Friday, September 21, 2012

Stunning & Bad Fact: PA Unemployment Rate No Longer Less Than US After Rising To 8.1%

For nearly a decade, Pennsylvania's unemployment rate had been below, and often considerably below, the national unemployment rate.  That was the case for nearly every month of Governor Rendell's two terms, and Pennsylvania was a national leader in creating jobs in 2010.  Those days are sadly gone.

Pennsylvania's unemployment rate rose again in August from 7.9% to 8.1% and now matches the US rate of 8.1%.  articles.philly.com/2012-09-20/news/33978393_1_national-unemployment-rate-jobless-rate. The consequences of devastating education cuts, mistaken budget priorities, and backwards economic development policie  enacted over the last two years are now crippling Pennsylvania's economy.

Relying on the natural gas industry alone to bring prosperity to Pennsylvania is unfair to the industry and a colossal misunderstanding of the size and diversity of Pennsylvania's economy.  Pennsylvania's unemployment situation is worsening, despite the real boost from gas production, because state policies are undermining education, health care, transportation, and clean energy industries among many.  Pennsylvania is no longer making adequate investments in infrastructure and other strategic assets that create short-term employment and long-term competitiveness.

Next door in New Jersey, austerity economics is working just as it is Pennsylvania, with New Jersey's unemployment rate rising to 9.9%.  Though it has fervent supporters, austerity economics undermines job creation and weakens the middle class.  It has failed in New Jersey and in Pennsylvania.

As President Clinton says: "But the problems with any ideology is that it gives the answer before you look at the evidence.  So you've got to mold the evidence to get the answer that you've already decided you've got to have.  It doesn't work that way.  Building an economy; rebuilding the economy is hard, practical nuts and bolts work."

The enormous cuts to public education in Pennsylvania were an ideological choice and fully avoidable. Those cuts put tens of thousands of teachers directly out of work. And when a teacher loses a job, a waitress or a store clerk will too as the loss of purchasing power in communities kills thousands of non-education jobs.

The education cuts are one reason, among many mistakes in the last two years, that the days, when Pennsylvania's unemployment rate was always below the national average, ended in August.  But education cuts and the failure to make strategic investments in transportation and infrastructure are a double whammy.  They hurt now and damage the future by undermining our children's and state's readiness and productivity.


11 comments:

  1. Pres. B J Clinton signed the repeal of the Glass Steagal Act which transformed traditional banks into investment banks. He also pushed banks to lower their standards in home loans as a precondition to merger approval. Fannnie Mae and Freddie Mac were encouraged to buy these sub prime mortgages even though people such as Dr. Ron Paul warned of the folly such poor business practices. Austerity is not popular with the CENTRAL PLANNERS and SOCIALISTS in the democrat party because it will shrink the size of government and put unproductive gov. workers out of their free ride.

    "For any revival which is merely due to artificial stimulus leaves part of the work of depressions undone and adds; to an undigested remnant of maladjustment, new maladjustment of its own which has to be liquidated in turn, thus threatening business with another crisis ahead."
    Joseph Schumpeter

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  2. Ideology makes things simple and wrong. No need to think. No need to test empirically. Facts are to be molded.

    I suppose the 20 plus million jobs created during the Clinton Presidency are not real.

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  3. I spoke of the facts of Pres. Clinton's legacy. It is not ideology. Clinton benefited from a peace dividend after the fall of the the Soviet Union. Capital was freed up to be used in more productive activities.Congress was controlled by the Republicans for most of Clinton's term. Gov. Rendell served 6 out of the 8 years of his term in the era of the artificially induced BOOM in housing that swept the nation largely due to the Fed keeping interest rates too low for too long and lenders freed to give loans to anyone who wanted one. The "ARRA" (American Reinvestment & Recovery Act) and "Build America Bonds Act" helped state and local governments avoid the cuts in 2009 and 2010 they are forced to make now due to lack of funds. Joseph Schumpeter's quote merely points out the obvious, when help from the federal government is removed states and local governments are forced to have their day of reckoning because they can't spend money they don't have and can't print money like the Fed can. They are compelled to cut their expenses and should shrink in size. AUSTERITY to central planners and socialists is a term to be denigrated because it would cause them to lose their jobs and statist plans to be cut back. We are hopelessly in debt due to not spending within our means.

