Think Tank: Stimulus Works, Send More.

In its annual Labor Day weekend “State of Working Pennsylvania” report, The Keystone Research Center finds the federal stimulus program is working. Economist Stephen Herzenberg says the spending has, “Pulled the economy back from the brink.” Herzenberg says before the stimulus program began pumping money into the economy the state was loosing 30,000 jobs a month and it is now shedding just 10,000 jobs a month. The report also looks at incomes in the state. Herzenberg says the middle class has been particularly hard hit by the recession. He calls the numbers “sobering.” Median income earners in the state saw wages drop by 2% over last year adjusted for inflation and Herzenberg says the numbers are even worse form families making $50,000 a year. (The 80th percentile in PA.) He notes the losses are real dollar losses not just declines caused by inflation. The center says while the stimulus is working it needs to be expanded if it is to shore up the economy long enough for other sectors to rebound. Herzenberg says "Both federal and state governments need to keep their feet on the economic accelerator this year and next because it will take at least that long for private sector demand to rebound." He says in the second quarter of 2009 consumer spending continued to drop while government spending surged. The study notes that while there are more than a half million unemployed Pennsylvanians, the state as a whole has faired better than the nation. However, Herzenberg points out Pittsburgh and Philadelphia are propping up the center of the state, which has seen much higher unemployment rates. The study reports, “To bring the share of the working-age population who are employed back to the pre-recession level in Pennsylvania, 230,000 jobs would have to be added to the state's economy.