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Allegheny Institute


ALCo Employment Exhibits No Net Growth

by Policy Brief
 

Allegheny County Employment Exhibits No Net Growth Between 1990 and 2015

(November 21, 2016)--Summary: The 25 year period from 1990 to 2015 saw overall anemic employment growth for Allegheny County residents. Household employment and the labor force were essentially unchanged. Statewide the growth was healthier, but neither kept pace with the national growth over this period.

In a recent Policy Brief (Volume 16, Number 42) we looked at the City of Pittsburgh's employment picture over the last 25 years (1990-2015) and noted that the high water mark for City residents, in terms of jobs and the labor force, occurred in the early 1990s. Data from the U.S. Bureau of Labor Statistics allows us to analyze the performance of Allegheny County over the same period. This Policy Brief examines County labor market statistics and compares its performance with those of the state and nation over the same period.

In 1990, the household survey –that ascertains the number of residents reporting they are working–placed the annual average of monthly employment for Allegheny County at just shy of 616,700. Amazingly, in 2015 employment stood at just over 616,600–virtually unchanged from 25 years earlier.

However, employment was not flat over the entire period. Over the decade of the 1990s, employment managed to post very modest gains, climbing to 632,700 in 1999, the highest level reached in the 1990 to 2015 period. Clearly, this slender rise of 16,000 people working (2.6 percent) is not much growth for a nine year period.

Not surprisingly, the employment low point occurred during the recession of 2008-2010 when those claiming to be employed fell to 587,858 in 2010–a drop of seven percent from the high of 1999. In the five years since the recession ended, employment has rebounded and by 2015 reached 616,600. In short, the number of Allegheny County residents working was essentially flat for the 1990 to 2015 period not withstanding a period of slow growth in the 1990s and a recovery from the 2008-2010 recession. Not much to brag about.

Compared to the state's annual average of monthly employment over the 25 years, the County looks quite anemic. In 1990, 5.51 million residents were employed across the Commonwealth. By 2015 that number increased to 6.09 million–an increase of over half a million or 10.6 percent over 25 years. Not great, but certainly a far cry from the no growth in employment in Allegheny County.

Meanwhile nationally, employment as measured by the household survey has grown considerably faster than the state and county since 1990. In 1990, 118.79 million people were employed. By 2015 that number ballooned to 148.83 million–an increase of 30 million or 25 percent.

Over long periods, changes in the household employment numbers are closely related to labor force size–the number of people working plus the number looking for work. The BLS provides labor force data as well. For Allegheny County change in the labor force over the last 25 years has been negligible. In 1990 the average monthly labor force level was 644,783. By 2015 it edged upward to 647,804, a very meager 3,000 gain–less than one-half percent. The high point for the labor force occurred in 1993 (663,330) while the low point came in 2006 (627,923).

During this same time frame the average monthly labor force total in the Commonwealth rose from 5.83 million in 1990 (the period's low reading) to 6.42 million in 2015, a rise of 10.2 percent–a gain quite close to the employment count increase. The largest figure during this period occurred in 2012 (6.46 million). Meanwhile nationally, labor force growth was nearly 25 percent, rising from 125.8 million to 157.1 million. Thus, by comparison Allegheny County lagged both the state and national growth by a large margin.

Of course another measure that must be taken into account is population change over the 25 years. In 1990, Allegheny County population stood at 1.34 million residents and the estimate for 2015 put it at 1.23 million–a decrease of 110,000 residents or nearly eight percent. By comparison, the Commonwealth's population rose from 11.88 million to 12.8 million, just under a million and nearly an eight percent increase. Meantime, the national population grew from 248.7 million to 321.4 million, a jump of 72 million or 29 percent.

To be sure, population counts are a primary factor in determining the size of the labor force and by extension the number of residents employed.

Looking at a ratio of the number in the labor force to the population provides a good analytical approach and in this case interesting results. In 1990, with a population of 1.34 million and a labor force reported at 644,783, the ratio of labor force to population in Allegheny County stood at 48.3 percent. By comparison, the ratio for the state was 49 percent and for the nation as a whole stood at 50.6 percent. Not a lot of difference.

But 25 years later, in 2015, the ratio for Allegheny County had increased by nine percent to 52.7 percent, the Commonwealth's ratio grew to 50.2, and the national ratio fell to 48.9 percent. Thus over 25 years, Allegheny County's labor force to population ratio has moved above the state or national ratio. Undoubtedly, age distribution changes have played a key role in this outcome.

We find similar results when examining the employment to population ratio. Allegheny County (46.1 percent) lagged both the state (46.4 percent) and nation (47.8 percent) in 1990. But 25 years later the County reversed the order as the ratio in 2015 grew to 50.1 percent while the state checked in with a ratio of 47.6 percent while the nation regressed to 46.3 percent. The County increase likely reflects a rise in the number or people of prime working age compared with the age groups in their nonworking years.

But are these ratios, labor force/population and employment/population, a positive indicator for Allegheny County? Only in the sense that employment has held up despite declining population. However, loss of population is almost never a good sign for a county, city or region. Migrants, domestic or international, will be attracted to areas that offer them the best opportunities to find good employment prospects. When job growth is slow, the opportunities just are not there in great abundance as they were 100 years ago.

The causes of long term sluggish employment growth have been commented upon many times in Policy Briefs over the years. Allegheny County, as well as Pennsylvania, is beset by a high tax, oppressive regulatory, pro-union, unfriendly to business environment that hinders the growth of private sector jobs. Unless these growth inhibiting elements are eliminated or greatly ameliorated, there is little reason to believe the pace of job growth will ever accelerate beyond its current anemic rate.

The staff at the Allegheny Institute wishes all of our readers a safe and Happy Thanksgiving.


Frank Gamrat, Ph.D., Sr. Research Associate
Jake Haulk, Ph.D., President

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Pittsburgh, PA15234


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