Pennsylvania Had 47,000 Fewer Jobs In 2003 Than Data Previously Showed: State In “Employment Recession”

Annual Revisions to Jobs Data Cast PA Economy in Worse Light

National Wage Data Show Workers Losing Purchasing Power

Harrisburg – Revised data for December 2003 show that Pennsylvania had 47,000 fewer jobs than previously reported according to an analysis of new government figures by the Keystone Research Center.

Every year statistical corrections are made to employment data reported by the states for the previous year. The revised data are generally considered more accurate. Corrections to the data reported by Pennsylvania now show that the state has lost jobs for nine months in a row.

“The job numbers suggest that, in spite of the ‘official’ recovery, Pennsylvania is experiencing something like an employment recession,” said Stephen Herzenberg, an economist and executive director of the Keystone Research Center.

Herzenberg referred to the idea that the national economy is said to be in recession when it has negative GDP growth for two consecutive quarters.

“The current circumstances are a puzzle for economists,” Herzenberg said. “Nationally, the economy is growing as measured by GDP and corporate profits, but it is not adding jobs in large numbers.”

The last recession, which began in March 2001, ended in November 2001.

“One thing that we can be certain of,” said Herzenberg, “is that the promises made by the Bush Administration about new jobs look more and more like fantasy. Had the Administration’s projections held, Pennsylvania should have generated 105,600 new jobs since implementation of the President’s most recent round of tax cuts in July 2003.”

Since February 2003, according to the Pennsylvania Department of Labor and Industry, the Commonwealth has lost 31,800 manufacturing jobs, continuing the long-term erosion of some of the best paying jobs in the state.

Of the economic sectors tracked by the Department, leisure and hospitality, and education and health services posted the largest gains over the last year.

In 2002, the last year for which wage numbers are available, Pennsylvania manufacturing jobs paid $42,852 a year, leisure and hospitality jobs paid $14,133 a year and education and health service jobs paid $33,724. "We are continuing to trade well paying manufacturing jobs for less well paying service jobs."

Herzenberg noted that national wage data, released last week, showed a year-over-year average growth in wages of only 1.6 percent, or 0.3 percent below the 1.9 percent national inflation rate.

“This kind of wage performance again raises questions about how sustainable the current recovery is going to be. A great deal of spending has been funded from non-wage sources, such as mortgage refinancing and tax cuts. If wages don’t begin to recover soon, growth as well job creation may begin to falter.”

On March 5th The New York Times reported Federal Reserve numbers showing that U.S. households expanded their debt by 10.4 percent in 2003, the biggest percentage gain since 1987.

A review of the most recent PA economic employment data, including a chart comparing reported with revised job numbers for 2004, is available on KRC’s economic snapshot Web page at: www.keystoneresearch.org/snapshot. KRC press releases are now available via RSS news feed at www.keystoneresearch.org/KRCRSS/krcrss.html