- August 30, 2019
- Laura Dresser & Joel Rogers
Each year on Labor Day, COWS draws a picture of how working people in Wisconsin are faring. The long report, The State of Working Wisconsin, is released biannually on even-numbered years and looks at the economy comprehensively from a working-family perspective. In odd-numbered years, like 2019, we provide a more abbreviated and focused report, called The State of Working Wisconsin: Facts & Figures.
On some of the most well-known economic indicators, there is good news for Wisconsin workers. The unemployment rate in the state has been consistently low. The economy is steadily adding jobs. These are important measures for working people’s lives. When jobs are more available not only is it easier to secure a job, it is also easier to get the hours of work you want, to be able to ask for time-off you need, and to make ends meet. This Labor Day, with the memory of the Great Recession of 2007 now fading from memory, workers across Wisconsin have this good news to celebrate.
Even so, many working families in the state feel stressed and stretched. In this report, then, we provide information on few key long-term trends that are contributing to the stress even in the context of low unemployment. Looking across the last forty years, the challenges working people face are clear. Wage growth has been anemic. Income inequality is reaching new highs. Unions, which have been so critical to supporting workers in this state, are in serious decline. Additionally, state policy, which could be helping to close gaps, is actually exacerbating these trends. From tax changes that reward our highest income families to rejection of health insurance to cover our families in need, policy continues to pave the low-road for our state.
In just the past few weeks, leading American business leaders appear to have experienced a sudden and surprising bout of conscience. On Monday, August 19, the Business Roundtable, which represents the largest U.S. corporations, issued a statement signed by 181 CEOs that embraced stakeholder capitalism—the idea that corporations have obligations to employees, the community, and customers, as well as shareholders. On the next day, Tom Wilson, the chair of the executive committee of the U.S. Chamber published an op-ed titled “Save Capitalism by Paying People More.” Wilson acknowledges in blunt terms that ordinary working Americans aren’t flourishing economically. (For excerpts from Wilson’s op-ed, see Box 1 near the end of this report.)
This year’s annual “The State of Working Pennsylvania” documents the accuracy of Wilson’s observation in Pennsylvania. To be sure, this report does have a bit of good news. In 2018, for the first time since 2001, Pennsylvania workers enjoyed wage increases across the board—3.1% on average across the entire wage distribution (i.e. from the 10th percentile to the 90th percentile). These gains reflect what is now the longest economic expansion in U.S. history and an unemployment rate in Pennsylvania below 4% for the first time since before 1976.
Acknowledging this progress, the longer-term picture remains one of meager gains for workers. Over the last economy cycle, from the 2007 peak to 2018, the annual average increase in the Pennsylvania median wage has been less than half a percent. Even now, some slack remains within the Pennsylvania job market, which helps explain why wages in this expansion took so long to kick up. Underemployment remains above the 2007 pre-Great Recession level and the employment rate (share of adults aged 20 and over employed) remains below the 2007 level. If the employment rate today were at the 2007 level, Pennsylvania would have another roughly 150,000 jobs. Looking over a longer period, since 1973, the top 1% in Pennsylvania received 46% of the total increase in income in the state.
Manufacturing job losses in recent decades have hurt Kentucky communities. Despite the claims of proponents of “Right-To-Work” (RTW), which was enacted in Kentucky in 2017, employment data suggests the policy hasn’t led to a hiring boom in manufacturing.
Whether we are born here or moved here, we all value that Virginia is a great place to raise a family. Immigrants move to Virginia for many of the same reasons as people born in other areas of the United States — job opportunities, good schools, and thriving communities. And Virginia’s immigrants are critical contributors to the state’s economy and communities, adding new energy and ideas everywhere from struggling mill towns seeking a second wind to the worker-hungry tech corridors. Immigrants in Virginia today are typically well educated, long-time residents of the United States, with many becoming U.S. citizens and raising children of their own.