The State of Working Pennsylvania 2004 - The Keystone Research ...

The State of Working Pennsylvania 2004 18
JOB QUALITY, 1979-2003
Wages and salaries account for about three-quarters of family income on average. They account
for an even larger share of the incomes of middle- and low-income families. Wages are, therefore, a
major determinant of living standards for most families and a key influence on income inequality.
This section examines trends in wage levels and wage inequality from 1979 through 2003.
As in previous editions of The State of Working Pennsylvania this edition focuses much of its analysis
on the median wage. The median is the wage earned by the person whose wage falls exactly in the
middle of the wages of all workers. Median wage earners earn more than half of all workers and less
than the other half. The median wage is the best measure of a typical worker’s wage.
Pennsylvania Wages Down Since 2002
After falling from 1979-1989, stagnating from 1989-1995, and rising substantially from 1995-
2000 and 2000-2002, Pennsylvania’s inflation-adjusted median hourly wage fell by four cents per
hour from 2002-2003 (Table 3 and Figure 11). Although the state’s median wage continued to rise
during and shortly after the 2001 recession and remains higher than it was in 2000 (the year before
the recession began), last year’s wage decline could be a result of the long period of job market slack
that began during the recession and continued until earlier this year.
Table 3. Median Hourly Wages in Pennsylvania and the United States, 1979-2003 (2003
dollars)
All Workers Men Women
PA U.S. PA U.S. PA U.S.
1979 $12.84 $12.36 $15.97 $15.55 $9.75 $9.74
1989 12.35 12.36 14.44 14.46 10.20 10.57
1995 12.35 12.14 14.40 13.94 10.64 10.69
2000 13.15 13.07 15.50 14.89 11.26 11.61
2002 13.63 13.47 15.34 15.17 12.10 12.16
2003 13.59 13.62 15.21 15.04 12.16 12.18
Percent Change
1979-2003 5.8% 10.2% -4.8% -3.3% 24.7% 25.1%
1989-2003 10.0 10.2 5.3 4.0 19.2 15.2
1995-2003 10.0 12.2 5.6 7.9 14.3 13.9
2000-2003 3.3 4.2 -1.9 1.0 8.0 4.9
2002-2003 -0.3 1.1 -0.8 -0.9 0.5 0.2
Source: Economic Policy Institute (EPI) analysis of Current Population Survey (CPS) data.
Pennsylvania’s wage performance in the last year lagged behind that of the nation as a whole in both
wage levels and wage growth. During most of the period since 1979 Pennsylvania’s median wage was
higher than that of the nation as a whole but in 2003 it was three cents per hour below the national
median. And while Pennsylvania’s median wage fell from 2002-2003 the national median wage rose
by 15 cents per hour.