STATE OF WORKING

PENNSYLVANIA2016

byStephen Herzenberg

Mark Price

The Keystone Research Center (KRC) was founded in 1996 to broaden public discussion on strategies to achieve a more prosperous and equitable Pennsylvania economy. Since its creation, KRC has become a leading source of independent analysis of Pennsylvania’s economy and public policy. KRC is located at 412 North Third Street, Harrisburg, Pennsylvania 17101-1346. Most of KRC’s original research is available on the KRC website at www.keystoneresearch.org. KRC welcomes questions or other inquiries about its work at 717-255-7181.

About the Authors Mark Price, KRC’s labor economist and research director, holds a PhD in economics from the University of Utah. He is a coauthor of Income inequality in the U.S. by state, metropolitan area, and county, published in 2016 by the Economic Analysis Research Network (EARN).

Stephen Herzenberg, KRC’s executive director, holds a PhD in economics from MIT. He is a coauthor of Losing Ground in Early Childhood Education, published in 2005 by the Economic Policy Institute (EPI), and New Rules for a New Economy: Employment and Opportunity in Postindustrial America, published in 1998 by Cornell/ILR Press.

Acknowledgments The authors thank the team at EPI, which provides support to KRC and the other state think tanks within EARN; this team includes Dianne Stewart, David Cooper and Janelle Jones. Thanks to Estelle Sommeiller of the Institute for Research in Economic and Social Sciences (IRES) for her work to update the state-by-state top income series. Thanks to John Neurohr, communications director for KRC and its Pennsylvania Budget and Policy Center (PBPC), for editorial assistance and guidance, and to Stephanie Frank, KRC office manager, for designing the cover page, laying out the report and generating the charts and figures in the report. The authors also thank Irwin Aronson, Sandy Strauss, Joan Duvall-Flynn, Alison Ocmand, Bill Dando, Eric Elliott, Delores McCracken, and the rest of the KRC Board of Directors for their helpful suggestions on this report.

Support KRC The work of KRC is supported by grants from charitable foundations, research contracts with various organizations (including local, state, and federal governments), and contributions from organizations and individuals who share KRC’s vision of broadly shared prosperity in Pennsylvania. To learn how you or your organization can support KRC, please visit the KRC website at http://keystoneresearch.org or call 717-255-7181. The IRS has designated KRC as a federal tax-exempt, nonprofit, 501(c)(3) corporation. KRC is also registered as a charitable organization with the Pennsylvania Department of State’s Bureau of Charitable Organizations. KRC’s official registration and financial information may be obtained from the Pennsylvania Department of State by calling toll free, within Pennsylvania, 1-800-732-0999. Registration does not imply endorsement.

Contents Executive Summary ...................................................................................................................................................3

The Wages of Stagnation ...........................................................................................................................................5

Non-College Male Wages Plunge 15 Percent .........................................................................................................6

Wage Stagnation Spreads to College Graduates ....................................................................................................8

College-Educated Women’s Wages: You Have Come a Long Way but It’s Still a Man’s World .............................9

Non-College Women: A Smaller Wage Plunge but Still Earning Less .....................................................................9

Wage Trends by Decile 1979 to 2013 .................................................................................................................. 10

Productivity Growth vs. Compensation Growth ................................................................................................. 11

If Productivity Is Up but Compensation Is Not Where Did All That New Income Go? ........................................ 11

The Agenda to Raise Pennsylvania’s Pay ............................................................................................................... 12

I. Establish a Vision and Action Plan for Raising Pennsylvania’s Pay .............................................................. 13

1. Establish a “Jobs That Pay” task force and action plan ........................................................................... 13

II. Enact Policies to Directly Boost Pay ............................................................................................................ 13

2. Raise the state minimum wage ............................................................................................................... 13

3. Raise sectoral pay levels in caregiving, trucking and manufacturing ...................................................... 14

4. Promote state and local earned sick leave and paid family leave .......................................................... 14

5. Enact a predictable scheduling law to stabilize the pay of low-wage workers ....................................... 15

6. Consider the need for long-term policies to raise pay and reduce work time if “the robots are coming”

15

III. Strengthen Worker Voice and Promote High-Road Business Strategies ................................................ 15

7. Strengthen worker voice and collective bargaining rights ...................................................................... 15

8. Support strong enforcement of labor standards including the new federal overtime rule ................... 16

IV. Boost Job Growth and Reduce Unemployment ...................................................................................... 17

9. Invest in Pennsylvania’s infrastructure ................................................................................................... 17

10. Invest adequately and equitably in schools, restoring public sector jobs lost in 2011-14. ................. 17

11. Implement a “Bring Good Manufacturing Jobs Back to Pennsylvania” Strategy ................................ 17

12. Ban the box .......................................................................................................................................... 18

13. Subsidized jobs .................................................................................................................................... 18

V. Retain and Grow Family Supporting Careers .............................................................................................. 18

14. Expand use of work sharing ................................................................................................................. 18

15. Expand training linked to careers that pay .......................................................................................... 18

VI. The Top 1 Percent .................................................................................................................................... 19

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16. Make the Pennsylvania tax system fairer ............................................................................................ 19

The Agenda to Lower Pennsylvania’s Pay .............................................................................................................. 20

So What’s It Gonna Be? .......................................................................................................................................... 21

End Notes ................................................................................................................................................................ 22

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Executive Summary This is a divisive time in America. One contributing factor is nearly 40 years of economic stagnation, with some workers, families and communities going backwards economically. Particularly when political leaders fail to offer those hurt by a restructuring economy a realistic promise of better days, anger and despair can spread and undermine the fabric of our society. Some may even be lead to resent “other” groups—to think that their lack of progress results from the undue gains made by another group. The State of Working Pennsylvania 2016 documents the reality of difficult economic times for many groups. It tells a fairly simple story: most Pennsylvania workers have shared little of the economic gains of the last four decades because a tiny slice at the top has garnered so much of those gains. Whatever group people see themselves belonging to, in many cases that group has not done well. But our numbers also validate that most of those “other” groups have not done well either. The data show that if you think some “other” group is unfairly receiving some of the economic well-being that is rightfully yours, you are mostly wrong—unless that “other” group is the highest-income 1 percent. Below are some of our main findings. Even today, the largest group of Pennsylvanians—seven out of 10 working-age adults1—have less than a bachelor’s degree. For men and women, this largest group has gone backwards substantially since the end of the 1970s.

White men without a bachelor’s degree experienced a dramatic decline in their wages in the early 1980s in Pennsylvania from which they still have not recovered. The inflation-adjusted median wage for white Pennsylvania men without a four-year degree in 2013-15 remained $2.18 per hour below the 1979-81 level, which is $4,500 less per year for a full-time, full-year worker.

Black men without a four-year college degree experienced a similar decline in dollars, earning $3.90 less per hour in 2013-15 than in 1979-81, and a larger decline in percentage terms. Black men without a four-year degree now earn 75 percent as much as their similarly educated white counterparts.

Both white and black Pennsylvania men without a bachelor’s degree have also experienced an alarming decline in their labor force participation:

o Just over one fifth (21 percent) of adult working-age white men (age 18 to 64) in this group do not participate in the labor market (work or actively look for work).

o Just over one third (34 percent) of black men do not participate in the labor market.

White and black women without a bachelor’s degree did better than their male counterparts, but women’s median earnings remain far below men’s. White women with less than a bachelor’s degree earn 76 percent of what white men with the same education earn. Black and Hispanic women have median earnings 69 percent and 60 percent of the median earnings of white men with the same education level.

