Pa’s Job Growth Advantage Over Other States Slipping Away as State Budget Cuts Yield Pink Slips

Date of Press Release: 
July 19, 2012

Read the Policy Brief

Read a Blog Post

Download a PDF Version of the Press Release

HARRISBURG, PA (July 19, 2012) – Pennsylvania’s strong job growth coming out of the recession has slipped away in large part because of state budget cuts to education and other services, according to a new analysis by the Keystone Research Center.

In 2010, Pennsylvania ranked 12th out of the 50 states in job growth by percentage, but the state’s ranking has dropped to 36th over the past year (May 2011-May 2012) and 39th over the past six months (December 2011-May 2012), just as state budget cuts have begun to take a toll on the economy.

Keystone released its new policy brief, Falling Behind on Jobs, in advance of the June state jobs report expected to be released by the commonwealth today.

“State cuts, especially in education, have stalled Pennsylvania’s job growth coming out of the recession, and now Pennsylvania is lagging behind many other states,” said Mark Price, Keystone Labor Economist and co-author of the policy brief. 

In 2011, as the state cut more than $1 billion for education, 14,000 jobs in public schools and universities were lost, according to data from the U.S. Bureau of Labor Statistics. Altogether the commonwealth shed 22,700 teachers, first responders, and other public servants between December 2010 and December 2011.

Already this year (through May), Pennsylvania has lost 5,400 more public-sector jobs, and with a new state budget that remains below budgeted spending levels of four years ago, more losses are likely on the way.

Significant public-sector job losses have a particularly big impact on Pennsylvania’s economy because our state and local government workforce is already the second leanest out of the 50 states as a share of total employment. Compared to our neighboring states, Pennsylvania has also lost a much larger percentage of its public workforce between May 2011 and May 2012, the Keystone analysis finds.

Neighboring New Jersey presents a contrasting picture. Public-sector job growth has fueled New Jersey’s resurgence over the past year, lifting its job growth percentage ranking from 49th in 2010 to 13th between May 2011 and May 2012.

Pennsylvania has had two years of budget surpluses but still made cuts to public schools and universities, health care and cost-effective local services. The Keystone policy brief recommends that Pennsylvania policymakers reverse course and use more of the current surplus to maintain investments that build a stronger economy.

It also recommends the state invest in infrastructure and school construction at a time when borrowing costs are low because of the depressed construction market.

“Investments in education, infrastructure, and a strong economy keep workers on the job and help make Pennsylvania a place where businesses will want to locate and families will want to live,” said Stephen Herzenberg, Keystone’s executive director and an economist who co-authored the policy brief. “It’s time to shift back into drive and move Pennsylvania once again into the lead on the job growth.”

Read the Policy Brief

The Keystone Research Center is a nonprofit, nonpartisan research organization that promotes a more prosperous and equitable Pennsylvania economy.