Latest Pennsylvania Employment Numbers Point To Continuing Employment Crisis

Keystone Research Center Says State Policy Action Needed

Harrisburg – The loss of 3,600 Pennsylvania jobs in December suggests the state still faces a deep employment crisis, according to an analysis by the Keystone Research Center of PA Department of Labor and industry jobs data released late Friday.

“We should not let media focus on December’s shockingly poor national job-creation number lead us to overlook even worse state-level numbers,” said Stephen Herzenberg, an economist and executive director of the KRC.

Unlike in Pennsylvania, U.S. job growth at least was slightly positive, although the national gain of 1,000 fell far short of the forecasted 150,000 increase.

Department of Labor and Industry data show that, since December 2002, Pennsylvania has lost 11,300 jobs overall, and 30,900 jobs in manufacturing. According to the Pennsylvania Manufacturers Association, over 1,400 Pennsylvania manufacturing firms have closed in the last year.

“Pennsylvania manufacturing is in crisis,” Herzenberg said. “Losing jobs at the rate we did in 2003 undercuts the quality of life in Pennsylvania, especially in manufacturing-dependent communities, which include much of rural Pennsylvania.”

Previous KRC research shows that manufacturing still accounts for more than 20 percent of employment in many of the state’s rural counties.

Herzenberg said that misguided federal policies contribute to the weakness of the job market.

“With wages stagnating for the middle class, and tax cuts targeted at the affluent, consumer demand has been sustained only by borrowing in the form of mortgage refinancing and credit cards. If we don’t see a robust employment and wage recovery before consumers run out of credit, we could spiral into another, and deeper, recession.”

Pennsylvania’s Paul O’Neill, former Bush Treasury Secretary and CEO of Pittsburgh-based Alcoa, also points to the misguided Bush policy in his new book The Price of Loyalty. Appearing on 60 minutes on CBS this Sunday, O’Neill said that President Bush questioned the need to cut taxes for the rich again before the most recent round of such cuts. The President’s advisors prevailed upon him to implement the cuts, leading to O’Neill’s departure from the administration.

Herzenberg said that Pennsylvania can’t wait for federal policy or the market, by itself, to correct the state’s jobs crisis. Pennsylvania policymakers must act now to boost the economy.

“What is needed is state action to work with manufacturers and employers in other key industries to adapt to today’s economic realities. This means new sector-specific initiatives in areas such as workforce development, access to capital, modernization, and commercialization of new products. In the long run, even with better federal policy, state-level initiatives are essential for Pennsylvania to thrive in a global economy.”