College graduates in Pennsylvania enjoyed earnings gains until the early 2000s but have not since then.

White and black men with a bachelor’s degree saw their earnings climb 23 and 14 percent between 1979-81 and 2000-02. Since 2000-02, though, wages for white and black men with a bachelor’s degree have fallen 5 percent and 8 percent respectively.

Up to the early 2000s, white and black women with a bachelor’s degree had the best earnings growth of any group, experiencing increases of 31 and 39 percent respectively in their median hourly earnings. Since then, however, white women’s wages have flat-lined and black women’s plunged 22 percent. Despite strong earnings growth until 2000-02, white women now earn only 78 percent as much as white

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male college graduates and female black college graduates earn 65 percent of the wages earned by similarly-educated white males.

In sum, our report validates the view of many Pennsylvanians that economic times have been difficult for a long time. This has a simple explanation: the economy has not been deliberately organized in a way that favors hard-working families. At the federal and state level, it has been “rigged” so that economic gains flow to the top. The solution to the economic stagnation experienced by so many groups in Pennsylvania is an economy in which policies instead support broader sharing of the gains (and greater gains overall because smart policies would make our economy more productive). The conclusion to this report outlines “The Agenda to Raise Pennsylvania’s Pay” that would restore more broadly shared prosperity in Pennsylvania. We contrast that agenda with the policy priorities of Pennsylvania’s self-described “free market” think tank, the Commonwealth Foundation, which coincide with the priorities of some of Pennsylvania’s most influential legislators. We term these contrasting priorities, “The Agenda to Lower Pennsylvania’s Pay” because that would be the impact of implementing these policies. This report presents data on the common economic experiences of many different groups of Pennsylvania workers to encourage shared understanding and to help build a winning coalition for the agenda to raise Pennsylvania’s pay. If divisiveness in our state wins the day, Pennsylvania workers may get stuck with an economy still further rigged to benefit the top 1 percent.

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The Wages of Stagnation

The 2016 presidential primary campaign was upended by the unexpected success of the insurgent candidacies of Democrat Bernie Sanders and Republican Donald Trump. Candidate Sanders campaigned against the power of Wall Street banks and pushed policies like a $15 minimum wage and free tuition at public colleges. Candidate Trump surged as he promised to deport millions of immigrants, renegotiate trade deals and build a border wall with Mexico. While elements of the electorate may be motivated by lingering strains of misogyny and racism in America, it remains vitally important to acknowledge that millions of working families have struggled to make real wage gains over the last several decades. Prolonged economic distress creates a natural pressure for democratic change. The failure to address this stress has created fertile ground for candidates to appeal to disaffected voters. Some of those voters responded to a positive message that emphasized a shared responsibility to create an economy that works for all, while others have gravitated to a message that lays the blame for our systemic economic problems at the feet of people who by appearance, language and or culture are easily identified as “other.” We thus begin this, the 21st edition of The State of Working Pennsylvania with an exploration of how wages in Pennsylvania have changed for men and women of different race and ethnicity as well as educational attainment (Table 1).

Table 1.

Median hourly wages by race & ethnicity, gender, and education in Pennsylvania 1979-82, 2000-02 and 2013-15

Demographic 1979-81 2000-02 2013-15

Percent Change

1979-81 to

2000-02

2000-02 to

2013-15

1979-81 to

2013-15

Men

Less than a Bachelor's Degree

White $19.52 $18.00 $17.34 -8% -4% -11%

Black $16.95 $13.52 $13.05 -20% -3% -23%

Hispanic NA NA $13.49 NA NA NA

Bachelor's Degree or More

White $26.08 $32.08 $30.54 23% -5% 17%

Black $22.62 $25.87 $23.69 14% -8% 5%

Hispanic NA NA $24.78 NA NA NA

Women

Less than a Bachelor's Degree

White $11.66 $13.28 $13.24 14% 0% 13%

Black $12.13 $12.93 $11.99 7% -7% -1%

Hispanic NA NA $10.41 NA NA NA

Bachelor's Degree or More

White $17.24 $24.26 $23.91 41% -1% 39%

Black $18.36 $25.57 $19.90 39% -22% 8%

Hispanic NA NA $15.04 NA NA NA

Source. Keystone Research Center based on Current Population Survey data

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Non-College Male Wages Plunge 15 Percent Today in Pennsylvania, just over seven in 10 men of adult working age (people aged 18 to 64) have less than bachelor’s degree (Figure 1). This group of workers, more than any other, has seen its wages fall sharply since 1979 (Figure 2). After adjusting for inflation, the median wage for white men with less than a bachelor’s degree in 2013-15 remained $2.18 per hour below its level in 1980 (1979-81), which is $4,500 less a year for a full-time, full-year worker. Black men without bachelor’s degrees earned $3.90 per hour less than in 1979-81, which is $8,100 less a year for a full-time, full-year worker. Limitations on sample size prevent analysis of wage trends for Hispanics by gender and educational attainment until recently. In the most recent three-year period black and Hispanic men with less than a bachelor’s degree earned 75 and 78 cents respectively for every dollar a similarly educated white man earned.

Figure 1.

Figure 2.

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2 Box 1: Men’s Labor Force Participation

Alongside wage declines, white and black men without a bachelor’s degree have also experienced an alarming decline in their labor force participation. In 1979-81, 86 out of every 100 adult working age white men (age 18 to 64) in Pennsylvania were participating in the labor market (working or actively looking for work). Today only 79 out of every 100 men are in the labor force. For black men with less than a bachelor’s degree, the drop from a lower starting point has been slightly larger: in 1979-81 78 out of every 100 participated in the labor force; today, 66 out of every 100 participate. These labor force participation statistics do not take into account the increase in the incarcerated population since

1979-81. We cannot make precise estimates that do take into account the incarcerated population because we

could not find consistent estimates of the incarcerated population by state, race, gender and educational level

over time. We can, however, gauge the order of magnitude of the additional drop in Pennsylvania labor force

participation rates if we assume that Pennsylvania’s prison population trends roughly mirror the overall U.S.

population.2 Cobbling together information from two different sources, we estimate that the percentage of 18-65

U.S. black men in prison rose from 3.6 percent in 1982 to about 8 percent in 2014; and the percentage of white

men from 0.54 percent to 1.2 percent.3 If we use these figures for Pennsylvania men with less than a bachelor’s

degree,4 then the number of black men out of 100 in the labor force would have dropped from about 75 in the

early 1980s to about 62 in 2013-2015. Using the same method for white men would decrease the number of men

working out of 100 by less than one at the beginning of our period and a bit more than one at the end of our

period.

Figure A.

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Wage Stagnation Spreads to College Graduates34

Up until 2000, male college graduates in Pennsylvania fared better than those without a four-year college degree. Hourly earnings climbed for white and black men with at least a bachelor’s degree by 23 percent and 14 percent respectively between 1979-81 and 2000-02. Since 2000-02, though, the hourly earnings of white men with at least a bachelor’s degree have fallen $1.50 per hour or $3,200 for a full-time worker. Black workers with a bachelor’s or higher have seen their hourly earnings fall $2.18 or $4,500 for a full-time worker. In addition, a college degree does not protect minority men against racial gaps in earnings: in the most recent three-year period, black and Hispanic men with a college degree made 78 and 81 cents for every dollar a white man made with the same level of education.

Figure 3.

Figure 4.

