New Castle News

Closer Look

October 14, 2013

Job creation still lacking in Pennsylvania

HARRISBURG — Pennsylvania ranked 43rd in job creation in the 12 months ending in August, according to researchers at Arizona State University.

A spokesman for the governor’s re-election campaign insists the numbers are misleading.

“From the day Tom Corbett was sworn in as governor, Pennsylvania has added more than 130,000 private sector jobs, and Pennsylvania’s job growth during his term has been above the historical average,” Corbett’s campaign manager Mike Barley said.

However, an analysis by the labor-funded think tank, the Keystone Research Center, found that the pace of economic recovery has slowed dramatically the longer Corbett has been in office. They blame the impact of heavy cuts in funding for schools.

The governor has embraced an ideologic strategy of downsizing government while trying to encourage private sector job growth.

The Keystone Research Center, using federal Bureau of Labor data, estimated the gas drilling industry added 9,900 jobs in Pennsylvania from 2010 to 2012. At the same time, the state shed 45,000 public sector jobs. Most of these were teaching jobs cut by cash-strapped school districts.

Some1,000 jobs were lost in Pennsylvania’s 10th Congressional District in the northcentral and northeastern even though the area includes some of the state’s most intense drilling activity, said Mark Price, a labor economist with the Keystone Research Center.

The Marcellus Shale Coalition, the state’s leading gas industry trade group, estimates 96 percent of the companies it represents are based in Pennsylvania. Those companies employ 13,099 in the Marcellus and Utica shale regions. But industry estimates show in the past year, only 57 percent of new hires were Pennsylvanians. Some trained Pennsylvania workers were told if they want to keep working they have to go where the drilling is, said Price.

Low gas prices reduced the number of wells operating in Pennsylvania to 50, about one half of what it had been, over the past year.

On Thursday, the Marcellus Shale Coalition put out a statement arguing that severance tax proposals by a number of Democratic candidates for governor would further slow drilling activity. Rather than adopt a severance tax, the Pennsylvania Republican-controlled legislature put in place an impact fee.

State Rep. Jaret Gibbons, D-Lawrence County, said it has not been clear if the Corbett administration’s strategy of cutting corporate taxes is paying off by encouraging companies to hire. Gibbons is a Democrat whose district includes part of Lawrence County, one of 14 Pennsylvania counties that have fewer jobs than when Corbett took office. The others are: Bedford, Blair, Cambria, Cameron, Clarion, Crawford, Huntingdon, Juniata, Mifflin, Somerset, Venango, Warren and Wayne counties.



Gibbons said he’d like to see the state invest in more job-training and education funding.

Two of the biggest policy issues facing state lawmakers this fall also have dramatic jobs implications, Gibbons said.

Proponents project the type of spending included in a Senate proposal, up to $2.5 billion a year, would create 75,000 jobs. Proponents of Medicaid expansion have argued that adding 500,000 people to the insurance rolls would translate into 35,000 health care jobs.

Gov. Tom Corbett has eschewed Medicaid expansion.

Instead, Corbett has asked the federal government for permission to funnel those 500,000 working poor Pennsylvanians into private insurance offered through health exchanges created by the Affordable Care Act.

Those in the health insurance industry believe Corbett’s strategy promises more jobs than a boilerplate bid to add people to Medicaid.

First, the governor wants to force people to look for work to get the new government assistance with insurance. Second, insurance companies and brokers could add jobs to deal with the influx of 500,000 more customers, said Vince Phillips, a spokesman for the Pennsylvania Association of Health Underwriters.

“It’s a bold plan,” Phillips said.

Already, 20 insurance brokers registered with the federal government in order to help Pennsylvania consumers select insurance through government exchanges. Only 10 of the registered brokers are based in Pennsylvania, government records show.


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