Pennsylvania’s economy is booming. Or is it?
A report released earlier this month by economists with Penn State’s College of Agricultural Sciences said yes — and no.
“It’s a tale of two Pennsylvanias,” said Ted Fuller, development economist in the Department of Agricultural Economics, Sociology and Education. “Your part of Pennsylvania is not doing too well.”
Fuller is co-author of the report, which was released by Penn State’s Center for Economic and Community Development and was titled “Pennsylvania: Bust to Boom? Great Recession to Recovery & Beyond.”
Economic growth is taking place around the larger cities in Pennsylvania, Fuller said, like Pittsburgh and Philadelphia. Smaller, rural areas are “in chronic decline in population and employment.”
There are pockets of prosperity in communities with dedicated employers, he acknowledged, like the Bradford area with Zippo Manufacturing Co. and American Refining Group, to name a few.
“If you’re lucky enough to have a company that has a demand for their product, you’re OK,” Fuller said. “It boils down to two Pennsylvanias, the really booming southeast and the central part not doing too bad, and the west outside of two or three counties around Pittsburgh, the rest of Pennsylvania is really in continuous decline, employment-wise.”
Fuller said, “What is happening all through the eastern half of the country, it is emptying out of the interior and everything is moving to big cities and to the coast. The big picture is not too encouraging for the interior in especially smaller centers in rural parts of the state.”
Statewide, the report found that the jobs that are on the rise are traditionally lower-wage occupations.
“The largest growth was in low-wage industries statewide and the greatest losses were in middle-wage jobs,” Fuller said. “The low-wage jobs include most of your jobs in healthcare, and that’s a booming industry as far as growth across the state.”
While things look bleak overall, McKean County’s Director of Economic Development Sherri Geary said that isn’t necessarily the case here.
“In McKean County, our companies tend to offer higher wages than reported. Employers recognize that the key to retaining key staff is to fairly compensate their workforce,” she said. “As a county, we are competing with the Southern Tier of New York for skilled employees.”
One way to do that is with higher wages, which in turn, help keep people in the region rather than looking for fatter paychecks in an urban area.
“The median hourly earnings for production occupations in the southern tier is $18.25 per hour. In McKean County it’s $20.24 per hour (total all occupations). Nationally its $16.31,” she explained.
“The average worker in the North Central Region earned annual wages of $40,479.00” in the first quarter of 2019, Geary said.
Another benefit to staying here rather than heading off for the city lights is the reasonable cost of living, which is 8.8% lower than the U.S. average. Geary said that “provides a distinct recruitment advantage for employers and additional disposable income for workers.”
She said there is hope for growth in the future, too.
“A major regional initiative began in 2017-18, with our strategic partners to work with business leaders who are being called to build a strong talent pipeline to create conditions for long-term competitiveness,” she said. “The agenda is driven entirely by business leaders — instead of being set by grant requirements or public programs.
“Business leaders are defining priorities based on the unique needs of their industry,” she continued. “This includes aligning training with industry needs but may also include infrastructure improvement, supply chain coordination or technology adoption.”
Geary said public partners play a role by bringing resources to business-led teams.
“The public partners are part of the team and include education, workforce development and designated economic development leaders who collaborate to support and respond to the industry’s needs,” she said. “Ongoing focus is on the weakened labor supply conditions as a result of population loss, an aging and shrinking labor force and lessened demand for workers over time.”
The Penn State report is available on the website for Penn State’s Center for Economic and Community Development.