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Rural areas of Pennsylvania hardest hit by unemployment

08.29.09

September 2009, Allentown/Bethlehem/Easton edition of The Union News

Rural areas of Pennsylvania hardest hit by unemployment

BY PAUL TUCKER
THEUNIONNEWSABE@AOL.COM

REGION, August 15th- Months of layoffs have resulted in the loss of 182,000 jobs in Pennsylvania since the start of the recession. The labor market in the state is weaker today than it has been at any point since the early 1980’s. The Pennsylvania unemployment rate in the second quarter of 2009 was 8.1 percent, up from 4.5 percent in the fourth quarter of 2007.

The recession also has disproportionately impacted rural Pennsylvania, which has seen the largest increase in unemployment rates during the downturn. In the fourth quarter of 2007, the unemployment rate in rural portions of the Commonwealth was 4.9 percent, compared to 4.4 percent in urban areas. By the second quarter of 2009, the overall unemployment rate in rural areas of Pennsylvania was a full percentage point higher than the urban rate at 8.9 percent.

In the second quarter of this year, the following rural counties have the highest unemployment rates in Pennsylvania: Cameron (17 percent), Elk (14. 4 percent), Fulton (13.7 percent), Mercer (11.6 percent), Potter (11.4 percent), Bedford (11.2 percent), Huntingdon (11.2 percent), McKean (10.6 percent), Clearfield (10.5 percent), and Carbon (10.3 percent).

“The hardship of rising unemployment has not been equally shared. Our estimates show that the unemployment rate among African-Americans in Pennsylvania was 12.9 percent in the second quarter compared to 7.2 percent for whites. As a result, the gap between African-American and white unemployment rates has doubled over the course of the recession,” said Mark Price, Pd.D. and Labor Economist for the Keystone Research Center in Harrisburg, an nonprofit, nonpartisan economic research organization.

Following the 1981 recession, unemployment in rural Pennsylvania reached a staggering 17 percent compared to 12 percent in rural Pennsylvania, explained Stephen Herzenberg, Ph.D., and Economist and Executive Director of the Keystone Research Center.

“It is quite troubling to see rural unemployment rates begin to pull away from urban unemployment rates. Like the rising unemployment rate for African-Americans, the disparate impact of this recession on people in rural areas points toward the need for more investment in education and workforce development,” said Mr. Herzenberg.

For African-Americans in Pennsylvania, the rise in unemployment during this recession is now as great as the increase in unemployment experienced during the severe 1981 recession.

“This recession has hit African-Americans just as hard as the brutal recession of 1981, which illustrates that the Commonwealth has tremendous work left to do in ensuring equal opportunity for African-Americans. Perhaps the greatest challenge we face in this regard is achieving more equity in school funding,” added Mr. Price.

Meanwhile, the United States Department of Commerce reported that gross domestic product (GDP) contracted at a 1 percent annual rate in the second quarter of 2009, a improvement over the 6.4 percent decline in the previous quarter. The improvement was likely due to the American Recovery and Reinvestment Act which added more than 2 percent to GDP in the second quarter through increases in direct government spending, the extension of unemployment benefits, increases in food stamp benefits, and one-time payments to Social Security beneficiaries.

Mr. Price said he is concerned that the remaining stimulus spending will not be large enough to offset the negative impact of budget cuts being made by state and local governments across the country.

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