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College-Educated Women’s Wages: You Have Come a Long Way but It’s Still a Man’s World

Real hourly earnings for white and black women with a college degree or better climbed 41 percent and 39 percent respectively between 1979-81 and 2000-02. Since 2000-02, however, the wages of white women with at least a bachelor’s degree have fallen by 1 percent. Female black college graduates have fared substantially worse absorbing a 22 percent decline in hourly earnings since 2000-02. In the most recent three-year period, white female college graduates made 78 cents for every dollar a similarly-educated white male earned. Female black and Hispanic college graduates made only 65 cents and 49 cents, respectively, of similarly-educated white men.

Non-College Women: A Smaller Wage Plunge but Still Earning Less Women with less than a bachelor’s degree in Pennsylvania have fared better than similarly-educated men, with white women experiencing a 13 percent increase in hourly earnings since 1979-81. Black women with less than a bachelor’s degree did not fare as well, with hourly earnings down 1 percent in the last 36 years. White, black and Hispanic women earn less than white men of the same education level; white women earn 76 cents for every dollar a white man earns; that figure falls to 69 cents for black women and falls to 60 cents for Hispanic women.

Figure 5.

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Wage Trends by Decile 1979 to 2013 Figure 6 (above) and Table 2 (right) present wage trends for high- and low-wage Pennsylvania workers regardless of their education, race or gender. Table 2 shows stagnant wages for the bottom half of the wage distribution. Wages have risen in the top half of the distribution, but by less than 1 percent per year—even for the 90th percentile. For the typical Pennsylvania worker wages are up just 4.8 percent over 36 years (that’s barley over a tenth of one percent raise each year).

Table 2.

Real hourly wages by percentile in Pennsylvania

Percentile 1979 2015 Change Percent Change

10th $9.13 $8.79 -$0.34 -3.7% 20th $10.70 $10.43 -$0.27 -2.5% 30th $12.58 $12.67 $0.09 0.7% 40th $14.72 $14.94 $0.22 1.5%

50th (median) $16.66 $17.45 $0.79 4.8% 60th $18.89 $20.57 $1.68 8.9% 70th $21.97 $24.76 $2.80 12.7% 80th $25.06 $30.81 $5.75 23.0% 90th $30.60 $40.12 $9.52 31.1%

Source. Keystone Research Center based on Current Population Survey data.

Figure 6.

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Productivity Growth vs. Compensation Growth The capacity of the economy to generate wage and income growth is a function of how much output it can produce per hour of work, a concept commonly referred to as productivity. Using official government data, Larry Mishel and David Cooper of the Economic Policy Institute have developed a measure of the change in output per hour in Pennsylvania. Figure 7 (above) presents the cumulative growth of productivity in Pennsylvania since 1979 alongside a measure of the cumulative growth in median hourly total compensation (compensation is the sum of hourly wages plus contributions employers make to benefits like health care and pensions). The hourly productivity of Pennsylvania workers rose 71 percent since 1979, while median total compensation (wages plus health and pension benefits) for Pennsylvania workers rose just 9.7 percent over the same period.

If Productivity Is Up but Compensation Is Not Where Did All That New Income Go? With productivity up 71 percent, the Pennsylvania economy has continued to generate new income: that income just hasn’t shown up in the paychecks of most workers. So who is capturing all that new income? Data from the Internal Revenue Service, which tracks the growth of income from all sources (salary and wages, rents, capital gains and profits) reveals a radical redistribution of income since 1979 in Pennsylvania. In a state with 6.8 million families, the top 1 percent or 69,000 families have captured just over half (51 percent) of income growth since 1979.5

Figure 7.

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Figure 8.

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The Agenda to Raise Pennsylvania’s Pay The body of this report documents that wages for the vast majority of Pennsylvania workers have stagnated or declined since 1979, and wage stagnation’s reach has broadened over the last dozen years to include college-educated workers. With similar trends at the national level, there is now widespread agreement across the political spectrum that wage stagnation is the country’s key economic challenge.6 As pointed out in the previous section, this is not a crisis of overall income growth. Over the same period that most workers’ wages have stagnated, Pennsylvania productivity has risen 71 percent. In short, the potential has existed for adequate, widespread wage growth over the last three-and-a-half decades—but these economic gains have not trickled down to the vast majority of workers. Wage stagnation is not inevitable.7 It is the direct result of public policy choices on behalf of those with the most power and wealth that have intentionally suppressed wage growth. Because wage suppression stems from intentional policy choices, it can be reversed by making different policy choices. To boost Pennsylvanians’—and Americans’—wages, policymakers must intentionally tilt bargaining power back toward low- and moderate-wage workers. The following policies will generate robust wage growth and ensure that Pennsylvania’s prosperity is broadly shared.

I. Establish a Vision and Action Plan for Raising Pennsylvania’s Pay

1. Establish a “Jobs That Pay” task force and action plan Gov. Wolf’s inaugural address made “jobs that pay” a central priority of his administration. To develop an action plan to grow such jobs, the administration should form an interagency “Jobs That Pay Task Force.” This Task Force would be similar in spirit to U.S. Vice President Joe Biden’s Middle Class Task Force (online at https://www.whitehouse.gov/strongmiddleclass/about). It should flesh out how to implement this Agenda to Raise Pennsylvania’s Pay, identify additional measures and inculcate in state agency leaders and policy staff the habit of considering how state actions can be leveraged to improve middle-class pay.

II. Enact Policies to Directly Boost Pay

2. Raise the state minimum wage In 2016, the inflation-adjusted minimum wage is about one third below its 1968 level,8 even though productivity has doubled since 1968 and the education and skills of those in the bottom fifth have greatly improved.9 Moving the minimum wage to $12 by 2020 would benefit about a quarter of the Pennsylvania workforce directly and indirectly, nearly nine out of 10 of them adults (i.e., not teenagers); moving the minimum wage to $15 per hour now would benefit 40 percent of the workforce and still leave the minimum wage below 60 percent of what it would be if it had risen since 1968 in tandem with inflation plus productivity growth.10 While Pennsylvania builds the political will for a large, overdue catch-up increase in the minimum wage, the state could partner with philanthropy in at least one region to help businesses lift their wages to $15 per hour voluntarily. A portion of the state technical assistance available to businesses through industrial resource

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centers (IRCs) and workforce development programs could help businesses lift their wages and tap into the worker commitment and higher productivity that result from “good jobs” strategies.11

3. Raise sectoral pay levels in caregiving, trucking and manufacturing For 50 years, Pennsylvania’s “prevailing wage” law has required companies performing state-funded public construction projects to pay wage levels well above the state minimum wage. This law helps ensure that the large scale of state-funded public construction—a significant share of the non-residential construction industry market—in tandem with legal requirements to accept the “lowest bid” do not tilt the state’s construction industry toward cut-throat low-wage, low-skill, low-productivity competition.12 Without a state prevailing wage law, the wages of white men in Pennsylvania without a four-year college degree would have fallen even more since 1979.13 The construction industry is not the only sector in which the state has the power—through funding and regulation—to tilt competition towards the high road. In the following sectors, too, Pennsylvania should seek to raise industrywide wage standards.

Long-term care and early childhood education. In these caregiving industries, higher wages lower workforce turnover and stabilize the critical relationship between the caregiver or educator and the consumer or young child. When combined with effective training and supportive management, higher compensation can have a profound impact on quality. In early childhood, higher wages pay for themselves many times over in the long run by reducing social costs and increasing tax payments.14 In long-term care, raising pay to $15 per hour has a small impact on total costs, and there would be offsetting savings.15 Pennsylvania Representative Ed Gainey has introduced legislation to encourage nursing homes to pay $15 per hour.16 Given the concentration of women in caregiving jobs, “quality wage” standards in caregiving would help close the gap between women’s and men’s wages.

