As we have written in previous Policy Briefs, the Pittsburgh metropolitan statistical area (MSA) experienced strong employment growth in 2011 (as measured by the establishment survey), especially in the final quarter. While the data for the first part of 2012 showed a slowdown, the MSA still showed positive growth. The question arises, how did the counties that make up the MSA fare during the last couple of years?
When the Pennsylvania Department of Labor and Industry (L&I) issued the January workforce information release for the Pittsburgh metropolitan statistical area (MSA), the household employment data indicated a slowdown in the local economy compared to the brisk pace of 2011, especially the strong growth posted in the fourth quarter. While this caused a minor stir in the media, of more importance was that January’s data reflected newly re-benchmarked household employment (persons reporting themselves as working) and labor force data for 2011. The updated benchmarks in the household survey data show a more robust labor market in the Pittsburgh MSA in 2011 than was originally reported last year.
The proponents of drilling for gas in the Marcellus Shale formation are quick to point out the economic benefits this new industry is bringing to the Pittsburgh region and the state as a whole. To gauge the economic impact of Marcellus Shale drilling, this Policy Brief examines employment, sales tax remittances, and reported taxable income in counties where drilling is taking place.
Notwithstanding the gnashing of teeth and doomsday prediction of diehard defenders of ever more spending on public schools, employment in the schools increased by 500 jobs in the Pittsburgh region from April 2010 to April 2011. While some reductions-or announced reductions are now in place-it is obvious that school districts have not been engaged in significant cutting.
The time of reckoning is at hand however as Federal stimulus funds have run out and state budget problems are likely to result in state spending cuts for education. As we have been warning for two years, the stimulus money was a trap. By allowing school districts to maintain spending levels rather forcing hard decisions, the state funding cuts will require much deeper reductions in staff and programs than would have otherwise been the case.
Our admonitions to have school boards ask teachers to take a pay freeze two years ago went unheeded, even derided. A pay freeze then would be worth several jobs now. But then greed by the unions and cowardice on the part of school boards is never a good combination for students or taxpayers.
The Bureau of Labor Statistics (BLS) has revised its labor force estimates for the period 2005 through 2010. This was done to reflect new Census Bureau population controls, updated input data, new statewide controls, and re-estimation. While these revisions occur regularly, this latest round of revisions produced fairly large changes in Pittsburgh area data for the number of unemployed, employed and labor force. These changes show the area’s unemployment rate to have been significantly lower than first reported during much of 2010.
School districts around the region and across the Commonwealth are grappling with the realities of the coming fiscal year and exploring methods of cost-savings and revenue enhancements. In recent weeks the possibilities of furloughs, pay freezes, tax increases, school closures, mergers, and student fees (either separately or in combination) have been mentioned.
Compounding the litany of financial difficulties confronting the City of Pittsburgh the latest jobless figures (July 2010) show a recession-high unemployment rate in the City’s labor force of 9.1 percent-a level not experienced in well over a decade. The unemployment rate has almost doubled since the July 2007 reading of 4.7 percent.
According to some analysts the recession is over. The Bureau of Economic Analysis has reported that real gross domestic product increased in both the third and fourth quarters of 2009, suggesting the long economic slide is coming to an end. While welcome news, many folks are still feeling the effects of the recession. For January, the national unemployment rate was a seasonally-adjusted 9.7 percent; Pennsylvania’s rate was lower at 8.8 percent and Pittsburgh region’s rate stood at 8.1 percent-up from 7.9 percent in December. The unemployment rates underscore just how the recession, while technically over, continues for large numbers of people (100,000 unemployed in the region as of January).
Early on in this recession that has been gripping the nation, Pittsburgh had gained national recognition as a city that is seemingly recession proof. The basis for this thought was that since the Pittsburgh region never "boomed", it couldn’t "bust". Well over the last three months, the recession has not only hit the Pittsburgh area, it has struck hard.
The latest employment figures from the Bureau of Labor Statistics show that from May 2008 to May 2009 the Pittsburgh Metropolitan Statistical Area (MSA) lost 33,300 total private jobs-the largest such year-over-year loss in at least two decades and the third straight month that claim can be made. In fact the number of May 2009 total private jobs in the area are at the lowest May level since 1998.
While it is impossible to say whether or not this represents the bottom of the recession and that things will start to improve, the area’s employers are not being helped by elected officials. With City Council and the Mayor discussing tax increases on hospitals and universities and the Governor wanting to halt the phase out of the capital stock and franchise tax and increasing the personal income tax, the future business climate looks ominous. The mentality of businesses being cash cows to be milked at the government’s pleasure will only harm any efforts to climb out of the recession.
Of course this is why the area never "boomed" in the first place.