April 19, 2021, Harrisburg, Pa. — Key economic indicators show that Pennsylvania is falling behind in its effort to recover from the COVID-19 pandemic. While our unemployment rate remains unacceptably high and stagnant compared to the declining national average, job posting trends also indicate that the sharp decrease in labor force participation caused by last year’s shutdowns will induce a labor shortage once employment levels do recover.
Commonwealth Foundation Director of Policy Elizabeth Stelle outlined seven key economic recovery metrics in a new fact sheet. They include data showing Pennsylvania to have:
- A 16.1% decline in personal income from Q3-Q4 of last year—the worst nationwide—according to the BEA. This likely reflects massive Q2 job loss due to prolonged shutdowns.
- The 2nd most business closures in 2020, giving the state a large hill to climb to recovery.
- A 28% rate of small businesses still closed, showing that swaths of the state’s employers have yet to climb that hill.
- The 6th slowest overall economic recovery, according to a CNN/Moody’s analysis.
- The highest black unemployment rate in the second half of last year.
- A sharp decrease in the labor force participation rate, with nearly 200,000 working-age Pennsylvanians no longer seeking work.
- An unemployment rate that has ceased to decline while the rest of the country is getting back to work.
“Despite overall economic sentiment looking up and vaccination rates finally rising, Pennsylvania has been put in a very difficult position coming out of 2020,” said Stelle. “Because the vast majority of state economic policy has been coming solely out of the governor’s office, we experienced a long and strict shutdown combined with a myopic focus on government grants to suffering businesses. Broader policies, formulated with input from multiple stakeholders, aimed at expanding growth, helping small business owners recover quickly, and inducing folks to safely rejoin the labor force have been delayed, vetoed, or outright neglected.”
Some legislation aimed at helping local businesses confidently rebuild have started moving in the General Assembly. Notably, House Bill 605, which would extend COVID-19 liability protection, just passed in the House. But temporary pain relievers like business grants continue to be prioritized.
“A key factor compounding this reality has been the ability of the governor to perpetuate his own emergency powers, leaving lives and livelihoods at the mercy of one man,” continued Stelle. “Early on in the response to COVID-19, he vetoed 19 bills that would have put local businesses and workers in a better position to recover. Now, more than a year into the COVID-19 response that he fought so hard to personally dominate, we are seeing the results of his bureaucracy-minded approach. Thankfully, voters will be able to change how emergency declarations work with the constitutional amendment on this May’s primary ballot.”
Commonwealth Foundation experts are available for comment. Please contact Michael Torres 850-619-2737 or [email protected] to schedule an interview.
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