ITES: Profiling Pennsylvania’s Economy

Philadelphia Skyline

It’s known as the Keystone, Quaker, Coal, Oil, and perhaps someday soon the Gas State (more on that later). But to its close to 13 million inhabitants who embrace its motto of “Virtue, Liberty, and Independence,” it is simply Pennsylvania. As promised in the entry from last week, this post will elaborate on the key economic data, demographics, and political trends in this Northeastern Commonwealth.

It may seem absurd to consider Pennsylvania a swing state, when its electors have voted for the Democratic candidate in the last five presidential elections – swinging for Barack Obama by more than 10% in 2008. But such myopia ignores the far closer contests in 2004 and 2000, at 2.5 and 4.2%, respectively, as well as the resounding Republican surge in 2010. That year, Republicans added a U.S. Senator, five Congressional Representatives, flipped the State House of Representatives, and retained control of the State Senate and Governor’s mansion.

Still, by party registration the Commonwealth favors Democrats. A significant plurality totaling 46% of current, registered voters side with the Donkeys in contrast to the 37% who ride with the Elephants. The remaining 12% are either independent or favor a third party.[1] But no matter who voters choose to support, there will be one fewer elector this year. Slow population growth over the last decade ensured that the state would lose a Representative following the 2010 Census, and so it will decline to 20 electoral votes for at least the next 10 years. Of course it will be helpful to know a little more about those voters.

At 12.7 million inhabitants – many claiming German, Irish, and Italian ancestry, Pennsylvania is the 6^th most populous state in the country. Achieving that rank is common in the state, as its $570 billion annual Gross State Product (GSP) – GDP for a state or province, is itself 6^th-highest in the nation. But that impressive ranking plummets with regard to its $39.8 thousand GSP per capita (dividing annual GSP by its residents). With that measure, the state is 29^th in the country and below the national average.

Despite that low ranking, it boasts a labor force of more than six million employees and job seekers. Fortunately, there are fewer job seekers today than in past months, and the state’s unemployment rate of 7.6% is below the national average of 8.5%. Unfortunately, that number does not reflect the more than 100 thousand individuals who were once included in the total labor force at its peak in November 2008.[2] This discrepancy often occurs when an unemployed individual stops looking for a job, such that he or she neither counts as part of the total labor force nor toward the unemployment rate.

Still, residents are just about as educated as the rest of the United States. Just fewer than 87% of adults have graduated from high school – higher than the national average of 84.6%, and more than 26% of adults have at least a Bachelor’s degree – close to the national average of 27.5%. Education is a key theme in Pennsylvania, as the Education and Health Services sector represents the largest share of the workforce at 20%.

The next four largest (non-farm) sectors are Trade, Transportation, and Utilities at 19%; Government (both state and federal) at 13%; and Manufacturing at 10%. Its five-largest employers include many of those sectors – the Federal Government, the State Government, Wal-Mart Associates, Inc; the City of Philadelphia, and the University of Pittsburgh.[3] The absence of Mining and Logging from a list of the largest sectors may be somewhat surprising given the state’s Oil and Coal nicknames. But its 1% share of the labor market is the smallest of all industries.

With regard to mining, a key economic issue confronting Pennsylvania is the development of the Marcellus shale formation. Stretching from New York across Western Pennsylvania and into Ohio, Maryland, West Virginia, and Virginia; the rock formation surrounds a considerable natural gas reserve now accessible due to the development of hydraulic fracturing – click here for a 6-minute video illustrating the process. Touted as a means to secure affordable natural gas and to ease our reliance on foreign sources of energy, the extraction of process is controversial. It requires significant water resources, which are later mixed with various lubricants that if not properly deployed could contaminate local water supplies. With energy not soon to disappear as an issue, expect to read more about this gas reserve in future posts.

That mining controversy along with other major Pennsylvanian economic news will be sourced from the state’s three largest newspapers – from its two largest cities, to inspire forthcoming entries. Those three papers are The Philadelphia Inquirer, which has an average weekday circulation of more than 330 thousand readers; the Pittsburgh Tribune-Review, which has more than 187 thousand readers; and the Pittsburgh Post-Gazette, which has more than 173 thousand readers.[4] Beyond circulation, the two Pittsburgh papers were selected for their ideological differences: the Tribune’s editorial staff is noted for its conservatism, while the Post-Gazette’s is its liberal counterpart. But before this blog can delve into their articles, the remaining swing states will need to be introduced.

Next up: Florida.

STATE CLIPS:

Pennsylvania: “Senate Democrats Push to Restore Money for Schools, Social Programs” Pittsburgh Tribune-Review January 25th

Outnumbered in both houses of the Pennsylvania General Assembly, and commanding only 40% of the Senate, Democrats may be out of luck in their attempt to dictate the budget discussion. A higher tax on Marcellus shale drilling is discussed as a means to maintain various social programs.

Florida Preview: “State Private Prison Plan Facing Fire from Several Fronts” Tampa Bay Times January 25th

The Republican-controlled State Senate is looking to approve a plan to privatize all but one South Florida prisons. Opponents of the measure claim that it will lead to fewer jobs for those who staff the prison, as private operators would need to cut costs by at least 7%. Such a tradeoff between jobs and budget savings is likely to span numerous policy decisions as states – and the federal government, pursue austerity.