HARRISBURG, Pa. (KDKA) — For 23 years, the Keystone Research Center has discovered income inequality among Pennsylvania workers.
“The benefits of our economic growth continue to go to mostly a very thin slice at the top,” economist Stephen Herzenberg told KDKA money editor Jon Delano on Tuesday.
The rich keep getting richer, while the rest fall behind.
But Herzenberg, the center’s executive director, said things may be getting better.
“There is a glimmer of hope for working Pennsylvanians in the last 12 months of data,” Herzenberg said.
For the first time in 18 years, Pennsylvanians averaged a 3 percent increase in wages.
The bad news?
Despite a decade of economic growth, CEOs in the state have been slow to share the wealth.
“From the 1940s to the 1970s, working people used to get this kind of three percent wage increase every single year,” said Herzenberg. “In a sense, this is too little too late.”
While all workers have fallen behind, African American workers have suffered the most, losing ground faster than white workers.
“Black workers’ wages haven’t gone up,” Herzenberg said. “And so that’s why typical black workers make roughly ten percent less than they did in 1980. That, to me, is stunning.”
The key, said Herzenberg, is whether CEOs will stop over-paying themselves.
“It’s worked very well for CEOs, who now make 250 times the regular worker, as opposed to 20 times as much in the mid-1960s,” Herzenberg said.
“It’s worked wonderfully well for the top one percent. In Pennsylvania, that group took home nearly half the economic gains in this state,” noted Herzenberg.
But with every Democratic presidential candidate focused on income inequality, Herzenberg thinks CEOs are getting the message.
“They are worried there could be a political backlash,” he said.
That backlash comes amidst studies that suggest many Americans, especially younger ones, are more skeptical than ever about a capitalist economic system, particularly one that denies annual pay raises to those who do the real work while lavishing senior executives.
Recently, the Business Roundtable, made up of 200 major corporate CEOs, said it was time to start reinvesting in employees.
Herzenberg said they could start by encouraging state lawmakers to raise the minimum wage which has been stuck at $7.25 in Pennsylvania for a decade, while all the states around Pennsylvania have increased their minimum wage.