Our Economic Future

By Bill Cahir

The next congressman from Pennsylvania's Fifth District must partner with state and local officials, as well as private-sector leaders in agriculture, alternative energy, higher education, banking, health care, telecommunications, and high-tech research to make Pennsylvania a better place to launch new businesses, retain human capital and reclaim older urban areas. And all of these changes must have a single focus: Creating good jobs.

Economic changes of the 1990s and 2000s have not been kind to central, north-central and northwestern Pennsylvania. Wages are stagnant or in decline. The number of people who lack health insurance is rising sharply, and even people with well-paying jobs have seen health premiums spike. Young people are leaving the Fifth Congressional District and the Commonwealth in droves to find work in other parts of the country. The industrial sector, in decline for generations, actually may be accelerating the rate at which manufacturing jobs are being eradicated or shipped overseas.

"Population growth has remained minimal," the Brookings Institution said in its landmark report about the Pennsylvania economy in 2003. "Development is occurring mainly thanks to household shifts out of older places and into new ones. And the economy ranks near the bottom of states in employment growth and below-average on wage growth."

Pennsylvania's median income reached $46,259 in 2006, according to the U.S. Census Bureau. That was $2,200 below the median income nationwide.

The national picture was not all that pretty, according to the Center for Budget and Policy Priorities. By 2006, the inflation-adjusted income for households headed by workers under the age of 65 actually fell $1,300 below the level reached during the nation's recession in 2001.

Lawmakers in Washington over the past eight years have passed two major tax cuts for the wealthy, an ill-considered stimulus package and a litany of spending bills aimed at promoting their reelection prospects.

But they have done little or nothing to improve the economic security of people working in Pennsylvania agriculture, in service jobs like education and health care, and in the troubled manufacturing field. Federal officials have stood by quietly as governors and state legislators have wrestled with major infrastructure problems. There has been no real partnership between federal officials and states, cities and boroughs trying to promote economic development and recovery in Pennsylvania.

The Pennsylvania economy is headed in the wrong direction.

• Pennsylvania has hemorrhaged 180,000 manufacturing jobs since 2000 alone, according to the Pennsylvania AFL-CIO.

• The poverty rate in Pennsylvania reached a higher level (11.9 percent) in 2005 than it did during the 1979 economic crisis (10.5 percent), according to the U.S. Department of Agriculture's Economic Research Service.

• The share of Pennsylvanians who did not have health insurance was far higher in 2006 (10 percent) than it was in 1999 (7.7 percent), according to the U.S. Census Bureau.

The federal government has done more harm than good. It has passed major trade pacts, such as the North American Free Trade Agreement, without requiring other nations to adopt living wage and environmental standards. Lawmakers effectively have encouraged employers to export well-paying jobs. Members of Congress have compounded the difficulties faced by state and local governments, and even local school boards, by creating new educational, environmental and accounting mandates.

Now, with whiplash-quick changes in the economy, the income that Pennsylvania workers have earned in overtime pay and in second jobs has been eroded, too. Spikes in gasoline and home heating oil prices, food prices, and fees for services like child care -- and the ever-rising cost of college tuition -- have made it difficult even for two-salary families to pay their bills, meet unplanned expenses and save for retirement.

The United States is not a command and control economy. Wages are not set by a communist politburo. Politicians do not single-handedly create good jobs.

However, the federal government can play a positive role in promoting economic growth and in providing a safety net to people who lose their jobs and their health and pension benefits due to the rapid-fire evolution of the economy into an Information Age hybrid.

The next congressman from Pennsylvania's Fifth District must see this mission clearly and partner with state and local officials, as well as private-sector leaders in agriculture, alternative energy, higher education, banking, health care, finance, telecommunications, and high-tech research to make Pennsylvania a better place to launch new businesses, retain human capital and reclaim older urban areas. And all of these changes must have a single focus: Creating good jobs. It can be done in Pennsylvania, and relatively quickly, if voters turn away from a discredited political theory, supply-side economics, that has done nothing but expand the deficit and further concentrate wealth in the hands of the nation's most privileged few.

The next federal lawmaker representing the Fifth Congressional District must make investments aimed at creating the next generation of well-paying jobs in Pennsylvania. That strategy must:

• Encourage public investment in alternative energy, including solar, wind, and other renewable fuels;

• Fund vital infrastructure projects, including the repair of bridges and highways and the construction of new public schools;

• Allow people on farms, small businesses and the self-employed to pool their power to buy health insurance at affordable rates;

• Offer grants and no-interest loans that will help conserve agricultural lands and keep family-owned farms in business;

• Fund scientific research, as well as math and science education, to spark the spin-off of new businesses from colleges and universities;

• Reclaim abandoned mines, reduce the acidic pollution of streams and ensure that Pennsylvania fisheries can be revived;

• Offer tax incentives to those manufacturing businesses that keep and create jobs at home.

• Fund the environmental reclamation of brown-fields and the redevelopment of cities and boroughs;

• Promote the deployment of broadband Internet access to rural areas so that small businesses in Pennsylvania can compete against anyone in the world; and

• Invest in human capital, including higher education, new job-training programs and vocational education initiatives targeted at people who do not go to college.