Trucking: Pennsylvania has the third most truck drivers in the country, and a particularly high concentration of such drivers outside southeast Pennsylvania and Allegheny County.17 A series of studies have established that higher pay improves safety in the long-haul trucking industry, in part because it improves retention of experienced drivers and because drivers no longer need to work unsafe number of hours to earn a decent living.18 One way Pennsylvania could help lift pay of truck drivers in part by cracking down of misclassification of drivers as independent contractors.19 The state could also focus some of its strategic industry-specific enforcement of wage and hour regulations (see below) in part on the construction industry. The state could explore the feasibility of setting minimum pay standards above the minimum wage similar to construction industry prevailing wage laws. Along these lines, because higher pay improves safety, Australia recently established a “Road Safety Remuneration System” to set pay and working conditions for truck drivers.20 Lifting pay for truck drivers operating within Pennsylvania would particularly benefit men and the central and rural parts of the state.21

Manufacturing and distribution: the state of Pennsylvania provides millions of dollars annually in business subsidies, tax breaks, and training, mostly for manufacturing companies. These funds should require all employees to earn at least $15 per hour within one year of employment, or by the completion of a registered apprenticeship program for employees hired as apprentices.

4. Promote state and local earned sick leave and paid family leave Since the 1970s, the share of families in which all adults work, including families with children and with aging parents, has grown sharply.22 This has heightened work-family stress, while also forcing families to make difficult choices between their income and the time they have for a child or others who need care. A growing number of

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cities and states have begun to assist today’s workers and their families in achieving a better balance between work and family. Thirty-four states and cities now provide earned sick leave,23 including Philadelphia on May 13, 2015,24 and the city of Pittsburgh (although Pittsburgh’s bill is still tied up in the courts).25 States and cities have also begun to adopt paid family and medical leave and the Commonwealth of Pennsylvania just won a grant from the U.S. Department of Labor to study the feasibility of establishing a statewide paid family leave program.26 The state of Pennsylvania should join the movement for earned sick leave and paid family and medical leave.

5. Enact a predictable scheduling law to stabilize the pay of low-wage workers Pennsylvania should also enact another family-friendly labor standard recently adopted in San Francisco and under consideration in Washington D.C.—a prohibition on last-minute or “just-in-time” scheduling, which as The Washington Post notes “…can wreak havoc on the lives of workers…”27 As well as enabling families to perform their family responsibilities, fair scheduling would stabilize pay for the lower-income workers with the least predictable schedules.

6. Consider the need for long-term policies to raise pay and reduce work time if “the robots are

coming” Over the past several years, an international debate has emerged about the possibility of mass worker displacement by robots and artificial intelligence (e.g., driverless vehicles). Keystone Research Center is on record as skeptical of some claims about worker displacement. That said, we do not have a crystal ball and thus considering how policy could cope with a massive reduction in available paid work hours makes sense. Such a trend should be cause for celebration because, after all, it would amount to a huge increase in productivity that society could distribute in the form of higher wages per hour, shorter work weeks, more vacation weeks, or higher social benefits (such as a “Universal Basic Income”).28 Research and the development of long-term policy options to address this issue could be assigned to the Jobs That Pay Task Force.

III. Strengthen Worker Voice and Promote High-Road Business Strategies

7. Strengthen worker voice and collective bargaining rights The single largest factor suppressing wage growth for middle-wage workers over the last few decades has been the erosion of collective bargaining, which has affected both union and nonunion workers alike.29 Federal law governs collective bargaining rights for most of the private sector, and has the most authority to ensure that workers gain the leverage they need to bargain for better wages and benefits, and to set high labor standards for all workers.30 Yet the state does control labor rights in the non-federal public sector and has significant regulatory, funding, and procurement authority that can impact worker voice and bargaining power more broadly. The state should use this authority to strengthen worker voice and bargaining rights.

Don’t award state contracts to labor-law violators. The federal government has just enacted new regulations that require companies to disclose violations of 14 different labor standards from the previous three years when bidding for new contracts of $500,000 or more and that also require procurement officials to consider “serious, willful, repeated, or pervasive” past wrongdoing in awarding contracts.31 Pennsylvania should piggyback on this federal step forward, requiring similar notification of companies bidding for contracts with the state and taking this information into account when awarding contracts.32

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Support positive labor-management models and innovative efforts to adopt good jobs strategies. The flip side of not supporting labor-law violators is helping companies and unions strengthen or transition to positive relationships that result in good jobs for employees, organizational success for the business, and stronger families and communities.

Use the bully pulpit to raise the visibility of broad-based unions that can restore equity. Where the state does not have significant legislative or executive authority, a governor and his or her administration can still use the bully pulpit to educate the public and boost workers’ collective confidence. For example, a growing number of unions and workers recognize that area-wide unions in industries that cannot relocate (such as janitorial services, security guards, health care, caregiving, hotels, restaurants, fast food, taxi or ride-share drivers, supermarkets) could restore equity in America by raising pay substantially. These sectors collectively account for most low-to-moderate wage U.S. jobs today. Speaking clearly about the potential of area-wide sector unions to transform poor jobs to family-supporting ones would also reinforce the new workers’ movement that has gathered pace in Pennsylvania and nationally in recent years (sometimes operating under the banner of “Fight for $15 and a Union”). President Obama, for example, has used the bully pulpit to highlight the potential of broad-based unions to lift workers’ wages, saying, “if I were busting my butt in a service industry today, I’d join a union…”33

8. Support strong enforcement of labor standards including the new federal overtime rule The enforcement of labor standards in the United States is so weak that hundreds of thousands of employers routinely fail to pay minimum wage or overtime, fail to protect employees from workplace hazards, fail to pay payroll taxes or worker’s compensation premiums, or fail to provide family and medical leave.34 Wage theft alone costs employees tens of billions of dollars a year, and lack of worker’s compensation coverage, unemployment insurance coverage, or Social Security coverage can cost them billions more.35 Pennsylvania should join the growing number of states and localities adopting pro-active, strategic industry-specific enforcement strategies to root out systemic violation of labor standards and assist businesses in transitioning to strategies that do not require wage theft to achieve decent profits. Pennsylvania can also help ensure effective enforcement of a new labor standard that will arguably boost the pay of middle-income workers more than any policy change in decades. In May, the U.S. Department of Labor (DOL) raised the salary threshold under which working people can earn overtime pay.36 Under the new rule, effective December 1 of this year, most salaried workers—including managers and professionals—making less than $47,476 will now be entitled to overtime pay. According to estimates from the Economic Policy Institute, this change will directly benefit just under half a million Pennsylvania workers, or 22.6% of the commonwealth’s two million salaried workers. These workers are distributed throughout the state and in all demographic groups. Pennsylvania should use its Wage Payment and Collection Law (WPCL) to assist the federal government in enforcing this new rule. The WPCL requires wages to be paid on a regular, periodic basis, in full, less permissible deductions, and in the agreed-upon form to all workers in the same grade or class (cash, check, direct deposit, etc.). Under the new Obama rule, wage underpayment could give rise to a Pennsylvania WPCL claim, which imposes personal liability on corporate officers responsible for the management of a corporation's finances and payroll. The Pennsylvania WPCL also provides for double damages in certain instances. Actions under the WPCL may be instituted through the courts or through Department of Labor and Industry administrative proceedings.

