jobs Impact of Shale Drilling

7:50 am in Uncategorized by ThirdandState

By Chris Lilienthal, Third and State

Drilling in the six states that span the Marcellus and Utica Shale formations has produced far fewer new jobs than the industry and its supporters claim. In fact, in Pennsylvania, shale-related employment accounted for less than half a percent of total nonfarm employment in 2012 (as the figure to the right shows).

These findings come from a new report released today by the Multi-State Shale Research Collaborative — a group of research organizations, including the Keystone Research Center and Pennsylvania Budget and Policy Center, tracking the impacts of shale drilling.

As Frank Mauro, Executive Director of the Fiscal Policy Institute in New York and one of the authors of the report put it: “Industry supporters have exaggerated the jobs impact in order to minimize or avoid altogether taxation, regulation, and even careful examination of shale drilling.”

The Marcellus and Utica shale formations span six states: New York, Ohio, Pennsylvania, West Virginia, Maryland, and Virginia.

To be clear, shale drilling has created jobs, particularly in Pennsylvania and West Virginia, and cushioned some drilling-intensive areas in these states from the worst effects of the Great Recession and the weak recovery. The number of actual shale jobs created, however, is far below industry claims. Shale employment remains a small share of overall employment and has made little difference in job growth in any of the six states studied.

Natural gas development in these states from 2000 to 2008 was largely fueled by high commodity prices. As prices have declined more recently, gas drilling activity has slowed while development of higher-priced oil has accelerated.

Recent trends are consistent with the boom and bust pattern that has characterized extractive industries for decades. It also points to the need for state and local policymakers to collaborate to enact policies that serve the public interest.

You can check out the full report and press release here. We’ll be back here next week with more findings from the report.

Foodstamp Cuts Impact Families and Children in Every PA County

7:48 am in Uncategorized by ThirdandState

By Chris Lilienthal, Third and State

A major funding cut to the Supplemental Nutrition Assistance Program (SNAP) took effect November 1, impacting 1.8 million Pennsylvanians.

SNAP, formerly known as food stamps, is our nation’s first line of defense against hunger and a powerful tool to help keep families out of poverty. Benefits are modest, offering many Pennsylvania families a crucial bridge in this slow economic recovery.

The November 1 cut is the result of an expiring provision in the American Recovery and Reinvestment Act (ARRA) that temporarily boosted SNAP to strengthen the economy and ease hardship in the wake of the recession. The cut totals $5 billion nationwide for the remaining months of the federal fiscal year (November 2013-September 2014), including $183 million in Pennsylvania.

Nearly 66 cents of every dollar cut in Pennsylvania ($120 million) will reduce the benefits of households with children. Another 37 cents out of every dollar cut ($68 million) will reduce benefits for Pennsylvanians who are elderly or living with disabilities. Click here or on the map below to view how many people, households, and children are impacted by the cut to SNAP in each of Pennsylvania’s 67 counties.

PA County Map

In addition to helping to feed hungry families, SNAP is one of the fastest, most effective ways to spur the economy. Every $1 increase in SNAP benefits generates about $1.70 in economic activity. Benefits boost demand for farm produce, helping to keep our nation’s farms strong.

The cuts may force some Pennsylvanians to choose between food and other priorities. Ruth Vesa, a 78-year-old widow in Pittsburgh, said in August when the cuts were announced: “I’m very thankful for the food stamp program because it enables me to have good food to eat and not be worried about my medical prescriptions. Otherwise I would have to make a choice. Any cuts to the program would be hurtful to me personally.”

For a family of three, the cut will likely mean a reduction of $29 a month — $319 for the remaining 11 months of the fiscal year. This is a serious loss for families whose benefits, after this cut, will average less than $1.40 per person per meal. It is the equivalent of taking away 21 meals per month for a family of four or 16 meals for a family of three.

That’s the bad news. The even worse news is that additional cuts to SNAP could be on the way. In September, the U.S. House narrowly approved legislation that would cut $39 billion in SNAP funding over the next decade. The Senate has not taken up the bill.

If enacted, a cut that large would deny SNAP to approximately 3.8 million low-income people in 2014 and to an average of nearly 3 million people each year over the coming decade, according to Congressional Budget Office (CBO) estimates. Those who would be thrown off the program include many low-income children, seniors, and families that work for low wages.

Video: Don’t Let Property Tax Plan Derail PA Schools

6:37 am in Uncategorized by ThirdandState

 

By Chris Lilienthal, Third and State

The future of Pennsylvania schools — and the quality of education every child receives — is at stake in a property tax proposal in Harrisburg.

