Pennsylvania’s job growth over this period, however, lagged that of most of its neighboring states, exceeding only Ohio and West Virginia, said co-author Theodore Alter, professor of agricultural, environmental, and regional economics and the center’s co-director.
“Causation was beyond the scope of this report, but we hope the comparison to other states raises questions among policymakers seeking to improve employment opportunities,” Alter said. “Why is Pennsylvania at the lower end of the comparisons? What’s different about economic policy? What’s different about the industry composition as compared to those other states?”
Job growth was uneven within the state, the report suggests. Between 2001 and 2008, most counties remained relatively steady, with gains or losses below 5%, while most of the eastern and southeastern counties had strong net positive job growth. During the period following the Great Recession, southeastern counties and some counties in the Philadelphia and Pittsburgh metropolitan areas saw mild recoveries in employment, but many western and northern counties experienced greater job losses between 2008 and 2019 than they did between 2001 and 2008.
Generally speaking, between 2001 and 2019, counties in southeastern Pennsylvania experienced positive employment growth, while many counties in the northern and western areas of the state experienced employment decline. Consistent with that trend, 24 counties, mostly in the southeast, experienced employment growth during both business cycles, and 21 counties, primarily in western and northern Pennsylvania, lost jobs during both time periods studied.
The researchers looked at industry sectors as defined by the North American Industry Classification System, the standard system used by federal statistical agencies. The sector with by far the most robust employment growth in the state during the entire period examined — and during each of the two shorter business cycles — was Health Care and Social Assistance, which added more than 317,000 jobs between 2001 and 2019. This includes positions with hospitals, nursing homes, child care providers, family services and other health care providers.
Other industry sectors showing job growth during the two decades were Accommodation and Food Services, which gained about 95,300 jobs; Management of Companies and Enterprises, and Professional and Technical Services, which each added more than 80,000 positions; and Transportation and Warehousing, with a gain of 68,000 jobs.
The industries with the most job losses from 2001 to 2019 were the Manufacturing and Retail Trade sectors, with workforce reductions of more than 248,000 and 63,000, respectively. The dramatic loss of manufacturing jobs follows a nationwide downward trend in manufacturing employment blamed, in part, on automation and international competition, the report points out.
The report illustrates the complexity of understanding Pennsylvania’s economy and labor market, the researchers said.
“There’s an aggregate story, but that can be misleading,” Alter explained. “The state’s economy is diverse, both in terms of geography and industry sector. As the relative importance of industry sectors changes, people are displaced and areas are disadvantaged. One of the challenges going forward is how policymakers deal with this structural adjustment to the economy.”
Baker added that each county has a unique composition of jobs that are impacted differently by economic forces, making it difficult for officials to make sweeping decisions for the state.
“Pennsylvania’s labor force was really impacted in numerous ways across these last couple of decades, and I think the most important takeaway is the state’s resiliency,” she said. “We hope this report provides a resource to better understand these changes, while helping to establish a baseline for future analyses of the workforce disruptions caused by COVID-19.”
Co-authors of the report also included Theodore Fuller, development economist, and Nolan Martino, undergraduate research associate, Center for Economic and Community Development, Penn State.
The U.S. Department of Agriculture’s National Institute of Food and Agriculture supported this work.