Study says income gap is growing

A new study of Pennsylvania’s economy uncovered an expanding income gap between the state’s… A new study of Pennsylvania’s economy uncovered an expanding income gap between the state’s lowest- and highest-paid workers.

The 580 highest-paid employees currently earn as much in two hours as a full-time, minimum-wage employee makes in a year in Pennsylvania.

The Keystone Research Center, a nonprofit economic research organization located in Harrisburg, released its 11th annual State of Working Pennsylvania report on Saturday.

“They may not be surprising, but they’re still troubling,” Mark Price, co-author of the report and a labor economist at the KRC, said. According to Price, the trends in Pennsylvania parallel national trends.

“In short, we’re wealthier, and there’s so much more stuff,” he said. “But it’s all flowing to the top.”

The report shows that the average income of low-wage workers went up 17 percent between 1973 and 2004, while the average income of the highest-paid Pennsylvanians rose 278 percent.

Explaining the unique focal points of the study, Ellen Roberts, KRC’s associate director of communications, said, “Because of the disparity the researchers saw, they decided to narrow their focus.”

KRC researchers mainly explored this swelling inequality of incomes in addition to the impact of this year’s minimum wage increase, which jumped from $5.15 per hour to $6.25 per hour in January 2007 and then to $7.15 per hour in July.

While this was the largest gain in wages for low-paid Pennsylvanians since the 1970s, Price said it has done little for most workers.

“The minimum wage is still pretty low and hasn’t affected the average median wage,” he said.

Today’s average median wage is $14.85 per hour, which, after adjusting for inflation, is 16 cents lower than five years ago.

“And if historical trends hold up, the minimum wage won’t keep up with the cost of living,” Price said.

For some student workers on Pitt’s campus, however, the minimum wage increase has made a substantial difference to their pay stubs.

“It’s nice to have the extra pocket money,” sophomore Andrea Sciulli said, after checking out a customer at the University Book Center.

Sciulli and co-worker Loretta Schoemer, both in their second year at the book store, said they were excited to see their pay rate go from $6.15 per hour to $6.25 and finally to $7.15.

“When I heard it was going up I was like, ‘Oh yeah,'” Schoemer said with a celebratory raise of her fist.

But Schoemer, who supports herself and her child, said the wage hike has not, on the whole, made that much of a difference.

“It’s really just an extra dollar, you know?” she said.

KRC researchers concluded that Pennsylvania is in need of a more comprehensive economic plan in order to spread the prosperity.

Price said things like more affordable and available education and job training as well as changes in the tax code, such as a tax rate based on income, are possible avenues in improving the economic situation.

“It hasn’t always been like this,” Price said. “It has the potential of undermining people’s faith in the free market system.”