The plan to swap property taxes for higher state levies will drain billions from Pennsylvania classrooms within a few years. Over time, it increases funding inequities across districts and makes it harder for future graduates to compete in a 21st century job market.

There is a better way. Watch our new whiteboard video to see how we can strengthen our schools, make funding more equitable, and address property tax concerns. Then share the video with your friends on Facebook and Twitter.

Good schools are vital to every community and its economy. Yet the real problem, as our video explains, is that Pennsylvania trails most other states when it comes to state funding for public schools. By investing more state dollars in education, Pennsylvania can improve its schools and ease the pressure on property taxes.

In other words, we can have good schools AND help people having trouble paying their property taxes.

Death of an Adjunct

6:57 am in Uncategorized by ThirdandState

By Stephen Herzenberg, Third and State

Duquesne Campus

After 25 years of service to Duquesne Universty, an adjunct died in poverty.

Appearing earlier this month on a radio program in Pittsburgh with labor historian Charles McCollester, I heard for the first time the story of Margaret Mary Vojtko, a 25-year adjunct faculty member at Duquesne University who died recently in poverty at the age of 83.

Two and a half years ago, the Keystone Research Center released the most comprehensive state report in the United States on the rising use of adjunct faculty at colleges and universities. The numbers were sobering. Even if they cobbled together a full-time (10 courses per year) load at multiple institutions, adjunct community college faculty in Pennsylvania earned only about $25,000 annually. Contingent faculty members and instructors taught 42% of the courses at all public colleges and universities in Pennsylvania (versus 49% nationally). Most part-time/adjunct faculty members in Pennsylvania public higher education received no health or pension benefits.

Given cuts in state funding for higher education since we wrote our report, the situation is surely worse today in Pennsylvania.

How do we avoid a future in which a majority of higher education faculty earn less than a “quality” wage — a wage sufficient to give teachers time to prepare lessons, establish office hours, and provide feedback that increases student learning?

It would help if we honored the rights of part-time/contingent faculty to join a union — starting, for example, at Margaret Mary’s Duquesne. One game-changing option would give all part-time and contingent faculty at publicly funded Pennsylvania higher education institutions the freedom to form a single statewide local union. This would enable part-time and contingent faculty to negotiate statewide wage and benefit standards and working conditions consistent with teaching excellence. (This type of geographically based union that lifts up low wages and benefits in service industries that can’t relocate — because they have to be near their “customers” — is exactly what is needed to rebuild the middle class generally in Pennsylvania and the United States. See my earlier posts on fast food workers and on the 50th Anniversary of Martin Luther King’s “I Have a Dream Speech.”)

State lawmakers also need to develop — and fund — a long-term plan for paying all higher education teachers a “quality wage.” In a world both moral and rational, this could be part of a broader plan that also makes post-secondary education affordable again for students, and marries online and in-person education to lower costs while maintaining quality.

This approach starts with values — the outcomes we want for students, faculty, and taxpayers — and then uses technology, collective problem-solving, and social negotiation to create a world that honors those values. Imagine the possibilities.

The story of Margaret Mary is a sad reminder that all public policy discussion should start from values — the world we want to create and, unfortunately, the world we want to avoid.

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More Fun With Shale Jobs Numbers in Pennsylvania

6:28 am in Uncategorized by ThirdandState

By Stephen Herzenberg, Third and State

Last week, the Marcellus Shale Coalition trumpeted a new claim on the shale drilling industry’s positive impact on Pennsylvania jobs:

Raymond James analysts crunched the numbers, and between 2005 and 2012 almost 90 percent of the job growth in Pennsylvania at that time came from oil and gas jobs … That’s the highest percentage of any state, according to analysts Pavel Molchanov and J. Marshall Adkins, who based the math off data from the Bureau of Labor Statistics.

As meaningless statistics go, this is one of the more meaningless.
front page of the super mister
Here’s why: Since 2005, many states, including Pennsylvania, have created few jobs overall. Pennsylvania averaged 5,704,000 jobs in the 12 months of 2005 versus 5,746,000 for the 12 months ending August 2013 — a 42,000 increase. Given this small increase in the overall number of jobs, it doesn’t take a lot of shale jobs to account for a high percentage of this increase. In other words, 90% sounds like a lot (leaving aside whether the 90% claim is even accurate), but 90% of a small number is, well, a small number.

