Manufacturing is still a large part of the Pennsylvania Economy. Even after shedding nearly 84,000 jobs during the great recession, manufacturing is rebounding in Pennsylvania. Today, the sector employees more than 571,000 people in the Commonwealth of Pennsylvania. While the improved manufacturing environment is great for Pennsylvania, it is also great for the manufacturing workers. The average compensation for someone who works in manufacturing, not just assembly line workers but plant managers and other executives, is more than $69,000. That's well above Pennsylvania's median household income, which was $52,548 in 2013, according to the U.S. Census Bureau.
With manufacturing's above-average wages, new Gov. Tom Wolf has identified increasing the number of manufacturing jobs as one of his top economic priorities. In the Governors proposed 2015/2016 state budget, Governor Wolf has set aside $5 million for new tax credits for manufacturing companies that add jobs in the Commonwealth. The details of Wolf's Made in Pennsylvania Job Creation Program are still being worked out. The broad outline is that companies would need to increase their annual taxable payroll by at least $1 million in order to qualify for the credit. The jobs created would have to be full-time, include health insurance, and pay at least as much as the average local wage. And the company would have to keep the jobs for at least five years.
Under the tax credit Wolf has proposed, manufacturing companies would get a one-time credit of 5 percent of the amount by which they increase their payroll -- or $50,000 for each $1 million added. Money to fund the program would come from eliminating existing "under-performing" tax credit programs. The Department of Community and Economic Development is reviewing which programs should be eliminated.
The tax credit is one of a number of initiatives Governor Wolf wants to put in place to try to boost manufacturing. Governor Wolf’s proposed budget allocates $5 million to a University Manufacturing Consortium to help research universities in Pennsylvania develop advanced manufacturing techniques and bring products and services developed by university researchers to market. Governor Wolf has also proposed a $10 million increase in funding for partnerships among companies in a given industry -- not limited to manufacturing -- to create programs to train people to meet industry-specific needs.
The tax credit, like the rest of Governor Wolf's budget, is subject to passage by the Republican-controlled General Assembly.