Wednesday, March 6, 2013

The Marcellus Contributes To Falling Unemployment In Ohio and West Virginia But Not In Pennsylvania

The Marcellus gas reserve is the second biggest in the world and has been producing gas and jobs since 2007.  Unlike New York, where a moratorium is in place, Marcellus shale gas is flowing and jobs have been created in Ohio, West Virginia, and Pennsylvania.

Interestingly, the 2012 average annual unemployment rate in Ohio and West Virginia fell significantly but it did not fall at all in the third Marcellus state--Pennsylvania.  Here are the facts.

Ohio's average annual unemployment rate fell from 8.6% in 2011 to 7.2% in 2012.  West Virginia's fell from 7.8% in 2011 to 7.3% in 2012.  By contrast, Pennsylvania's unemployment rate did not fall at all, staying stuck at 7.9%.

The numbers show that Pennsylvania is the worst performing economy among the three Marcellus states and is among the 4 worst performing in the nation, since 46 states had a falling unemployment rate in 2012 and the national rate declined 0.8%.

By the way, both Ohio and West Virginia have gas drilling taxes, and Governor Kasich in Ohio seeks to raise the existing drilling tax as part of a tax reform package.  By contrast, Governor Corbett has refused to enact a drilling tax and begrudgingly accepted an inadequate impact fee.

No doubt gas production is creating wealth and jobs in all three states, but in Pennsylvania a series of budget, tax, and economic mistakes in the last 2 years have squandered and swamped the gas boom for the state as a whole.

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