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  4. To dismiss the Rendell record of having an unemployment rate below the national average, you point to 2 national factors--ARRA that applied to all 50 states and the artificially induced national housing boom. Both of those factors impacted all 50 states but PA did better than the national unemployment rate for nearly 10 years.

    Now PA is no longer doing better than the national average and state budget, economic development, education and other policies have changed. The change has taken us in the wrong direction. This keeps up we will have an unemployment rate higher than the national average. What excuse then?

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  5. Perhaps PA's development of natural gas aided Gov. Rendell's employment record? Coal sales to China? NJ and NY migration? Unless all those Amish Markets did the trick. They do have some tasty items for sale. Gov. Rendell seems like a nice guy and I didn't mean to insult his record. I'm not sure what you're referring to when you say things are being taken in the wrong direction other than your reference to austerity. I don't know PA's financial position but if it's like most all other states it is dealing with having not enough revenue to cover planned outlays and must cut expenses accordingly. As stated on this blog natural gas drilling is not expanding as rapidly as in the last few years because the price has dropped dramatically due to the glut in supply. If the price rises PA will see a jump in employment because more drilling will commence. Since PA has so much natural gas why hasn't someone built an export terminal in Philadelphia? Natural gas gets a premium price in Europe. Is the pipeline that is planned to go to NJ suitable for this?

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  6. Here is what I mean by going in the wrong direction. PA consistently did better than the nation for about a decade on the unemployment rate. PA was below and often much below the national unemployment rate. For the first time in a decade, PA now has an unemployment rate no better than the national unemployment rate. In that sense we are headed in the wrong direction. If that continues, PA will soon have an unemployment rate higher than the nation. Governor Rendell worked at creating jobs everyday much in the way Bill Clinton says you have to in the quote in the original posting. He made budget choices that supported education. He invested strategically in water, sewer, transportation, environmental improvements, tourism. He had an energy policy that pursued all energy forms, including energy efficiency, and gas only became a real positive in the 6th year of his term (2008). He had an economic development policy that focused on health care, education, agriculture and not just gas. It worked. What is happening now is not working.

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  7. I think it's kind of like my small city in TN we had one major employer for decades, and any other companies were somehow dependent upon them. For example, printing presses printed for this chemical company, etc. Anyway now that it's laid off a lot of people, so it hurt the whole city and surrounding areas because of course other businesses had to as well. The printing press and some of the other businesses have closed in the past 15-20 years. Now there's pretty much the chemical company, hospitals, and retail jobs as the main employers. Another nearby city has grown a lot because it didn't put all of it's eggs in one basket I think it's always bad to put too much hope/pressure in one area.

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  8. John--enjoy your energy outlook and comments. I would caution (all) about politics demeaning such an important topic. Politics = toxic wastewater, regardless of affiliation.

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  9. Thanks for the comment. The key is not the topic. The key is how does one approach the topic. This blog is about energy, environment, the economy, and politics. Discussion from me is fact-based, civil, and open to new information and different perspectives. That applies to politics. Politics plays a significant role and too often it degenerates to fact-free ideological junk.

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  10. Just looking in a different general perspective, why not try try engaging ourselves to the agricultural production of the stare? It might help increase our overall rank in agricultural production. We cannot blame most of the companies if they are looking for well-experienced applicants suited for the blue-collared jobs. What matters is that we exerted effort in helping the state's income increase. Educated well or not, everyone can take part in the agricultural production.

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  11. I agree just as much as anyone that New Jersey needs a change. Christie had his chance to increase employment and failed on several promises to bring more jobs to NJ. The new upcoming candidate, Buono carries a good message and I do believe it will resonate with many New Jersey residents. It seems that Christie is afraid to address this issue, and really doesn’t seem to have any plans to lower the unemployment rate.

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