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Economy Improving While Wages Shrink

Over the last decade, Pennsylvania’s economy grew. However, the average PA family is now earning less than they would be at the turn of the 21st century.

This new information comes from the left-leaning Keystone Research Center’s annual State of Working Pennsylvania report.  According to the report, the state's economic growth could have supported a rise in living standards for all Pennsylvania workers, but a disproportionate amount went to the top one percent of earners.

Mark Price, co-author of the report, says the average four person family now makes $6,136 less than they would have in 2000.

“In other words, that typical four person family, right there in the middle of income distribution,  was actually worse off in the decade from 2000-2010, and that’s a departure from the typical pattern in U.S economic history,” Price said.

Pennsylvania's unemployment rate for July was 7.9%, up three tenths of a percentage point from the previous month.  It's the 69th straight month that the commonwealth's jobless rate has been at or below the national rate.  But the center's executive director Stephen Herzenberg said last month's rise in unempolyment and an uneven growth in wealth is because of poor choices.

“Policy makers are hitting the economic brakes when they should be hitting the accelerator,” Herzenberg said. “Policymakers are also tilting the rewards of economic growth to the top. Fix those problems and we can have broadly shared prosperity again.

While previous reports stated Pennsylvania had a higher amount of jobs over other states post-recession, this most recent report has shown that advantage to have slipped. According to the center, budget cuts across the state cost 25,000 teachers, first responders, and other public servants their jobs in 2011, pushing Pennsylvania from the top 10 states for job production down to 38th, one spot behind Connecticut.

This is due in part to a statistic that measures the job deficit, or the amount of jobs needed to reach full employment. According to Price, Pennsylvania’s job deficit predicts poor employment rates for the foreseeable future.

“One of the more grim facts from the past year is that the jobs deficit has actually increased in the last 12 months by roughly 74,000 jobs,” Price said. “So essentially, the Pennsylvania labor market is not performing very well.”