Region lags as employment improves elsewhere

Posted: January 09, 2014

In a bright and airy factory in Northeast Philadelphia, technicians are needed to tackle a three-year backlog of helicopter orders at AgustaWestland.

And in Marlton, a physicians' management company plans to add hundreds of health workers, doctors, and nurses this year.

Meanwhile, researchers and salespeople once employed at Merck & Co.'s Montgomery County plant will spend January polishing their resum├ęs. As of Sunday, 500 of them no longer have jobs.

Hundreds of engineers and others at Lockheed Martin's Newtown facility, in the process of closing, also need work. And Lockheed employees have been laid off in Moorestown as well.

It's January - the time of the year for forecasts. And as usual, the forecast for employment in 2014 is mixed - better nationally, slow locally.

"Nationally, we're going to see a bit of improvement in hiring," said economist Steven G. Cochrane, managing director of Moody's Analytics in West Chester. "There has been an acceleration in the third quarter and fourth quarter in hiring. There are more job openings, and also more job openings that are being filled."

Improvement in the housing market and an increase in auto sales also portend more hiring, since both are indicators of consumer confidence, he said.

National data from the latest survey conducted by Manpower Group, a staffing agency based in Wisconsin, reflect the strongest intent to hire since 2008, with nearly 17 percent of employers planning to hire as opposed to 7 percent planning to cut.

"Employers remain optimistic and continue to gradually improve their hiring projections despite uneven economic recovery and other global and domestic influences," Manpower Group's president, Jonas Prizing, said in a statement.

It's not the same locally.

Moody's Analytics listed the states by potential job growth in 2014.

Pennsylvania ranked 41st, expected to add 75,684 jobs for a growth rate of 1.31 percent. Moody's forecast 53,084 jobs in New Jersey, for a ranking of 37th.

"The whole Northeast region, from Washington on up, is the slowest region in the country," Cochrane said.

Nationally, 15 states have regained all the jobs lost in the recession, but none of them are Pennsylvania, New Jersey, or Delaware.

The region's economy, Cochrane said, is increasingly dependent on global trends. The slowdown in Europe meant less demand for U.S. products, and fewer jobs for truck drivers and warehouse workers moving goods to ports, he said.

New Jersey has been struggling. Its November unemployment rate at 7.8 percent was above the nation's rate of 7 percent.

Changes in the environment for some of New Jersey's core sectors have affected employment, said Sohini Chowdhury, a Moody's economist who focuses on the state.

"It just so happens the state is overdependent on financial services. Those jobs aren't going to be the same again," she said.

As the financial crisis worsened at banks and brokerages, the government increased regulation. Uncertain of the impact, financial institutions stopped hiring and cut bonuses and pay, she said.

In New Jersey, that rippled through the economy, as bankers, their wallets thinned, reined in their buying, Chowdhury said.

Pharmaceutical hiring has also declined. "New Jersey used to be called the medicine chest of the nation," she said. But those jobs are disappearing as patents run out on best-selling drugs.

Pennsylvania's situation is tied more to a slow recovery from the recession.

The state's payrolls dropped by 256,100 jobs from peak employment in January 2008 to the worst of the crisis in February 2010. To catch up, the state needs to generate 50,000 more jobs.

Shale mining has pushed North Dakota to the top of the states in job growth, and in Pennsylvania, mining employment has nearly doubled in a decade from 18,000 in 2003 to 35,600 in November 2013 - with no slowdown during the recession.

But the growth in mining employment has not been enough to rebuild the state's job market.

Hospitals and schools have been strong employers, consistently adding jobs through the recession. But in the last few months, that sector has begun to decline, attributable in part, Cochrane said, to federal cutbacks in research funding.

On Wednesday, the Center City District will present a study showing that Philadelphia has fallen behind other cities. Boston, New York, and Washington have added jobs since 1970; in Philadelphia, jobs have disappeared.

Even so, the situation is improving. In November, the unemployment rate in Philadelphia was 9.5 percent, down from 10.2 percent in October and 11.6 percent in July 2012, when city joblessness was at its worst.

"While the indications are positive, we need to keep this modest improvement in context," Mayor Nutter said in a statement. "There are still far too many unemployed people in this city."

Among them is Tracey Mulvehill of Tacony, who has been looking for work for more than a year since being laid off from her office manager job.

"I'm struggling," she said.

On Wednesday, she and others will be on a bus to Washington to lobby Congress to extend unemployment benefits.

Extra federal benefits came to an end Dec. 28, affecting 1.3 million people nationally, 73,330 in Pennsylvania, and 90,300 in New Jersey.



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