Recession Retains its Grip on Pittsburgh

While many economists and politicians are claiming the recession that has been gripping the nation is starting to lessen, its hold on the Pittsburgh area remains firm. The latest jobs numbers for July 2009 bear this out. When comparing the year-over-year jobs totals for July 2008 and July 2009, the region lost 30,800 total private jobs, slightly better than the June-over-June totals of -30,900. The Pittsburgh region’s loss to total private jobs (-3 percent) for July are much better than the national average (-5 percent), but as we’ve pointed out countless times before, the region never "boomed", so it really couldn’t "bust".

Nearly all major sectors experienced year-over-year job losses-the lone exception being, once again, education and health services. But even there, the job gains were not as pronounced as they had been. The sector’s July year-over-year gains were only 2,800 jobs whereas the year-over-year gains for May (3,200), June (3,400) were slightly higher. As we pointed out in a previous Policy Brief (Vol. 9, No. 41), growth to this sector, particularly the social assistance sub-sector which counts for most of the growth, is actually as sign of weakness as these jobs are often low-paying and rely on public dollars for their existence.

The manufacturing sector continues to be the hardest hit sector as it lost 10,800 jobs or nearly 11 percent of its employment count. Construction jobs also continue to post losses (-3,400) as did the retail sector (-3,300), the professional and business services sector (-5,500) and the leisure and hospitality sector (-5,000). This latest employment report did not have much to cheer about for many of the sectors of Pittsburgh’s economy.

The recession’s grip on Pittsburgh will not begin to abate until it also loosens on the country as a whole. However, steps can be taken to expedite, rather than prolong, the process. Efforts to raise taxes at the state and local levels must be resisted. The Governor’s plan to increase taxes, either the sales or income tax, will have a markedly negative effect on the local economy. Instead, state and local officials need to cut onerous government spending as well as taxes. They also need to tackle burdensome regulations, such as mandated wages, that are stifling business growth. Only when these measures are enacted will the Pittsburgh economy reverse the trend of job losses and possibly experience an economic boom.