Pa. workers’ pay falls behind inflation
When Catherine Albarracin heard the latest data on how quickly Pennsylvanians’ pay is falling behind inflation, she wasn’t surprised because she has two children and goes to the store regularly.
Those trips, the Upper Macungie Township resident said, have fallen into a pattern of smaller packages and higher prices.
“I think it affects everything. Every aspect,” Albarracin said of workers’ declining purchasing power. “Now that we are going back to school I don’t know how much I am going to need to buy stuff for the kids.”
The Pennsylvania Independent Fiscal Office told The Morning Call that “real average hourly earnings” — a measure of workers’ pay adjusted for inflation — declined by 3.9% in June.
That contraction was the biggest so far this year.
While observers agree federal policies play a bigger role than state laws in dynamics that lead to inflation, state lawmakers, who return to Harrisburg next month, have plenty to say on the topic. Asked about their plans to help deal with inflation, top legislators pointed to a series of initiatives in the just-passed state budget, a proposal from the governor to send checks to qualified residents, and the need for job creation, among other things.
Meanwhile, Kathy Landis of Kutztown, who is 75 and living on a fixed income, said the contraction of buying power is obvious.
“All you have to do is go in the grocery store,” she said. “Every week I see change. Something goes up.”
The IFO said the 3.9% decline in real average hourly earnings for all private workers in June came after a series of five declines this year: January, 0.1%; February, 3.3%; March, 2.6%; April, 3.7%; and May, 3.5%.
It provided the following breakdown by sectors for the June data:
• Leisure and hospitality: +1.7%
• Construction: -4.5%
• Manufacturing: -1.3%
• Trade and Transport: -7.6%
• Professional and business: -0.5%
IFO Director Matt Knittel in June said that inflation “is really a redistribution of wealth. Some benefit from it and some are worse off.”
Since lawmakers left Harrisburg in early July, Gov. Tom Wolf and fellow Democrats in the Legislature have continued an effort to send $2,000 checks to lower-income households in Pennsylvania.
Republicans say that will worsen inflation that already is near its highest level in four decades.
A spokesperson for House Republicans, Jason Gottesman, said Wolf and his “legislative allies” this year have promoted policies that crush real wage growth while Republicans have been trying to fight inflation. The “most vulnerable” in the state, he said, will be helped through items in the new state budget that include one-time money for property tax, rent relief and energy assistance, as well as investments in child care and a program that provides food for the needy.
Republicans are also promoting a recently passed cut in the corporate net income tax, seeking tax “fairness and simplification,” and being the leaders on “fiscal prudence,” Gottesman said.
The House Democrats’ spokesperson, Nicole Reigelman, cited their role in pursuing the property tax, rent and child care measures recently approved in Harrisburg as evidence of their desire to combat inflation, in addition to a new program that provides grants or loans of up to $50,000 to repair or adapt homes.
Reigelman said House Democrats will keep supporting Wolf’s proposal to send out checks. And, she said, they will support a series of bills “aimed at lessening the impact of corporate greed and curtailing price-gouging and price-fixing.”
Republican Senate Majority Leader Kim Ward of Westmoreland County said the state needs to invest in people and not “philosophical ideas,” as well as to make sure businesses stay in the state.
“Our goal is to create better job opportunities with higher wages, elevate home values, reduce taxes and provide additional benefits to all Pennsylvanians by allowing businesses to reinvest in their employees,” Ward said.
Senate Democratic Leader Jay Costa said his caucus supports checks to residents, an increase in the minimum wage and a proposal made this summer by Northampton County Sen. Lisa Boscola for a temporary stop to the state’s gasoline and diesel fuel taxes, which are some of the highest in the nation.
“We know families are struggling to make ends meet,” Costa said. “But we need the support of our colleagues in the GOP caucus to take seriously the struggles of their constituents and act alongside us to deliver the relief they need to weather this period of inflation.”
Albarracin, the Upper Macungie mother of two, said having less buying power in stores means being smarter with your money.
“It’s a lot of coupons and a lot of sales,” she said.
Albarracin said the feeling is that you cannot be as free with your money as in the past.
“Now you have to say, ‘Is that necessary right now?’ “ she said.