1. Jobs up 20%--yes but.

One thing that Benefield got right is that, since 1979, the number of jobs in Pennsylvania is up 20% while the population is only up 4.7%.

And this contradicts evidence of wage stagnation how?

Who hasn't heard the line about the former factory worker, who says, "Yeah, there are lots more jobs, and I have three of them."

More jobs can be one way of measuring economic growth, but they don't mean that everyone is doing better.

2. Somebody is buying lots of stuff so the middle class must be doing great.

According to Benefield, wages can't be stagnant because "we" are all buying TiVos, iPods, and wireless internet services. He then adds, "we are also buying more and better versions of older products and services", "SUVs and mini-vans", "more health care and legal services", "more trips to Disney World", "more students to college."

And this contradicts evidence of wage stagnation how?

Yes, total output, income, and consumption in Pennsylvania have increased substantially since 1979. Increased consumption means Pennsylvanians, as a group, have more things, but not that we're all better off, especially given the drivers of that consumption:

a) Increased total working hours among middle-class families: working more hours to maintain the same standard of living. Gee, that's progress.

b) Rising consumer debt: 12% interest on that iPod might not be the best investment.

c) And rising incomes and wages among the most affluent Pennsylvanians: wealthy people can consume more, which is fine, except that doesn't really address the middle class standard of living.

Expanding total consumption has not been the result of rising wages for middle- and low-income workers. Adjusted for inflation, the median wage in Pennsylvania is now 5% above its 1979 level and typical low-wage earners make 2% less than in 1979. Meanwhile, high earners make 22% more, very high earners a lot more than that, and productivity is up 71%.

3. Nathan finds the missing middle.

The next part of Benefield's argument must be quoted in full because you won't believe any paraphrase. Still rebutting the fact that inflation-adjusted wages have stagnated, he says: "And obesity is cited as one of the main problems of today. Not only are Pennsylvanians not starving, they are buying and eating too much food."

Because Pennsylvanian's are gaining girth, their wages must be rising? We have a new way to measure wage trends in Pennsylvania. We can dispense with tiresome statistical methods and instead have the Census Bureau go door-to-door with a scale.

At the risk of engaging in a ridiculous debate, we point Benefield to evidence that obesity can be a symptom of poverty: carbs are the cheapest calories; the lowest-cost form of eating out (fast food) is a time saver for working families juggling two jobs or work and family responsibilities; people without health insurance are more likely to let the onset of diabetes go untreated. Benefield may want to read An Economic Analysis of Adult Obesity, online at the National Bureau of Economic Research.

Enough said.

4. The pie has increased, but not everyone's piece.

Benefield points to the fact that wages are not the only source of income and that "'business owners' income has also grown much faster than wages." He also notes a substantial rise in per capita income. But these points don't help his case.

Sure, per capita income and total income in Pennsylvania have increased a lot. But that doesn't contradict the reality that many middle- and low-income families have gained little (for income as well as wage data, see the State of Working Pennsylvania 2006, online at www.stateofworkingpa.com

Adding non-wage income to the picture (such as profits, dividends, and capital gains) doesn't help middle- and low-income families much because these income sources are very concentrated at the top of the income scale.

5. The importance of government transfer programs.

Benefield notes that transfer payments have grown. Driven by Social Security, Medicaid, and Medicare, programs that benefit the broad middle-class, that is true. In fact, these programs have been critical to holding middle America together at a time of wage stagnation. And what is one of the main priorities of conservative organizations such as the Commonwealth Foundation? Dismantling these programs.

A state upon a hill.

Because we look honestly at economic trends for the middle class and low-income families, we sometimes sound like the bad news bears.

Let's be clear. There is some good news in Pennsylvania: economic growth, profitable businesses, rising productivity, and a growing commitment to smart and equitable growth among policy makers.

But, very few people would argue that we've achieved the appropriate level of shared prosperity. Many middle-class families in Pennsylvania, and in the nation, are doing about the same as they were three decades ago, but working harder and longer to get there, and far too often feeling unsure about their future prospects. In some parts of the state, they are doing worse than three decades ago. The lowest-wage earners across the state are doing slightly worse. Hence the term wage stagnation.

Compare that to productivity gains and the story seems clear: the middle class, even the bottom two-thirds of all workers, aren't getting the rewards from economic growth. We think we can do better, and we've even outlined an economic agenda that could begin to take us there www.keystoneresearch.org/agenda.

Perhaps that is the text book difference between a conservative think tank and a progressive think tank. They want to protect the status quo. We want to analyze the status quo, but can imagine something better.