Thursday, March 15, 2012

Gas Jobs Alone Are Not Enough: PA Jobs Performance Poor In January & 2011

The January 2012 jobs report for Pennsylvania is a stinker and documents that the Pennsylvania economy comparatively performed weakly in 2011, losing ground to most other states and the nation.  Pennsylvania lost 9,000 jobs in January, while 37 other states added jobs, and the nation grew jobs by over 200,000. The report underlines that the gas boom is creating desperately needed jobs, but that Pennsylvania's economic development strategy must be broad, diverse, and go well beyond natural gas extraction.

Digging into the Bureau of Labor Statistics data unearths more troubling facts.  For example, the nation and 22 other states reduced their unemployment rates by twice as much as Pennsylvania did during 2011.  Unemployment was down by 0.8% or more in America and 22 states, while it declined just 0.4% in Pennsylvania.  Indeed, 38 states were able to reduce unemployment more than the Commonwealth did in 2011.

Among the 22 states that cut their unemployment rate twice as much as Pennsylvania or by 0.8% or more are Ohio where the unemployment rate fell by 1.3%; Maryland by 0.8%; Vermont by 1.0%; Connecticut by 1.3%; Wisconsin by 0.8%; South Dakota by 0.8%; Minnesota by 1.2%; and Colorado by 1.0%.

Pennsylvania's reduction in unemployment of just 0.4% trailed states, whether they started 2011 with a higher or lower level of unemployment than the Commonwealth.  California reduced its unemployment rate by 1.2% and Michigan cut its unemployment rate by 1.9%, as the auto industry roared.  But South Dakota cut its unemployment rate from 5% to 4.2% and Vermont reduced its 6.0% rate to 5%.

Pennsylvania's 2011 jobs performance is especially disappointing because it is a stark reversal from the period of 2010 into the first quarter of 2011, when Pennsylvania was among the top 5 states in creating jobs. The 9,000 jobs lost in January are a horrendous way to begin 2012.

Job creation requires world class education, skilled, healthy people, world class infrastructure, innovation, and effective public-private partnerships to compete in the modern world. While the gas industry has created low unemployment rates in Bradford, Tioga and other counties, the economic boost provided by gas can never be enough to bring prosperity to more than 12 million Pennsylvanians.  We must not fall into the trap of relying exclusively on the gas industry to lift all boats.

Hopefully, 2012 will be a better jobs year than 2011 was for Pennsylvania, but the January jobs report is far from comforting.

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