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Pittsburghs economic doldrums persist despite low unemployment

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(The Center Square ) — Pennsylvania has struggled to reverse population losses in much of the state – this despite its low unemployment rate.

Labor-force participation rates have dropped, and the overall effect has been for “employment doldrums” to set in, as one policy group argues.

For Pittsburgh, the news is more dire.

“Job gains in the state, region and city are weak, especially over the last four years,” Jake Haulk, president-emeritus of the Allegheny Institute for Public Policy, wrote in a recent policy brief.

He called the Pittsburgh metro area’s economic performance “very poor” over the last decade and “even worse” in the last four years.

“Unfortunately, the private sector has not recovered to the 2019 employment level and in 2023 remained 27,000, or 2.5%, below the 2019 count, the highest level posted since 1990,” Haulk wrote.

Though employment hasn’t recovered, workers in Pittsburgh are doing better than most. The Pittsburgh region’s unemployment rate dropped further to 3.2% in February, according to the Department of Labor & Industry, lower than the 3.4% statewide rate and the 3.9% national rate.

Of the 11 “supersectors” tracked by the department, education, health services, and government added 6,200 jobs, while trade, transportation, and utility jobs had a seasonal decline of 1,400 jobs. Over the year, six of the 11 sectors had job gains, though professional and business services were down 3,300 jobs (1.8%).

“The long term and recent weakness in Pennsylvania and Pittsburgh MSA job gains (relative to other states and absolute) pose serious issues for policy makers,” Haulk wrote. “Failure of workers to return to downtown offices post-pandemic, massive shortfall of ridership at Pittsburgh Regional Transit, and the inability of the Pittsburgh International Airport to recover to pre-pandemic passenger levels are all serious problems.”

Pennsylvania’s labor-force participation rate has been a concern as its working population retires. State agencies have warned that a “silver tsunami” could push up the cost of government services faster than tax revenues grow. As the population ages nationally, older workers have started to retire. Younger workers dropping out of the labor force isn’t driving the changes, though youth out-migration from Pennsylvania is an issue.

Nor does there seem to be an easy fix.

“There’s probably not a behavioral reversal that could bring people back in and boost labor supply,” Jed Kolko, former under secretary of economic affairs for the U.S. Commerce Department, said on X (formerly known as Twitter).