Pennsylvania is proving that a state can have the advantages of falling national unemployment and a massive gas boom but still create rising unemployment, if it makes enough mistakes on education, transportation, alternative energy, and tax policy. Pennsylvania's unemployment rate rose from 7.4% in May 2011 to 8.2% in September 2012. www.bls.gov/schedule/archives/laus_nr.htm#2011.
During this same period, America's national unemployment rate fell from 9.0% to 7.8%.
Since May 2011, Pennsylvania's unemployment rate has risen 0.8 percentage points, but America's has fallen by 1.2 percentage points. May 2011 is when Pennsylvania's unemployment rate stopped declining from the peak reached in 2009. It is also when the 2011-12 state budget that made massive cuts in higher education and K-12 public education and that failed to make necessary investments in transportation began to force huge lay-offs among teachers and local school tax increases. Pennsylvania has destroyed approximately 19,000 education positions in 2011 and 2012.
Pennsylvania's terrible economic performance since May 2011, while the nation created millions of jobs and cut substantially its unemployment rate, has ended the decade long period during which Pennsylvania had an unemployment rate below the national average. As of September, Pennsylvania's rate of 8.2% was 0.4% higher than the national rate of 7.8%.
How could Pennsylvania mess up so badly? How could Pennsylvania not have an unemployment rate below the national average, especially given the gas boom?
The Marcellus gas boom is real and lasting. It is a major boost to Pennsylvania's economy. But Pennsylvania has a massive economy that must provide about 6 million jobs to its people to have low unemployment. Gas alone was never going to be enough to do that.
Gas alone most certainly is never going to be enough to compensate for terrible decisions about education, transportation, health care, alternative energy, and tax policy that destroy investment, kill jobs, and make Pennsylvania return to the bad old days when it always had unemployment rates higher than the national average.
I remember WSJ article from last year that put total marcellus shale-related employment in PA at less than 20 thousand in 2010. So if 6 million jobs are needed for full employment in PA, then natural gas in PA is only providing 0.3% of the jobs we need - in other words, if nat. gas has meaningful value to PA it is in terms of income flowing into the state, not in terms of direct jobs created.
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