Colin McNickle: Chilly Work Consolation within the Larger Pittsburgh Space

There is no doubt that the employment situation in the greater Pittsburgh area for 2020 was, in a word, disappointing, concludes the Allegheny Institute for Public Policy. Of course, the coronavirus pandemic justifies the lion’s share of the guilt.

But the Pittsburgh think tank analysis also puts a nagging fact into a blatant perspective. And too many policymakers may be tempted to use the pandemic as a broom to sweep under the rug the region’s generally poor and longstanding pre-pandemic employment performance.

“Today, it is more important than ever for heads of state and government to push for a friendlier business climate with lower taxes and regulations in order to support the recovery of companies and bring back much-needed job growth,” said Frank Gamrat, Institute Managing Director.

The employment graph for the Pittsburgh Metropolitan Statistical Area (MSA) shows the nationwide employment situation based on non-seasonally adjusted payroll data for employers from the US Bureau of Labor Statistics. The Pittsburgh MSA includes Allegheny, Armstrong, Beaver, Butler, Fayette, Washington, and Westmoreland counties.

Virtually every sector of the MSA economy saw job cuts in 2020.

“The pattern for most sectors … was a slight year-over-year gain in both January and February before the heavy year-over-year losses began in March when the government lockdown was introduced and restrictions continued later in the year were in 2020, ”remembers Gamrat.

However, the brightest statistic on the otherwise dying Pittsburgh MSA job picture for 2020 was compiled in what is known as the “Eds and Meds” sector – education and medicine. Indeed there were job losses, but less than in the other sectors.

“The total number of non-agricultural jobs for the MSA in Pittsburgh averaged 1.1 million per month in 2020,” he says. “This corresponds to a decrease of 88,000 or 7.35% compared to the monthly average for 2019 of 1.2 million.

“In addition, the 2020 figure is the lowest number of jobs since 1997. The previous low figure since 2000 was 1.1 million in 2009,” he recalls.

Now for this agonizing fact:

Non-farm employment growth for MSA has been very sluggish since 2000. Employment in the private sector grew at a meager average annual rate of only 0.3% over the 19 years from 2000 to 2019, and all of those increases were wiped out in 2020.

Yes, this timeline includes the years of the Great Recession. However, note the lack of economic growth before the recession and as the nation rebounded, regardless of robust growth at Eds and Meds.

Beware of policymakers blaming the coronavirus pandemic and selling the same old “solutions” that caused Greater Pittsburgh economic malaise for decades.

It’s worth noting that this economic calamity continued until 2021. In late February, the pandemic continued despite vaccinations being carried out.

And the restrictions on businesses – though they were a little lighter as of March 1, but still offer a cold comfort to them – will continue to weigh on the Greater Pittsburgh and state economies.

The news could get worse, however, as both the federal and Pennsylvania governments consider raising the minimum wage by 107%.

“As mentioned earlier, raising the minimum wage is a deaf-mute measure that will only exacerbate job losses in many sectors that employ low-skilled workers,” says Gamrat.

“It will deprive new workers of their first job or force some companies to close because they cannot accept the increased cost of doing business.”

Think of it as cold comfort, doubled over.

Colin McNickle is the Director of Communications and Marketing at the Allegheny Institute for Public Policy and can be reached via email.

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