The unemployment rate is an important indicator of economic health. Low unemployment gives workers leverage in the job market. They can shift to a new, higher paid job more readily, or they can bargain for a pay raise at a current employer who wants to retain experienced workers. Low unemployment also gives workers collective power: they can seek to organize a union secure in the knowledge that they’ll be able to land another job if need be. Measured by the unemployment rate, this blog shows that Pennsylvania’s job market has performed remarkably well in the last few years.
Going back nearly two decades, Pennsylvania’s unemployment rate jumped to 8.5% during the Great Recession spanning December 2007 to June 2009. Pennsylvania’s unemployment rate then slowly declined over the next decade as the economy expanded. By 2019, unemployment hovered around 4.2% for most of the year, ticking up to 4.7% in February 2020. Until the last three years, Pennsylvania’s lowest unemployment rate during the period starting January 1976 (when the current state unemployment data series begins) was recorded at 4.1% in February 2000.
In second month of the two-month pandemic recession from March to April 2020, Pennsylvania’s unemployment rate spiked to over 16%. Since then, the state unemployment rate has fallen rapidly and then steadily. By November 2021, the Pennsylvania unemployment rate matched the February 2020 pre-pandemic level of 4.7% (Figure 1). It has now been below the previous record low of 4.1% (in February 2000) for the last 26 months. Unemployment hit a new record low of 3.2% in June 2023 and has stayed at or below 3.5% for the last 18 months (from March 2023 to August 2024). Currently, the unemployment rate is below its pre-pandemic level in every single one of Pennsylvania’s 67 counties (as we will detail in a future release). For the last 16 months, Pennsylvania’s unemployment rate has also dropped below the national rate.
Figure 1
As EPI economist Elise Gould noted in June 2024, low overall unemployment rates are “…particularly important for historically disadvantaged groups like Black and Hispanic workers who always experience a tougher labor market.” For this reason, people of color have especially benefited from Pennsylvania’s persistent very low unemployment rate. Figure 2 shows that Black and Hispanic workers in Pennsylvania recently have had a lower unemployment rate than at any time in the past 22 years (the period covered by this data series). The racial unemployment gaps between white Pennsylvanians and people of color are also lower than at any time in those periods. Black unemployment in the second quarter of 2024 remained two percentage points higher than white unemployment, and Hispanic unemployment 2.7 percentage points higher.
Figure 2
Keystone Research Center released its annual report on the economy “State of Working Pennsylvania 2024” on August 27th. This is the fourth of a series of blogs focused on smaller, more digestible, pieces of our report. To access the full report, including full references for this specific blog, and other “State of Working Pennsylvania” resources, please visit our 2024 State of Working Pennsylvania Resource page here.