Report: Tight labor market offers ‘new possibilities’ for Pa. workers | Wednesday Morning Coffee

With the state’s economy still in its post-pandemic recovery, a tight labor market and a resurgent labor movement offer new possibilities for the commonwealth’s workers. And if policymakers make the right choices, the state could “enjoy a return to shared prosperity for the first time in decades.”

Those are the top line takeaways from the labor-friendly Keystone Research Center’s annual ‘State of Working Pennsylvania,’ report, which comes just days ahead of this year’s Labor Day celebrations.

“Two unique circumstances that increase workers’ power in the labor market create the possibility of a better future for Pennsylvania workers,” the center’s executive director, Stephen Herzenberg, said in a statement. “The withdrawal of individual workers from the job market and a wave of innovative union organizing—if policy capitalizes on these realities, and has workers’ backs, Pennsylvania can lock in a more equitable future.”

While Pennsylvania’s gross domestic product remains just above pre-pandemic levels — as is the case nationwide — the state added 60,000 non-farm jobs between April and July, according to the new analysis.

And “one constraint on job growth is the still-depressed state of low-wage, in-person service industries, most prominently ‘leisure and hospitality’ (which includes restaurants and fast food),” according to the new analysis. “This sector is still 49,000 below pre-pandemic levels due to the lingering virus and possibly a permanent decline in business travel and eating out.”

And despite ongoing inflation, the state’s workers saw their wages grow during the first two years of the pandemic, the analysis shows. Between 2014 and 2021, “inflation-adjusted, hourly pay rose 9 percent to 19 percent for workers near the bottom, the top, and in the middle of the wage distribution,” the analysis showed.

Even so, as of July, the state’s labor force was 131,000 people less than its pre-pandemic peak.

The shrinkage of our labor force—some 2 percent compared to pre-pandemic, a modest, more than “great” resignation—contributed to a fall in the number of Pennsylvania jobless looking for work (i.e., unemployed people) below the number of job openings in August 2021,” the report’s authors concluded. “Today, there are only six unemployed for every 10 Pennsylvania job openings.”

But, “the number of people quitting each month in Pennsylvania is now more than double the number laid off or fired by employers,” the reported noted.

Workers “collectively, as well as individually, do not want to build back the same—to accept jobs as they were before the pandemic,” the report’s co-author, Claire Kovach, said in a statement.

As unionization efforts across such major employers as Amazon and Starbucks show, “the pandemic further elevated workers’ desire to improve U.S. jobs—the share of Americans who approve of unions in September 2021 reached its highest level since the mid-1960s,” according to the report.

With the 2022 midterm campaigns well under way, and the Legislature set to return to session in September, the report concludes that lawmakers face some pretty pronounced choices in the weeks and months ahead.

It’s a choice between enacting policies that strengthen unions, raise wages, and lift workers’ skills, or anti-union measures and other efforts that could slow the economy.

Choosing the former “could consolidate shared prosperity,” they wrote, while choosing the latter would prompt a “return to wage stagnation and rising economic inequality.”