Public-sector Job Losses Put Brakes on State’s Recovery
Pennsylvania is losing its post-recession job creation growth advantage over other states as public-sector job losses put the brakes on the Commonwealth’s economic recovery.
From September 2009 to September 2010, Pennsylvania outpaced most other states in job creation, ranking fourth in the number of jobs created and seventh by job growth percentage. Between April 2011 and September 2011, we shifted into reverse and are now headed in the wrong direction. A wave of public-sector job losses has driven job growth in the Commonwealth into the bottom 10: 47th measured by the change in the number of jobs and 43rd measured by job growth percentage.
Pennsylvania has lost 21,000 public-sector jobs over the last year, including some 13,000 in schools and education (Figure 1). Among the 50 states, Pennsylvania saw the sixth-largest decline in state and local jobs in the last year.
The U-turn in the state’s economic performance can be seen throughout the state. In all 16 metropolitan areas, public-sector employment is now below its peak; in all but four of these areas, the trend for the past several months has been downward. (Appendix A of this brief contains figures showing trends in public-sector employment in each metro area.)
In Pennsylvania, cuts in public-sector employment are shrinking a state and local government workforce that is already the second smallest among the 50 states compared to total employment. Pennsylvania would need to add 130,000 more state and local government jobs to reach 46th place measured by the share of public jobs in total employment.
These cuts are eroding essential services for children, seniors and people with disabilities, hurting local communities and hampering economic growth. Some cuts are also leading to lost federal matching dollars (e.g. funding for health care for low-income families), further hurting local economies.
Pennsylvania’s economic slowdown fueled by public job cuts has slashed the amount by which the state’s unemployment rate has trailed the national rate in recent years — the so-called “Pennsylvania Advantage.” Pennsylvania’s unemployment rate was 1.7 percentage points below the national rate in May, but by September the gap had dropped to 0.8 of a percentage point
It is time to abandon austerity economics for more effective policies that adequately fund essential services that working families rely upon and invest in the future. It’s time to shift back into drive and move Pennsylvania once again into the top 10 states for job growth.