This leads to two other points. First, why didn’t Raymond James pick 2006? In Pennsylvania, the 12-month job average in 2006 was 5,755,000 — MORE than the most recent 12-month average number of 5,746,000 jobs. Since 2006, Pennsylvania has had no positive job growth, which might lead one to say the Marcellus Shale created infinity percent of the total growth in jobs in Pennsylvania since that year. In fact, with no overall job growth, drilling would have created infinity percent of the total job growth even if it had created just one positive job.

These 2006 calculations help answer why Raymond James started its analysis in 2005: 2005 is far enough back for overall job growth in virtually every state to be positive but small. Starting in 2006 would make the shale shares of overall job growth nonsensical in many states, including Pennsylvania (since overall growth was negative). And going back to 2003 or 2004 would increase overall job growth relative to shale job growth, and begin to convey the reality that shale is a small part of the overall economy. Nice job of cherry picking the period of analysis to fuel a preconceived narrative, Raymond James.

The second point is that Pennsylvania’s high ranking for share of jobs coming from shale since 2005 stems partly from the state’s poor recent jobs performance. If Pennsylvania’s job growth since 2010 had kept pace with national job growth over the same period, we would have roughly another 100,000 jobs today. A higher number for overall job growth since 2010 — and hence since 2005 — would make the modest number of Marcellus Shale jobs created since 2005 substantially lower than 90%.

So in a strange way the Raymond James/Marcellus Shale Coalition claim about shale job growth since 2005 is partly a celebration of Pennsylvania’s disappointing overall job growth since 2010. Does the Marcellus Shale Coalition really mean to draw attention to this?
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What’s at Stake for PA Schools in Property Tax Debate?

12:47 pm in Uncategorized by ThirdandState

By Michael Wood, Third and State

Pittsburgh Weil Public School ( PreK–5)

The latest proposal to eliminate property taxes in Pennsylvania would leave school districts with $2.6 billion less in overall funding within five years, according to an analysis from the Pennsylvania Independent Fiscal Office. Matthew Knittel of the IFO presented the findingsduring a Pennsylvania Senate Finance Committee hearing Tuesday.

The plan — proposed in both HB 76 and SB 76 — would swap school property taxes for higher state income and sales taxes, largely on individuals. The IFO, which did not take a position on the bill, compared what could be expected from the new mix of state funding to projected property tax revenue over time and tallied the fiscal impact on school districts and state government.

Much like with previous versions of this property tax plan, the numbers don’t add up. The IFO projects school districts would receive $112 million less in funding than they would have received from property taxes in 2014-15, which grows to $2.6 billion by 2018-19

The reason is fairly simple. The bills place an artificial limit (the lower of sales tax growth or rate of inflation) on how much in new income and sales tax dollars go to school districts to replace lost property taxes in future years. This is true even if those state tax collections exceed the caps, as they likely would in most years. The bill does not address how schools are to pay for increasing pension obligations, let alone costs for health care, supplies, or utilities that may increase in price faster than inflation.

Like all tax swaps, this one picks winners and losers — with Pennsylvania’s school students and the state’s future among the biggest losers.

Corporations, which pay about 30% of all property taxes and are among the largest taxpayers in many districts, would come out as big winners. Their school property taxes would be eliminated, but unlike individuals or small businesses, corporations would pay no more in state taxes. Instead, their share of school funding would be shifted to individuals and small business owners who pay income taxes and consumers who pay sales tax. (Many goods and services purchased by businesses would remain exempt from the state sales tax under this plan).

Renters, including many seniors, would see higher sales tax and income tax bills, but little “relief” in the form of lower rent payments. For low-income families, this plan is Robin Hood in reverse, with poor renters paying higher taxes to subsidize tax cuts for wealthy property owners.

For non-elderly homeowners, it’s a mixed bag. Homeowners would see their local property taxes decline, but their state income taxes would rise. Many homeowners would also see their federal taxes increase, as they would lose a deduction for paying property taxes.

Many school districts have already adopted earned income taxes to reduce dependence on property taxes. Taxpayers in those districts would pay increased state taxes to subsidize property tax cuts in other parts of the state.

The change could make houses in Pennsylvania less affordable in the future. When California adopted property tax limits, it saw housing prices skyrocket.

Many seniors and people with medical conditions would have to pay sales tax on an array of health care goods and services.

Finally, schools would receive much less than they need to help students succeed. Good schools are the lifeblood of a community and its economy. If we shortchange our schools, how will Pennsylvania ever prepare better workers for tomorrow’s economy or attract and retain businesses that need skilled workers?

