(The Center Square) – Though pandemic restrictions have faded away, Pennsylvania’s economy is yet to bounce back. The commonwealth has lost 120,000 workers since 2019, according to a new report from the Independent Fiscal Office, and its 4.6% unemployment rate is higher than the national rate of 3.6%.
The report, “Where Did the Workers Go?”, shows that “many workers left the labor force and no longer work or actively seek employment.” Even though the labor market is strong, with many job openings and employers offering higher wages, Pennsylvania has fewer people ready to work a job than before the pandemic.
The commonwealth has an “unmet demand of roughly 100,000 additional workers,” the IFO report noted. And the problem isn’t only in Pennsylvania; the national trend reflects a labor force that’s smaller than it was a few years ago.
The state lost 139,000 payroll jobs between May 2019 and May 2022, and the biggest losses came from two sectors: nursing home and residential care, and full-service restaurants. Together, they made up 40% of the losses, more than 56,000 jobs. Payroll jobs do not include the self-employed.
Nonprofit groups lost 14,000 jobs, manufacturing businesses lost 13,000 jobs, and employment services lost 12,000 jobs.
Only two sectors had notable increases in employment: warehouse and storage businesses gained 34,000 jobs, and couriers-messengers grew by 12,000.
Pennsylvania’s shrinking labor force, the IFO noted, was tied to its disappearing and aging population, parents leaving jobs to care for children in online or home schools, and other factors.
“From 2019 to 2022, the state population contracted by an estimated 48,000 residents and the median age increased,” the report noted.
The number of “prime working age Pennsylvanians,” those who are age 25-54, fell by 50,000. Residents age 55-64, who may work or choose an early retirement, fell by 78,000. But those aged 65 and up grew by 164,000 people.
Pennsylvania isn’t attracting younger workers – as its current population ages out of the workforce.
The need for child care has also presented a tradeoff. When school districts switched from in-person to online classes, parents left.
Since the pandemic, public schools lost almost 51,000 students, the IFO noted. Schools that stayed open or returned sooner to physical classes, such as in-person charter schools and non-public schools, each lost fewer than 3,000 students.
Meanwhile, the biggest enrollment gains went to online charter schools (almost 20,000 students) and homeschooling (16,000 students).
With the shrinking labor force, the commonwealth’s problems have ripple effects. Fewer workers can make economic growth a pressing concern, as does a potential drop in tax revenues that fund government services.
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