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IV. Boost Job Growth and Reduce Unemployment

9. Invest in Pennsylvania’s infrastructure

In January 2008, before the nation knew it was in the Great Recession, the Keystone Research Center stated publicly that Pennsylvania should invest in infrastructure to capitalize on low interest rates and low construction costs certain to result from our already-faltering economy.37 While construction costs have recovered, interest rates remain at historic lows, so it is still a good time for Pennsylvania to invest in infrastructure. On state-funded infrastructure projects, Pennsylvania should also invest in high-quality, registered construction apprenticeship programs to help train the next generation of construction trades workers and promote the diversification of the pipeline to family-supporting construction careers.

10. Invest adequately and equitably in schools, restoring public sector jobs lost in 2011-14. The deep cuts in education funding in Pennsylvania in 2011 led to an estimated 27,000 job losses in the public education sector and contributed substantially to Pennsylvania’s plunge to the bottom of the state job-growth rankings from the beginning of 2011 to the end of 2014.38 Increasing education funding would restore many school jobs and strengthen and sustain the economic recovery. It would also translate into tangible educational improvements—smaller classes, more school nurses, and more teachers for arts and other programs cut in the past few years. An increase in funding is also needed to fully fund Pennsylvania’s fair funding formula established by the bipartisan Basic Education Funding Commission, and to lift Pennsylvania out of last place for funding equity between rich and poor districts.39 The increase in jobs in schools would especially benefit women, who make up a higher share of school jobs.

11. Implement a “Bring Good Manufacturing Jobs Back to Pennsylvania” Strategy While manufacturing accounts for a smaller share of all jobs than in the past (currently a bit less than one in 10 in Pennsylvania), it remains vital to the state’s economy. Pennsylvania manufacturing jobs pay an average annual compensation of over $65,000 per year. The manufacturing sector also accounts for over 90 percent of the state’s exports, and 70 percent of all research and development. Since 2010, employment in manufacturing has grown slightly, partly because more U.S. companies have come to see the downsides of distant sourcing. Pennsylvania should seize the moment and implement a bipartisan “Bring Good Manufacturing Jobs Back to Pennsylvania” strategy. This could be overseen by a public-private Pennsylvania Advanced Manufacturing Partnership that includes representatives of manufacturers and labor. It could include policy components to:

1. Retain and reshore manufacturing jobs; 2. Finance working capital and innovation; 3. Build skills for 21st century making; and 4. Boost demand for Pennsylvania manufacturing products through infrastructure investment, buy

Pennsylvania and buy American procurement policies, maximizing manufacturing jobs linked to Pennsylvania’s Shale gas, and giving Pennsylvania companies better access to U.S. fair trade laws.

A Pennsylvania manufacturing strategy would especially benefit men and Pennsylvanians living in rural areas because these two groups account for a disproportionate share of manufacturing jobs.

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12. Ban the box

While policies that expand employment like infrastructure spending benefit all workers by tightening labor markets truly promoting equity in employment and opportunity also requires policies specifically targeted at hard to employ groups. Decades of excessive policing and over-criminalization have left tens of thousands of people across the Pennsylvania with criminal records that operate as a barrier to employment when employers use questions about criminal convictions to narrow the hiring pool. “Ban the box”— is a policy reform that delays background check inquiries by employers until after the employer has made an offer of employment.40 It’s a simple low-cost reform that removes an arbitrary barrier that might prevent an otherwise qualified candidate from getting a job and research shows these policies have increased job opportunities for workers with criminal convictions.41

13. Subsidized jobs There is broad bipartisan support for the notion that the best way to fight poverty is with a job. Hard-to-employ groups such as ex-felons, low-income parents and people with disabilities, however, often struggle to find employers willing to invest in the training necessary to make these workers productive. Community Legal Services of Philadelphia and their community partner Redeem are launching a campaign to promote as a solution to this problem Pennsylvania and Philadelphia subsidized jobs program. (Readers who want to endorse this proposal can do so here.) Subsidized employment programs given employers an extra incentive to employ hard-to-employ groups by covering some of the wages of these workers. Once on the job these workers begin to accumulate hard and soft skills that make them more likely to stay in the labor market once job subsidies end. Subsidized jobs programs also save taxpayers money: they cost much less than incarcerating someone, for example, and larger long-term savings result when participants becomes permanently more strongly attached to productive employment.42

V. Retain and Grow Family Supporting Careers

14. Expand use of work sharing In 2011, Pennsylvania became one of the now 28 states that allow “work sharing”—i.e., partial claims for unemployment if employers reduce hours because of depressed demand. Under this provision, if an employer’s need for employees drops from five to four, all five employees can work 80 percent and draw 20 percent unemployment benefits. Work sharing has strong bipartisan support, in part because it allows employers to retain valued employees. By reducing the number of “separations” between worker and firm, work sharing helps retain family-supporting jobs and careers in recessions. While Pennsylvania has increased its informational materials on work sharing, the take up rate remains low.43 Building on the state’s efforts, and in partnership with business and labor and utilizing sector-specific employer training consortia such as Industry Partnerships and apprenticeship programs, Pennsylvania should develop a plan to expand work sharing.

15. Expand training linked to careers that pay Pennsylvania is a national leader in building multi-firm sectoral training consortia (known as industry partnerships) and also has more extensive multi-firm apprenticeships than most states, especially in the construction trades but also in manufacturing. These multi-firm training collaborations can grow public-private shared investment in workers’ skills. They can also develop portable industry-recognized credentials and job-

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matching institutions (e.g., job boards, job fairs, or hiring halls) that enable employers to find qualified workers and more laid-off workers to find another good job that utilizes their unique skillset. Pennsylvania should expand family-supporting careers through increased public-private investment in industry partnerships linked to companies with good jobs. 44

VI. The Top 1 Percent

16. Make the Pennsylvania tax system fairer Pennsylvania has one of the most unfair state and local tax systems in the country, with middle-income families paying two-and-half times as much of their income in taxes as the top 1 percent, with low-income families paying nearly three times as much.45 Fairer taxes would increase the take-home pay of middle- and low-income families. Asking top income Pennsylvanians to pay their fair share would also provide resources to invest in schools and finance infrastructure bonds. Pennsylvania could make the tax system more fair by:

Raising the tax rate on income from wealth;46

Eliminating the Pennsylvania constitution’s uniformity clause so that the state can exempt the first part of income from taxes and enact graduated income tax rates such as exist in all of Pennsylvania’s surrounding states.47

Enacting a severance tax that would fall primarily on out-of-state consumers and on natural gas companies.

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The Agenda to Lower Pennsylvania’s Pay While Pennsylvanians have experienced 35 years of wage stagnation and decline, some voices inside and outside the state legislature advocate consistently for policies very different from The Agenda to Raise Pennsylvania’s Pay (which are summarized in Box 2). The stated rationale for the policies listed is usually that they would eliminate regulations, lower taxes and shrink government, and let the free market rip. These policies could be called “The Agenda for Pennsylvania’s 1 percent” because that’s the group that would benefit from them. Instead we call these policies “The Agenda to Lower Pennsylvanians Pay” because that describes what would result from these policies for working Pennsylvanians. It’s not difficult to find explicit advocacy for the policies listed—those who favor them are quite open about it. One source that advocates for almost the entire list as an overall agenda is a long Commonwealth Foundation letter published in The Nation magazine along with a supportive cover letter signed by Senator Pat Toomey (online at https://www.thenation.com/article/pennsylvania-think-tank-plans-slay-unions-wisconsin/). This letter makes explicit that the overall goal is to have Pennsylvania follow the path of Wisconsin after the 2010 elections under Gov. Scott Walker. If you want to shrink Pennsylvania’s middle class further and to increase the share of income growth going to the top 1 percent well above 50 percent, that’s the path to follow.

