State labor secretary: Pennsylvania data reveal a buoyant economy
State Labor Secretary Julia Hearthway said on Thursday that Pennsylvania lost fewer jobs than competing states during the recession and has gained more since then, making a case that the state's economy is strong and improving.
She said monthly job creation and jobless rate figures often paint an incomplete picture, but a truer one comes from figures that show people working or looking for work in Pennsylvania have increased since the recession, while national figures show a decline.
“Our labor force is growing, and that's an indication of prosperity,” said Hearthway, who was in Pittsburgh to talk to the media about how she's selling the state to companies that are looking to expand or move here.
She said Pennsylvania has recovered about 70 percent of jobs lost during the recession, citing Bureau of Labor Statistics numbers that show Ohio has recovered only 39 percent; New Jersey, 50 percent; and Michigan, 56 percent.
Economic reports, however, show a mixed picture for Pennsylvania.
In August, the state's unemployment rate rose to 7.7 percent, the first increase since January, despite a gain of 11,300 payroll jobs that signaled employers are continuing to hire.
“There's some validity to what she's saying,” said Jake Haulk, an economist and president of the Allegheny Institute for Public Policy in Castle Shannon. But the state's performance has slowed since it established a strong pace coming out of the recession, he said.
“What they should consider is that total private jobs rose by 82,600 from July 2010 to July 2011; 57,200 over the next 12 months, and only 36,800 from July 2012 to July. It is noteworthy that private total jobs remain 30,000 below the peak levels reached in 2008,” Haulk said.
“That's not the direction you want to go. The state isn't doing terribly, but there isn't much to sell when the (jobless) rate goes up in August,” he said. Even so, “Pennsylvania has done a little bit better than other states.”
That's because the state wasn't hit as hard as the rest of the nation in housing and construction, and it benefited from the boom in Marcellus shale activity, Haulk said. The state's performance is now more closely tied to trends nationwide.
PNC Bank said in a report that small- and midsized business owners in Pennsylvania remain guarded in their economic outlook, with nearly nine of 10 holding off hiring because of uncertain sales. Owners continue to report weak sales as their top challenge, followed by government regulation and taxes. They expect softer market conditions and higher non-labor and health care costs, and three in 10 plan to raise selling prices, PNC said.
Hearthway said the state benefits because of its diverse economy, and two sectors — education and health services — which together represent 20.7 percent of the states payroll jobs, helped buffer the effects of the recession.
One of the biggest roadblocks to growth, Hearthway said, is the problems faced by small businesses. To help them and larger businesses, state government has been working to reduce corporate taxes and credits that allow companies to deduct past losses from current profits. “It's a true balancing act,” because tax cuts have to be balanced with slowly rising government revenue, she said.
One action taken to help businesses is the establishment of a state website — www.jobgateway.pa.gov — to help jobseekers find positions that fit their skills, experience and location, Hearthway said. “We've made this site available and understandable, with more than 200,000 job postings,” she said.
Jobseekers can enter what kind of job they are looking for and where, and get a detailed list they can use, she said. “The more we can get this kind of information out there, the better off we will be as a state.”
John D. Oravecz is a staff writer for Trib Total Media.