Sunday, August 02, 2009

Parts of Our Region Are Suffering More Than Others

The national recession has taken a severe toll on our region over the past year. As of June, the 7-county Pittsburgh metropolitan area had lost over 31,000 jobs, 2.7% of our employment base, wiping out all of the net job gains the region had made over the previous decade.

There has been some comfort in the fact that as large as our job losses have been, they’ve been smaller than most parts of the country. Detroit has lost 175,000 jobs – more than triple the rate of job loss we’ve seen here. Cleveland has lost 63,000 jobs and Charlotte has lost 54,000, both more than twice as many in percentage terms as our region. As a result, the Pittsburgh Region’s 7.7% (unadjusted) unemployment rate in June was well below the national rate of 9.7%.

Some parts of our region, however, have been suffering much more than others. Between June 2008 and June 2009, the unemployment rate in Armstrong County jumped from 5.6% to 9.7%, the biggest increase in the region, and it’s the only county in the region with unemployment as high as the national rate. The second biggest increase was in Butler County, which went from having the lowest unemployment rate in the region in 2008 (4.6%) to 7.5% in June 2009. At the other end of the spectrum, Allegheny County now has the lowest unemployment rate in the region (7%).

Why is the recession affecting different parts of the region differently? A big reason is that some industries are being impacted more than others, and our counties have different mixes of industries.

For example, over the past year, the biggest loss of jobs in the region as a whole has been in manufacturing. There were 10% fewer manufacturing jobs here in June than a year ago, the 12th biggest drop in manufacturing jobs among the top 40 regions. The majority (60%) of the manufacturing jobs in the region are located outside of Allegheny County. At the end of 2008, manufacturing jobs represented nearly 17% of private sector jobs in Butler County, and between 12-14% of private sector jobs in Armstrong, Beaver, Lawrence, Washington, and Westmoreland Counties, whereas only 6% of the private sector jobs in Allegheny County were in manufacturing. That means the outer counties are being hurt more by the losses of manufacturing jobs than is Allegheny County.

Another industry that’s been hit hard in the past year in our region is leisure and hospitality. Here, the geographic pattern is the opposite of manufacturing. Over 60% of the Pittsburgh Region’s jobs in the leisure and hospitality industry are in Allegheny County, so job losses in this sector disproportionately affect Allegheny County.

The only industries in the region which have experienced significant job growth in the past year are higher education and health care. Allegheny County contains over 80% of the region’s higher education jobs and nearly two-thirds of the health care jobs, and the growth in these sectors has primarily occurred in Allegheny County.

Not everything is bad outside of Allegheny County. In Indiana County, the number of jobs was the same in June 2009 as in June 2008, the only county in our region that had no change in jobs in the midst of the recession. So why did its unemployment rate increase from 5.7% to 8% during the same period? Because the number of jobs is a net figure – Indiana County lost a total of 600 jobs in manufacturing, construction, and professional and other services, but it gained 600 jobs in trade, transportation, utilities, education, health services, leisure and hospitality, and government. Many of those who lost their jobs became unemployed, while some of the new jobs were likely filled by new residents of the county.

This complex mix of job growth and job loss across the region makes it imperative that the region’s five separate Workforce Investment Boards, four community colleges, and numerous job training and employment assistance programs work together on a regional basis to help unemployed individuals obtain new skills and find job opportunities as efficiently and successfully as possible, no matter where in the region they live.

(A version of this post was published as the Regional Insights column in the Sunday, August 2, 2009 Pittsburgh Post-Gazette.)


Post a Comment

<< Home