Box 2. The Agenda to Lower Pennsylvania’s Pay48 Vision and Action Plan: Reduce the Power of Working Families in Politics and Policy Debate by reducing labor unions’ ability to collect contributions from members and others who benefit from their negotiating power. Policies to Directly Lower Pay

Modify or eliminate Pennsylvania’s prevailing wage law to reduce the wages of construction trades workers on state-funded construction projects49

Prohibit Pennsylvania localities from establishing local minimum wages above the state minimum wage, foreclosing legislation analogous to the $15 per hour minimum wages that passed in Seattle and San Francisco50

Do not follow the lead of 29 other states by increasing the state the minimum wage above the federal level51

Replace defined benefit public pensions with defined contribution plans52

Lower the average pay of teachers at K-12 schools paid for by public funds through universal access to charter schools and privatization of public schools.53

Privatize Pennsylvania’s state wine and spirits stores54 Weaken Worker Voice and Promote Low-Road Business Strategies

Enact a Pennsylvania law that makes it more difficult for unions to collect contributions from members and others who benefit from their negotiating power. In states where they exist, these so-called “right-to-work laws” lower wages for union and non-union workers.55

Lower Job Growth and Increase Unemployment

Limit the growth of spending to population growth plus inflation56

Oppose state borrowing, including to finance investment in infrastructure.

Reduce unemployment benefits for unemployed Pennsylvania workers57

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Repeal Pennsylvania’s Medicaid expansion, directly reducing the incomes of low-income Pennsylvania families while reducing consumer demand.58

The Top 1 Percent – Make the Pennsylvania Tax System Even More Generous to the 1 Percent

Maintain the unfairness of the Pennsylvania tax system by maintaining Pennsylvania’s status as the only state with significant natural gas resources and no severance tax59

Reduce Pennsylvania’s Corporate Net Income (CNI) tax but do not close corporate tax loopholes by enacting combined reporting60

So What’s It Gonna Be? The result of 35 years of national and state policies that mostly benefitted the top 1 percent are apparent in the wage statistics presented in the first part of this report. If Pennsylvania policymakers changed course, and enacted a meaningful agenda to raise Pennsylvania’s pay, within a few years we would begin to see shared prosperity more similar to the late 1940s to 1970s. If, instead, Pennsylvania lawmakers double down on an agenda to lower Pennsylvania’s pay, the result will be more wage stagnation, more inequality, and more anger and division. We have written this report to advocate for a more inclusive path leading to rising pay for all major demographic groups and every part of Pennsylvania.

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End Notes

1 Of all Pennsylvanians aged 18-64, 69 percent have less than a bachelor’s degree.

The overall Pennsylvania incarcerated rate per 100,000 in 2014 (840) was similar to the U.S. rate (890), which makes the

assumption about the Pennsylvania numbers mirroring national plausible. See Danielle Kaeble, Lauren Glaze, Anastasios Tsoutis, and Todd Minton, Correctional Populations in the United States, Bureau of Justice Statistics, Revised January 21, 2016, Appendix Table A1, p. 17. 3 Western and Pettit report the percentage of U.S. black and white men 18-65 in prison or jail from 1982 to 1996, showing a rise for blacks from 3.6 to 7.49 percent and for whites from 0.54 percent to 1.12 percent. See Bruce Western and Becky Pettit, ”Incarceration and Racial Inequality in Men’s Employment,” Industrial and Labor Relations Review Vol. 54, No. 1 (October 2000), Table 3, p. 8. A recent White House report shows the overall (both races) U.S. male incarceration rate from 1990-2014, revealing only a small increase of about 5-7 percent (reading from a graph) from 1996 to 2014. (See Executive Office of the President of the United States, The Long-Term Decline in Prime-Age Male Labor Force Participation, June 2016, Figure 22, p. 33. Increasing the 1996 black incarceration rate (of 7.49 percent) by 5-7 percent brings it to about 8 percent. Doing the same with the white rate brings it to about 1.2 percent. 4 Assuming the trends for men without a bachelor’s degree follow the trends for all men 18-65 is likely a conservative assumption because the increase in the male prison population concentrated among non-college men. 5 Estelle Sommeiller, Mark Price and Ellis Wazeter. 2016. Income inequality in the U.S. by state, metropolitan area, and county. Economic Analysis Research Network (EARN) Report http://www.epi.org/publication/income-inequality-in-the-us/ 6 This section adapts to the state level The Agenda to Raise America’s Pay, released by the Economic Policy Institute and online at http://www.epi.org/action/the-agenda-to-raise-americas-pay-2016/. For the analytics underlying the need for national and state agendas to raise America’s and Pennsylvania’s pay, see, in addition to the body of the present report, Josh Bivens, Elise Gould, Lawrence Mishel, and Heidi Shierholz, Raising America’s Pay: Why It’s Our Central Economic Policy Challenge, Economic Policy Institute, June 4, 2014; http://www.epi.org/publication/raising-americas-pay/ 7 Lawrence Mishel, Causes of Wage Stagnation, Economic Policy Institute, January 6, 2015; http://www.epi.org/publication/causes-of-wage-stagnation/ 8 The U.S. Department of Labor website (https://www.dol.gov/featured/minimum-wage/chart1) reports the minimum wage in nominal and inflation-adjusted terms for each year from 1938 to 2012; the inflation-adjusted value in 2012 trails that in 1968 by 30 percent. Adjusting for inflation between 2012 and July, 2016 (using the CPI-U-RS inflation index available at www.bls.gov means that the national (and Pennsylvania) minimum wage now trails that in 1968 by 33 percent (and would be $10.80 per hour today). Alternatively, inflation the $1.60 per hour nominal minimum wage using the increase in the CPI-U-RS from 1968 (on average) to July 2013 indicates that today’s minimum wage should equal $11.03 per hour to equal the 1968 inflation-adjusted value; that implies the minimum wage today trails the 1968 level by 34 percent. 9 Lawrence Mishel, Low-Wage Workers Have Far More Education than They Did in 1968, Yet They Make Far Less, Economic Policy Institute, January 23, 2014; http://www.epi.org/publication/wage-workers-education-1968/ 10 For estimates of the number of Pennsylvania workers who would benefit from minimum-wage increases to four different levels ($8.75, $10.10, $12, and $15 per hour), see “Table 1” online at http://keystoneresearch.org/sites/default/files/KRC_Table1_4Proposals.pdf. U.S. labor productivity has increased 133 percent since 1968 (www.bls.gov). Since the minimum wage would need to equal $10.80-$11.02 to adjust for inflation alone since 1968, it would have to exceed $25 per hour to compensation for both inflation plus productivity growth. 11 Companies that pursue “good jobs” strategies pay significantly above industry average wages and benefits and also adopt operating and organizational practices that capitalize on having experienced workers who want to help their employer achieve high performance. See Zeynep Ton, The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profits, New Harvest, January 14, 2014. 12 For summaries of research documenting that prevailing wage laws improve pay, skills, training and productivity—but do not raise state construction costs—go to http://keystoneresearch.org/issues-guides/prevailing-wage 13 Although the diversity of employment in the Pennsylvania construction has increased significantly since the late 1970s, most trades workers (and other occupations) in the industry remain white men. 14 According to Pennsylvania Partnerships for Children, “High-quality pre-kindergarten is a proven investment—every dollar spent returns up to $17 in reduced crime, education and social services savings, as well as resulting in higher earnings and increased taxes paid in adulthood.” http://www.papartnerships.org/work/early-learning