Paying property taxes are a real problem for some homeowners and in some specific areas of the state. We should address those concerns with targeted reforms rather than a one-size-fits-all approach that has been adopted nowhere else in the nation. Some of the reform efforts, like Act 1 of 2006, have helped moderate property tax growth — and the IFO report reflects that. Many districts have adopted earned income taxes to lessen reliance on property taxes.

The most effective way to ease Pennsylvania’s over-reliance on local sources for school funding is to increase the state’s support of education. Pennsylvania trails most states in state funding for schools, creating tremendous inequities across districts. A good education should not depend on where a child lives. The state needs to make — and keep — a commitment to provide a larger share of school funding. That is the key to a healthier economy and a better Pennsylvania.

Health Law Saves Consumers by Requiring Insurers to Spend Premium Dollars on Medical Care

11:38 am in Uncategorized by ThirdandState

By Chris Lilienthal, Third and State

Click for a larger viewA key reform in the Affordable Care Act requires health insurers to spend 80% to 85% of premium dollars directly on medical care or quality improvement expenses as opposed to other administrative costs, marketing, or profits. If an insurer does not meet the standard, it must provide rebates to consumers or businesses.

Insurers issued $1.1 billion in rebates to nearly 13 million consumers for 2011, the first year the rule was in effect, and are expected to return more than $500 million in rebates to 8.5 million consumers for 2012. The 2012 figures include nearly $6.9 million that will be returned to 123,581 Pennsylvania consumers — an average of $77 per family.

These rebates are among the more tangible ways that consumers have benefited from the law so far, but it is important to remember, as researchers with the Kaiser Family Foundation recently noted, that rebates represent only a portion of the savings to consumers from this provision, known formally as the “Medical Loss Ratio” Rule (MLR):

The primary role of an MLR threshold is to encourage insurers to spend a certain percentage of premium dollars on health care and quality improvement expenses (80 percent in the individual and small group market and 85 percent in the large group market). The MLR rebate requirement operates as a backstop if insurers do not set premiums at a level where they would be paying out the minimally acceptable share of premiums back as benefits…

Consumers and businesses, therefore, can realize savings in two ways as a result of the MLR requirement: by paying lower premiums than they would have been charged otherwise (as a result of lower administrative costs and profits), or by receiving rebates after the fact.

Nearly 1.8 Million in PA Will See Food Assistance Cut

10:11 am in Uncategorized by ThirdandState

By Chris Lilienthal, Third and State

SNAP helps nearly 1 in 3 U.S. children get enough to eat. All of them will see their benefits cut in November.Nutrition assistance is our nation’s first line of defense against hunger and a powerful tool to help keep families out of poverty. Come November, this critical federal assistance will be cut, making it that much more difficult for 1.8 million Pennsylvanians to put food on the table for themselves and their families.

The November cut to the Supplemental Nutrition Assistance Program (SNAP), the program formerly known as food stamps, will impact all of the more than 47 million Americans, including 22 million children, who receive benefits. It will likely amount to a reduction of $29 a month in benefits for a family of three — $319 in all through September 2014. This is a serious loss for families whose benefits, after this cut, will average less than $1.40 per person per meal.

To put the cut in some perspective, the Center on Budget and Policy Priorities estimates it will equal out to 21 lost meals per month for a family of four or 16 lost meals per month for a family of three.

A majority of those who receive SNAP benefits are children and the elderly, for whom food assistance is essential. SNAP helps nearly one in three children in the U.S. get enough to eat. All 22 million of them will see their benefits cut in November.

Elderly Pennsylvanians will also be affected. People like Ruth Vesa, a 78-year-old widow in Pittsburgh and Just Harvest client, who said: “I’m very thankful for the food stamp program because it enables me to have good food to eat and not be worried about my medical prescriptions. Otherwise I would have to make a choice. Any cuts to the program would be hurtful to me personally.”

In addition to helping to feed hungry families, SNAP is one of the fastest, most effective ways to spur the economy. Every $1 increase in SNAP benefits generates about $1.70 in economic activity. Benefits boost demand for farm produce, helping to keep our nation’s farms strong.

So why is it being cut? The cut is the result of an expiring provision in the American Recovery and Reinvestment Act (ARRA) that temporarily boosted SNAP benefits to strengthen the economy and ease hardship in the wake of the recession. This small increase has been a lifeline for many Pennsylvanians, a majority of whom work but earn low wages. It has allowed them to stay afloat during the worst economic crisis since the Great Depression.

