Issue Summary (Updated January 2010)

Pittsburgh Employment Situation

The Issue:

Job losses continue to plague the Pittsburgh region as it has been caught in the recession gripping the nation since late 2008.  However, prior to the recession the area experienced lackluster job growth and had made little progress in addressing the fundamental issues that encourage job creation.   

What We Know:

According to U.S. Department of Labor statistics in 2009, the seven county Pittsburgh metro area has fewer private sector jobs now than a decade ago.  Since the recession began, the area lost on average about 26,000 jobs from the same month one year prior.  Even during the year or so before the recession began when the region finally started to post job gains, the average job growth was tepid at about one percent per year. 

Job strength in the Pittsburgh region has been concentrated in the education and health category and the professional and business services sector. Together these two sectors have added more than 50,000 workers since 2000, accounting for virtually all net new jobs but still not enough to offset losses in manufacturing and retail trade as well as near stagnation in other sectors. During the 2009, nearly all sectors experienced losses to employment-even professional and business services sector showed decline.  The only subsector to post gains during the recession was education and health services.  This sector was driven largely by the social assistance subsector-an actual indicator of a weakness in the economy. 

While the Pittsburgh region has fared better than the nation as a whole in terms of its employment losses, the underlying reason is the area's lack of robust growth prior to the recession.  Still, the perception of not having boomed so the bust was minimized is somewhat misleading.  The total number of private sector jobs in the Pittsburgh region has retreated to 1998 levels.  The national slide, despite being protracted and deep, carried jobs back only to 2003 levels.   Moreover, many parts of the country, especially in the mountain west and south, that had recorded rapid jobs growth for most of the decade had employment levels that fell back only to 2005 levels.  Thus Pittsburgh's employment situation remains weak when compared to the nation or metro areas in the mountain west and south.

Economically, the Pittsburgh region has the misfortune of being located in a state that is a relatively poor performer and whose business and labor climate, especially its public sector unions is not as friendly as it ought to be toward private enterprise. Pittsburgh does have several strong economic attributes with top quality medical facilities and enviable institutions of higher education. Unfortunately, while they help sustain the region's economy these sources of strength are not sufficient to spur the private sector dynamism necessary to produce healthy, long term job gains-the key to real economic well being and vitality.

Recommendations:

Sadly, there is little the Pittsburgh region can do by itself directly to fix the state's business and labor climate.  However, political, civic and business leaders need to demand actions in Harrisburg that will begin the process of loosening the stranglehold unions, particularly public sector unions, have over government spending, taxes, and regulations of the workplace. Then too, there needs to be strong support for lowering taxes, especially onerous property taxes and business taxes that are detrimental to state and regional growth. And there is much local leaders can do to rein in costly government and onerous taxes. There needs to be leadership that will stand up to unreasonable union demands and work for the benefit of citizens and taxpayers.