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15 Keystone Research Center estimates that raising wages of all nursing home workers would increase nursing home costs by 4 percent. In addition, this change would generate offsetting savings because of reduced workforce turnover and reduced prescription drug costs because of happier residents. For the state and federal government, and for taxpayers, the cost of means-tested public assistance for low-wage workers would also decline. See Stephen Herzenberg, Double Trouble: Taxpayer-Subsidized Low-Wage Jobs in Pennsylvania Nursing Homes, Keystone Research Center, April 2015, p. 10; http://keystoneresearch.org/sites/default/files/KRC_DoubleTrouble.pdf 16 Pennsylvania Rep. Ed Gainey has introduced legislation that would give nursing homes paying at least $15 per hour to all their employees a “living-wage certification.” He has also introduced separate legislation requiring nursing homes not meeting this standard to pay a portion of the cost of public benefits for which their low-wage workers qualify. See Stephen Herzenberg, Nursing Homes Jobs That Pay, Keystone Research Center, November 2015; http://keystoneresearch.org/sites/default/files/201511_NHFollowUp_FINAL.pdf 17 For a profile of “U.S. heavy and tractor-trailer truck drivers,” including Pennsylvania’s third-place ranking for employment and a map showing that most of rural, central, and southwest Pennsylvania have between 1.25 and 2.5 times as many of these drivers relative to total employment as does the United States as a whole, see http://www.bls.gov/oes/current/oes533032.htm. See also http://www.bls.gov/ooh/transportation-and-material-moving/heavy-and-tractor-trailer-truck-drivers.htm. 18 For a summary of three U.S. studies, see Michael H. Belzer, “The Effects of Economic Forces on Motor Carrier Safety,” Motor Carrier Safety Advisory Committee,” PPT presentation, Federal Motor Carrier Safety Administration, December 7, 2009. For a more recent review of research in the United States and Australia, see Mooren Lori, Ann Williamson, and Raphael Grzebieta, “Evidence that truck driver remuneration is linked to safety outcomes: a review of the literature,” Proceedings of the 2015 Australasian Road Safety Conference 14, 16 October, 2015, Gold Coast, Australia. Medium or long term, some observers believe that driverless vehicles may jeopardize the employment of truck drivers. Thus, wage standards for truck drivers above the minimum wage could, in the near-term, make it possible to enforce limits on driving excess hours in a week and in the long term ensure that drivers maintain a decent living as automation reduces working hours. 19 Personal communication with Michael Belzer, Wayne State University. 20 See https://www.fairwork.gov.au/about-us/legislation/road-safety-remuneration-system 21 Truck drivers in the United States are 95 percent male and about 60 percent non-Hispanic white (http://www.bls.gov/cps/cpsaat11.pdf). Based on the overall share of the workforce that is Hispanic and African-American in Pennsylvania, and on the geographic distribution of truck drivers, it is likely that well over 75 percent of Pennsylvania truck drivers are white. 22 For data on the rising labor force participation rates of women, including those with children at home, see Bureau of Labor Statistics, Women in the Labor Force: A Data Book, especially Table 1, pp. 11-12 and Table 2, p. 23; http://www.bls.gov/cps/wlf-databook-2013.pdf 23 http://familyvaluesatwork.org/media-center/paid-sick-days-wins 24 Tricia Nadolny, “Paid sick leave signed into Philadelphia law,” February 14, 2015; http://articles.philly.com/2015-02-14/news/59123442_1_sick-leave-seasonal-workers-greenlee 25 Pittsburgh also enacted paid sick leave in 2015, but a judge struck down the bill on December 23, 2016. This decision is still being appealed. 26 U.S. Department of Labor, “Paid Leave Analysis Grants”; https://www.dol.gov/wb/media/paidleavegrants.htm 27 The San Francisco “Retail Worker Bill of Rights,” which includes a “predictable scheduling” provision, went into effect on July 3, 2015. See also Lydia DePillis, “The next labor fight is over when you work, not how much you make,” Washington Post, May 8, 2015; online at https://www.washingtonpost.com/news/wonk/wp/2015/05/08/the-next-labor-fight-is-over-when-you-work-not-how-much-you-make/. For a study of the impact of just-in-time scheduling on employees in Washington D.C., see Ari Schwartz, Michael Wasser, Merrit Gillard, and Michael Paalberg, Unpredictable, Unsustainable: The Impact of Employers’ Scheduling Practices in DC, D.C. Jobs with Justice and partners, June 2015; http://www.dcjwj.org/wp-content/uploads/2015/06/DCJWJ_Scheduling_Report_2015.pdf 28 For materials on the debate about the future of work including whether the “robots are coming” and how to manage it if they are, go to http://www.earncentral.org/futureofworkinthestates.htm. Start with the “overview” document which also provides an introduction to the other links at this web page. 29 Lawrence Mishel, Unions, inequality, and faltering middle-class wages, Economic Policy Institute, August 29, 2012; http://www.epi.org/publication/ib342-unions-inequality-faltering-middle-class/

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30 https://www.nlrb.gov/rights-we-protect/jurisdictional-standards 31 New York Times Editorial Board, “Fair Pay, Safe Workplaces, Republican Objections,” August 26, 2016; http://www.nytimes.com/2016/08/27/opinion/fair-pay-safe-workplaces-republican-objections.html 32 For companies that bid for federal as well as Pennsylvania contracts, and that have already disclosed information to the federal government, the state could allow companies to grant the state access to the information shared with the federal government and negotiate a Memorandum of Agreement with the federal government. 33 https://www.youtube.com/watch?v=SzvtCTJ7UY0 34 Gordon Lafer, The Legislative Attack on American Wages and Labor Standards, Economic Policy Institute, October 31, 2013; http://www.epi.org/publication/attack-on-american-labor-standards/ 35 Brady Meixell and Ross Eisenbrey, An Epidemic of Wage Theft Is Costing Workers Hundreds of Millions of Dollars a Year, Economic Policy Institute, September 11, 2014; http://www.epi.org/publication/epidemic-wage-theft-costing-workers-hundreds/ 36 http://keystoneresearch.org/media-center/press-releases/new-overtime-rule-will-benefit-nearly-half-million-pa-workers-keystone-r 37 Mark Price and Stephen Herzenberg, A Building Storm: The Housing Market and the Pennsylvania Economy, Keystone Research Center, January 31, 2008; http://keystoneresearch.org/publications/research/building-storm-housing-market-and-pennsylvania-economy. See also Elizabeth McNichol, It’s Time for States to Invest in Infrastructure, Center on Budget and Policy Priorities, February 23, 2016; http://www.cbpp.org/research/state-budget-and-tax/its-time-for-states-to-invest-in-infrastructure 38 Mark Price and Stephen Herzenberg, The State of Working Pennsylvania 2014, Keystone Research Center; http://keystoneresearch.org/swp2014 39 Michael Churchill, PA Basic Education Funding Commission Formula Means Districts Needs at Least $3.2 Billion More in State Funding, the Public Interest Law Center, May 2016; http://www.pilcop.org/befc-adequacy-calculation/ the City of Philadelphia has a Ban the Box ordinance 40 modelled on similar laws in New York City and New Jersey; http://www.phila.gov/HumanRelations/DiscriminationAndEnforcement/Pages/BantheBoxLawAtAGlance.aspx 41 For more on the effectiveness of these policies see Maurice Emsellem and Beth Avery, Racial Profiling In Hiring: A Critique of New “Ban The Box” Studies, National Employment Law Project; http://www.nelp.org/publication/racial-profiling-in-hiring-a-critique-of-new-ban-the-box-studies/ 42 We thank Sharon Dietrich of Community Legal Services in Philadelphia for suggesting this policy. For a review of the research on the effectiveness of subsidized jobs programs see Indivar Dutta-Gupta, Kali Grant, Matthew Eckel, and Peter Edelman, Lessons Learned from 40 Years of Subsidized Employment Programs: A Framework, Review of Models, and Recommendations for Helping Disadvantaged Workers, Georgetown University Law Center on Poverty and Inequality, Spring 2016 https://www.law.georgetown.edu/academics/centers-institutes/poverty-inequality/current-projects/loader.cfm?csModule=security/getfile&PageID=269877 43 The Pennsylvania Department of Labor and Industry’s educational materials on work sharing are online at http://www.uc.pa.gov/employers-uc-services-uc-tax/shared-work/Pages/default.aspx. For more information on work sharing, including on its wide use in Germany and the inclusion of support for work sharing in the Obama 2017 budget, see the web page of the Center for Economic and Policy Research (http://cepr.net). 44 Among the ways this could be done are increasing the state budget line item for industry partnerships, now less than $2 million compared to $20 million at its peak; reauthorizing of the state’s “Reemployment Fund” which provides flexible training dollars and will sunset in 2017; enacting industry partnership tax credit, one version of which passed the Senate Finance committee in the 2011-12 legislative session; and leveraging federal and philanthropic dollars. 45 See Institute for Taxation and Economic Policy, Who Pays? Pennsylvania State and Local Taxes in 2015; online at http://www.itep.org/whopays/states/pennsylvania.php 46 On this option, see Stephen Herzenberg and Mark Price, Who Pays for an Increase in the PIT on Income From Wealth? Pennsylvania Budget and Policy Center, July 1, 2016; https://pennbpc.org/sites/pennbpc.org/files/WhoPaysPITonWealth.pdf 47 A uniform exemption on Pennsylvania’s income tax for the first $30,000 of income could raise over a billion dollars in revenue and reduce income taxes paid on average by bottom 80 percent of Pennsylvania taxpayers by nearly $500 per taxpayer. See Stephen Herzenberg and Mark Price, Pennsylvania Should Raise Needed Revenues in Fair Ways: Short- and Long-term Approaches to Fixing Pennsylvania’s Unfair Tax System, Pennsylvania Budget and Policy Center, April 11, 2011; http://pennbpc.org/pa-should-raise-needed-revenues-fair-ways-short-and-long-term-approaches-fixing-

