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PA Job Numbers Out, The War On Unemployment Insurance, and Inequality

By Mark Price, Third and State

A pile of rusty pennies.

Photo by Davidd

Happy Sunny Friday, people! Now for the not so good news. The job numbers for Pennsylvania came out Thursday, and the overall picture was somewhat disappointing. The unemployment rate edged down slightly to 7.4% and nonfarm payrolls declined by 600 jobs. Focusing on the jobs data, the biggest loser in April was construction, which shed an eye-popping 5,400 jobs. That is a big swing at a time of year when construction projects should be ramping up. Odds are that loss is driven by sampling error rather than real trends in construction activity. Another troubling stat was the loss of 1,700 jobs in the public sector.

Because monthly data are somewhat erratic, you shouldn’t make too much out of any one-month change in employment overall or within a sector. Looking at nonfarm payrolls since October, the jobs picture is somewhat brighter with Pennsylvania adding, on average, 3,900 jobs a month. So Pennsylvania’s labor market, like the national labor market, is continuing to recover.

Now for the bad news: if you were hoping the Pennsylvania economy would finally return to full employment by 2015 (remember, the recession started in December 2007), nonfarm payrolls need to grow by about 10,000 jobs a month. So by that metric, we are a long way from fully recovering from the worst recession since the Great Depression.

It is important to remember that people continue to lose jobs each month, even though the economy is recovering. And because employment hasn’t fully recovered, those people who do lose their jobs face a long line of other people looking for work.

Fortunately for them and for the economy as a whole, workers today who lose a job for reasons beyond their control can rely on the unemployment insurance system to provide them with a modest lifeline to meet their very basic needs, like buying food and paying the rent or the mortgage bill. Unfortunately, the economic crisis has created an opportunity for the business lobby to push for changes in the state’s unemployment insurance system that will make the system less effective when the next recession hits. As Rick Bloomingdale of the Pennsylvania AFL-CIO explains, Governor Corbett and a lot of Pennsylvania lawmakers are supporting these very shortsighted reforms.

Since when did members of Pennsylvania’s General Assembly become so shortsighted that they think it’s good to pass legislation that harms the most vulnerable people? This would be the consequences of proposals to restore the solvency of our state’s unemployment compensation fund on the backs of unemployed persons.

These are the persons who have most suffered from the recent recession and for whom this unemployment insurance was established. Our national history reflects a legacy of helping those who need help, instead of saying, “sorry for your luck,” or “gee, too bad, if only you worked a few more weeks.” We must get back to the ideal that helping those who need help is the right thing.

The governor has already signed into law a bill that cut UI eligibility and reduced UI benefits for thousands of unemployed Pennsylvanians. Yet less than a year later, the administration urges more cuts that likely would deprive an additional 50,000 individuals of the unemployment insurance lifeline. When did we get so selfish and shortsighted?

It is easy to assume that trends in income inequality reflect rising top incomes on Wall Street alone, but as the Pittsburgh Post-Gazette reports this morning, outrageously high salaries are not limited to the masters of the universe who live in Manhattan. The reality is that those high Wall Street salaries end up creating room for compensation committees in other parts of the economy to reward executives and managers with higher and higher salaries. In this way, the growth in top incomes are more about keeping up with the Joneses than about merit.

The West Penn Allegheny Health System, which lost $75 million over the first three quarters of the current fiscal year, paid out $17.35 million two years ago to 12 administrators who have left the organization, including nearly $9 million in retirement and other deferred compensation, according to its recent tax filing….

Most prominent among the departed leaders is former WPAHS president and CEO Christopher Olivia, whose total reported compensation for 2010 amounted to $7.39 million, or nearly $1.5 million more than Jeffrey Romoff, president and CEO of the much larger UPMC. Of that $7.39 million, about $5.4 million was for retirement or deferred compensation.

Finally this morning, Catherine Rampell of The New York Times explores new data on mobility released by the Pew Center on the States.

While Rampell’s exploration is interesting, Travis Waldron at Think Progress does a better job illustrating the key findings and their implications.

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