April Jobs Report Shows Improvement for Pennsylvania

State still has a jobs deficit of 220,000, Keystone Research Center reports. Fragile recovery points to importance of maintaining Pennsylvania unemployment benefits

May 19, 2011, 15:55 ET from Keystone Research Center

HARRISBURG, Pa., May 19, 2011 /PRNewswire/ -- Pennsylvania's unemployment rate dropped to 7.5% in April as the state's economy created nearly 24,000 new jobs.

The increase after last month's small job decline continued a trend that has seen the number of jobs in the state increase in nine of the last 14 months, with an overall increase of about 125,000 jobs since the recent job low point set in February 2010.

In April, the unemployment rate in Pennsylvania was one-and-a-half percentage points below the national rate of 9%.

Despite some improvement, there are still about 116,000 fewer jobs in Pennsylvania than in December 2007, the start of the recent recession. Taking into account population growth since then, Pennsylvania still has a jobs deficit of about 220,000. At the current pace of job growth, it would take more than three years to eliminate Pennsylvania's job deficit.

"The newest numbers make clear that Pennsylvania's most pressing deficit remains the jobs deficit," said economist Stephen Herzenberg of the Keystone Research Center. "The first priority of our elected representatives should be doing everything they can to strengthen job growth."

In light of the newest jobs report, Herzenberg said that Pennsylvania lawmakers would be ill advised to enact a Pennsylvania state House proposal to reduce unemployment benefits by more than $632 million annually.

House Bill 916, which could be considered by the House next week, would lower average weekly benefits from $324 to $277, according to the Pennsylvania Department of Labor and Industry. It would also deny benefits to some workers currently eligible and offset benefits by the full amount of any severance package from their employer. Overall benefits would fall by 20%.

"We established unemployment insurance to help pull our economy out of the Great Depression," said Herzenberg, "The last thing we want to do in the wake of the Great Recession is to enact the single largest cut in unemployment benefits in Pennsylvania history."

Herzenberg noted that Pennsylvania's strong unemployment benefits system is sustained through worker as well as employer contributions (in all but two  other states, only employers contribute) and is an insurance arrangement through which the risk of joblessness is shared across all employers and workers.

"To further restrict eligibility rules and reduce benefits in the most difficult economy in a quarter century is unfair to workers that have faithfully contributed to the unemployment fund," Herzenberg added, "and unfair to Pennsylvania local businesses that depend on unemployment insurance benefits which enable the victims of this economy to pay their bills."

"Pennsylvania still has four job seekers for each job opening," Herzenberg concluded. "When people are unemployed because there aren't enough jobs to go around, is it shared sacrifice to cut benefits by 20%?"

Even with benefits at current levels, unemployed workers bear a vastly disproportionate share of the cost of joblessness, as documented in a September 2010 report by the Pennsylvania Department of Labor and Industry (A Profile of Pennsylvania's Unemployed People, online at http://www.paworkforce.state.pa.us/portal/server.pt/community/pa_workforce_development/12865).

The Keystone Research Center is a nonprofit, nonpartisan research organization that promotes a more prosperous and equitable Pennsylvania economy. Learn more: www.keystoneresearch.org.

SOURCE Keystone Research Center