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pennsylvania%E2%80%99s-unfai. Preliminary (unpublished) analysis of the geographical impact of this change shows that most rural counties would pay substantially less in taxes, thereby increasing their take-home pay. 48 As noted in the text, most of the items in this box, were advocated for by the Commonwealth Foundation in a fundraising letter online at https://www.thenation.com/article/pennsylvania-think-tank-plans-slay-unions-wisconsin/ 49 Every legislative session, members of the Pennsylvania legislature introduce multiple bills to eliminate or weaken the Pennsylvania prevailing wage law. In the current legislative session, for example, HB 541, sponsored by Rep. Kauffman and co-sponsored by 19 other House members, would eliminate Pennsylvania’s prevailing wage bill; http://www.legis.state.pa.us/cfdocs/billinfo/billinfo.cfm?syear=2015&sind=0&body=H&type=B&bn=0541. Senate Bill 714, sponsored by Sen. Wagner and with eight co-sponsors, would exempt school districts from the state’s prevailing wage law; http://www.legis.state.pa.us/cfdocs/billinfo/billinfo.cfm?syear=2015&sind=0&body=H&type=B&bn=0541 50 A provision that “pre-empts” localities from raising their minimum wage above the state minimum wage was included in the 2006 law that raised the Pennsylvania minimum wage above the federal level. Proponents of higher pay for working families, including Keystone Research Center and the Pennsylvania Raise the Wage coalition, favor eliminating this provision in conjunction to raising the state minimum wage. The proponents of the agenda to lower Pennsylvania’s pay want to keep this provision. 51 For the minimum wage by state, go to https://www.dol.gov/whd/minwage/america.htm. Senator Scott Wagner, one of the legislative leaders who champions the agenda to lower Pennsylvania’s pay, has proposed increasing the state minimum to $8.75 per hour. He made this proposal, however, as part of an effort to head off a larger increase. 52 A series of specific legislative proposals over the past several years would have replaced traditional guaranteed pensions with 401(k)-style savings plans. According to actuaries for pension plan for school teachers, this shift would have lowered benefits for career school employers by as much as 70 percent. For details, see the Keystone Research Center pension primers on line at www.keystoneresearch.com/pensions, especially pension primers number eight, nine, 12 and 14. 53 Charter school teachers earn 17 percent less than public school teachers on average ($44,500 versus $53,400). Some of this difference reflects the lower levels of experience of charter school teachers. Online at http://www.in-perspective.org/pages/teachers-and-teaching-at-charter-schools 54 While unionized employees of state wine and spirits stores each a family supporting wage, most front-line sales employees at the stores likely to distribute wine and spirits under a fully privatized system earn much less. 55 Wages in so-called “right-to-work” (RTW) states are 3.1 percent lower than those in non-RTW states, which translates into $1,558 lower annual wages for a typical full-time, full-year worker. See Elise Gould and Will Kimball, Right-to-Work States Still Have Lower Wages, April 22, 2015 http://www.epi.org/publication/right-to-work-states-have-lower-wages/ 56 On the jobs lost due to education funding cuts in 2011, and the resulting slowdown in the state’s economic recovery, again see Mark Price and Stephen Herzenberg, The State of Working Pennsylvania 2014, Keystone Research Center; http://keystoneresearch.org/swp2014 57 Act 60 of 2012 (formerly Senate Bill 1310) cut eligibility and benefit levels for Pennsylvania unemployment benefits. For details on the cuts, see Sharon Dietrich, “Restoring Pennsylvania’s UC Safety Net,” October 7, 2015; https://clsphila.org/learn-about-issues/testimony-restoring-pennsylvanias-uc-safety-net. For a list of the bill sponsors and who voted for it, go to http://www.legis.state.pa.us/cfdocs/billinfo/bill_history.cfm?syear=2011&sind=0&body=S&type=B&bn=1310 58 The Commonwealth Foundation calls for rejecting Medicaid expansion and, for good measure (and to no surprise), repealing the Affordable Care Act. See Commonwealth Foundation, “Principles for Health Care Reform,” October 11, 2012; http://www.commonwealthfoundation.org/research/detail/principles-for-health-care-reform 59 The opposition of the House and Senate majority leaders to a severance tax is well known. See, for example, Liam Migdail-Smith, “Turzai, GOP lawmakers denounce tax on natural gas drilling,” Reading Eagle, May 30, 2016; http://www.readingeagle.com/news/article/turzai-gop-lawmakers-denounce-tax-on-natural-gas-drilling. For the Commonwealth Foundation’s views, see Elizabeth Stelle, “Governor Wolf’s Natural Gas Tax Proposal,” March 2, 2016; http://www.commonwealthfoundation.org/issues/detail/governor-wolfs-natural-gas-tax-proposal 60 The Commonwealth Foundation advocates lowering the Corporate Net Income tax in Nathan Benefeld, “Why PA Corporations Don’t Pay Taxes,” Commonwealth Foundation, June 3, 2010; http://www.commonwealthfoundation.org/policyblog/detail/why-pa-corporations-dont-pay-taxes. In this blog, Benefeld says at one point “"Indeed, a good case could be made that the best corporate income tax rate is zero. A proposal to do exactly that has been floated in Virginia.”