Racial Wage Gap

The best way to advance policies to raise living standards for working people is for diverse groups to recognize that they share more in common than not. Since class identity has often been racialized, one of the greatest challenges to rebuilding the economic power of the working class lies in establishing multiracial solidarity on a national scale. It is important to remember that the same special interest groups that fund the opposition to policies such as the minimum wage and paid sick leave, and that support efforts to undermine collective bargaining power, are often the same ones aligned with support of voter suppression tactics that limit voting among people of color, low-income individuals, students, seniors, and people with disabilities. The best way to advance the needed economic policies is for diverse groups to recognize that they share more in common than not and work together to achieve their overlapping and intersecting agendas. Getting to that point requires honesty and a collective reckoning about race, white privilege, and institutional racism, with respect to the costs and benefits to each of us.

Advancing policies that address persistent racial disparities while also tackling class inequality will require abandoning the zero-sum mindset that says one group’s set of issues is totally distinct from and in direct competition with another’s. Overcoming this trap begins with defining a broader view of how all the issues are related. It will take a considerable amount of ongoing effort to shift the dominant narrative from one that divides the masses to one that creates a new world of possibilities that benefits all of us.

Publications

Beyond Kentucky’s low unemployment rate: How workers are really faring this Labor Day?

Op-Ed: “The longest economic recovery on record and a state unemployment rate of 4.3% sounds like a strong foundation for Kentuckians’ prosperity. But a close look at the numbers this Labor Day shows an economy in which many Kentucky communities still lack jobs, especially quality jobs families need to thrive.”

State of Working Pennsylvania 2019

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.