Even though the economy is still weak and families are still struggling, Congress has not acted to extend the modest increase in nutrition assistance beyond November. In fact, the U.S. House of Representatives could vote on cutting the program by $20 billion or more in the coming weeks. If enacted, such cuts could leave many families and their children without assistance to put food on the table when they need it most.

That is the wrong path for the wellbeing of our nation, the health of our families, and the growth of our economy.

‘This Is What the Middle Class Looks Like’

9:09 am in Uncategorized by ThirdandState

By Stephen Herzenberg, Third and State

"This Is What Democracy Looks Like"

But what does a real middle class look like?

“This is what democracy looks like.” Even though this chant originated with the Seattle protests against the World Trade Organization (WTO), which haven’t yet led to major reforms, the phrase nonetheless captures the idea of a social movement that has crystallized its demands and has a better chance to succeed because of it. Other examples include the right to vote in the civil rights movement, or the fight to legalize gay marriage, a simple modern demand that culminates a fight for equality in all its dimensions.

One challenge in the U.S. fight for economic justice since inequality began to yawn wider in the 1970s has been the lack of a simple demand that either working people or elites thought could bring back the middle class. Having such a demand fuels social movements because it gives members of the movement confidence — conviction — that there is a way for the world to give them what they want. It also fuels social movements because it gives the broader society a way to let the protesters get a win.

The fast food workers engaging in one-day strikes across the country may be on the verge of crystallizing a simple demand to which their low-wage employers could accede — and, in the process, cracking the code to the next U.S. middle class.

Today’s story on these strikes in The New York Times says that the organizers aren’t actually clear yet on the path to victory. The demand is a $15-per-hour wage — a ticket to the middle class. But will progress result from a higher minimum wage, local living wage requirements for big chains, or companies themselves raising wages to get off the front page? (This is where you say in your best pompous pundit voice, “Well, ah, um, cough, good question.”)

Because these protesters have a practical, confident vision of the end point they want — an economy that pays lower-wage workers a middle-class wage (so what if Big Macs cost 50 cents more) — they have a good chance of finding the mechanism that can get them there and keep them there (or forcing the rest of us to figure out the mechanism).

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Diversion Politics and Factual Errors with ‘Americans for a Tiny Sliver of Rich People’

11:32 am in Uncategorized by ThirdandState

SNAP - Foodstamps

The latest part of the safety net under Koch attack.

Jennifer Stefano, the Pennsylvania director of Americans for Prosperity, published an op-ed in the Harrisburg Patriot-News Friday — the latest salvo in an organized right-wing assault on nutrition assistance and other safety net spending.

The op-ed claims that the number of Americans who receive some kind of subsidized food assistance is at more than 101 million and “has surpassed the number of full-time private-sector workers in our country.” Actually, there are 114 million private-sector workers in the United States, according to Bureau of Labor Statistics data for June 2013, but who’s counting.

Americans for Prosperity is a conservative advocacy group funded in part by the Koch Brothers. It is the 1% looking out for the interests of the 1%.

As I noted, Jennifer Stefano’s op-ed is part of a larger campaign to cut safety net spending. Food stamp spending in the current slow economy has temporarily risen to about 0.5% of GDP, from about 0.33% of GDP in the early 1980s recession. Of course, that recession was much shorter and shallower nationally than the recent Great Recession.

Today food assistance remains well targeted: 85% of households participating in the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, have gross incomes below the poverty line; 98.5% have disposable (or “net”) incomes below the poverty line. SNAP provides only $1.50 per person per meal and is scheduled to drop to $1.30 per person per meal in November. (Stefano has nothing to say about the preservation of farm subsidies for agribusiness — the most generous “food program” in the United States.)

Stefano presents the temporary growth in food assistance as a “kitchen table” issue. Let’s put it in perspective. Another kitchen table issue is the dramatic decline in the share of the economic pie going to the vast 99% of Americans — because the share going to the top 1% has risen by about 10 percentage points, The temporary increase in food stamps spending is thus about 1/50 the size of the not-so-temporary increase in the share of income going to the Koch Brothers and, I’m guessing, other funders of Americans for Prosperity.

Stefano’s piece is part of a well-oiled effort to distract middle-class families from the real cause of their economic struggles. When you look at the facts, that cause is not rising taxes or spending on social programs. It’s the rise in economic inequality (and, to a lesser degree, the fall in taxes paid by the more affluent).

Here’s hoping that Pennsylvanians and Americans will keep their eyes on the ball and not fall for the obfuscations of groups like Stefano’s.

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