Has Pennsylvania Found the Cure for Unemployment?

pennsylvania unemployment No tax breaks for the rich, and avoid "job-crushing" spending cuts -- that's the secret to creating new jobs and boosting middle-class wages, according to a new policy brief from the Keystone Research Center. Their research finds that such initiatives have already been effective in Pennsylvania.

Prolonged joblessness and stagnant wages will continue to stifle tax revenues, concludes Keystone, which also notes that, "by closing these deficits, policymakers can rein in the fiscal deficit, while building on the success of the American Recovery Act and other federal policies, which saved 400,000 jobs in Pennsylvania and prevented the state's unemployment rate from rising above 15 percent."

Pennsylvania is emerging from the recession with job growth exceeding that of many other states. In 2010, the Commonwealth added more than 65,000 jobs, ranking third among the 50 states in the number of jobs created. Adjusting for the size of each state's economy, Pennsylvania job growth still exceeded three-fourths of all states.

"Continued investments in infrastructure, boosting skills and innovation in critical industries, and in unemployment benefits are key to keeping our economic momentum going and reining in the job deficit," said Stephen Herzenberg, an economist and executive director of the Keystone Research Center. "A starting point on the wage deficit would be to raise the minimum wage -- an action taken to help end the Great Depression -- and requiring that companies receiving state job-creation subsidies not pay below market-based norms for their industry."

"By acting forcefully when the economy was on the verge of collapse, policymakers applied the historical lessons of the Great Depression," Herzenberg said. He explains that "pulling back now will cost jobs and set the recovery back. Those who forget history, as the saying goes, are doomed to repeat it."

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