This research analyzed unemployment from 2003 to 2010 in rural and urban Pennsylvania. It used labor force data from the U.S. Bureau of Labor Statistics (BLS) to examine the pattern of unemployment in ru- ral and urban counties. And it used BLS industry data to investigate the industries that have been impacted by the recession. It also used unemployment compen- sation claims and payment data from the Pennsylva- nia Department of Labor and Industry’s Center for Workforce Information and Analysis (CWIA) to build a profile of the unemployed by demographic char- acteristics and to measure trends in unemployment claims. The research found that rural and urban labor forces contracted during the recession. After positive growth from 2003 until 2008, the number of available workers declined in 2009 and 2010. According to BLS data, employment in rural counties declined 4 percent in 2009 and a further 0.7 percent in 2010. Urban counties experienced 3.6 and 1.6 percent declines in 2009 and 2010, respectively. The number of unemployed persons in rural coun- ties fell from 2003 to 2007. However, 2008 saw a 24 percent increase in the number of unemployed per- sons. In 2009, there was a 50 percent increase in rural unemployment, and in 2010, a 3 percent increase. Historically, the unemployment rate is higher in rural counties than urban counties. This pattern was consistent over the study period. In 2009, there was a pronounced increase in the unemployment rate in both rural and urban counties (2.9 and 2.6 percentage points, respectively). This larger increase in rural unemployment widened the difference between the rural and urban unem- ployment rates to 0.8 percentage points. Histori- cally the difference was closer to 0.5 percentage points. BLS data provide evidence that the recession had broad-based impacts for industries in rural counties. Consistent with other recessions, manu- facturing suffered. However, this last recession also impacted other industries including construction, fi- nancial activities, information, leisure and hospitality, trade/transportation and utilities, and other services. Education and health services, and natural resources and mining were the sole bright spots as both added establishments during the recession. There was a positive relationship between estab- lishments and employment. Therefore, the closure of rural industry establishments brought corresponding job losses. Manufacturing posted the most signifi- cant job losses among rural counties (approximately 37,000). However, thousands of jobs were lost in the rural industries of construction, financial activities, information, other services, and trade, transportation and utilities. This attests to the broad impacts of the economic downturn. Compared to their urban counterparts, rural un- employment compensation (UC) payment recipients were more likely to be older, male, and white (non- Hispanic), and to have worked in manufacturing. An examination of UC payments by industry provided evidence of the widespread impacts of the economic downturn. Comparing Decembers in 2007, 2008, 2009, and 2010,the research found that the share of UC payments among many rural industries was largely unchanged, suggesting that many were impacted to similar degrees. The share among the manufacturing industry declined somewhat in 2010, Executive Summary Unemployment in Pennsylvania, 2003-2010 By: Simon Condliffe, Ph.D. West Chester University of Pennsylvania September 2012
Transcript
This research analyzed unemployment from 2003 to 2010 in rural and urban Pennsylvania. It used labor force data from the U.S. Bureau of Labor Statistics (BLS) to examine the pattern of unemployment in ru-ral and urban counties. And it used BLS industry data to investigate the industries that have been impacted by the recession. It also used unemployment compen-sation claims and payment data from the Pennsylva-nia Department of Labor and Industry’s Center for Workforce Information and Analysis (CWIA) to build a profile of the unemployed by demographic char-acteristics and to measure trends in unemployment claims.
The research found that rural and urban labor forces contracted during the recession. After positive growth from 2003 until 2008, the number of available workers declined in 2009 and 2010.
According to BLS data, employment in rural counties declined 4 percent in 2009 and a further 0.7 percent in 2010. Urban counties experienced 3.6 and 1.6 percent declines in 2009 and 2010, respectively.
The number of unemployed persons in rural coun-ties fell from 2003 to 2007. However, 2008 saw a 24 percent increase in the number of unemployed per-sons. In 2009, there was a 50 percent increase in rural unemployment, and in 2010, a 3 percent increase.
Historically, the unemployment rate is higher in rural counties than urban counties. This pattern was consistent over the study period. In 2009, there was a pronounced increase in the unemployment rate in both rural and urban counties (2.9 and 2.6 percentage points, respectively). This larger increase in rural unemployment widened the difference between the rural and urban unem-ployment rates to 0.8 percentage points. Histori-cally the difference was closer to 0.5 percentage points.
BLS data provide evidence that the recession had broad-based impacts for industries in rural
counties. Consistent with other recessions, manu-facturing suffered. However, this last recession also impacted other industries including construction, fi-nancial activities, information, leisure and hospitality, trade/transportation and utilities, and other services. Education and health services, and natural resources and mining were the sole bright spots as both added establishments during the recession.
There was a positive relationship between estab-lishments and employment. Therefore, the closure of rural industry establishments brought corresponding job losses. Manufacturing posted the most signifi-cant job losses among rural counties (approximately 37,000). However, thousands of jobs were lost in the rural industries of construction, financial activities, information, other services, and trade, transportation and utilities. This attests to the broad impacts of the economic downturn.
Compared to their urban counterparts, rural un-employment compensation (UC) payment recipients were more likely to be older, male, and white (non-Hispanic), and to have worked in manufacturing.
An examination of UC payments by industry provided evidence of the widespread impacts of the economic downturn. Comparing Decembers in 2007, 2008, 2009, and 2010,the research found that the share of UC payments among many rural industries was largely unchanged, suggesting that many were impacted to similar degrees. The share among the manufacturing industry declined somewhat in 2010,
Executive Summary
Unemployment in Pennsylvania, 2003-2010
By: Simon Condliffe, Ph.D.West Chester University of Pennsylvania
September 2012
as shares among other industries, particularly con-struction, increased.
The age distribution of UC payment recipients changed little over the study period, providing evidence that rather than one group being dispro-portionately impacted, all age groups were similarly affected.
Introduction
The percentage of UC payments to women rose since 2007. Payments to men continued to outnum-ber those to women, however the share of payments to men receded as payments to women grew more quickly. White (non-Hispanic) persons were the pri-mary recipients of UC payments in rural counties.
Goals and Methodology
1. For a description of Unemployment Compensation programs, visit http://www.portal.state.pa.us/portal/server.pt/community/unemploy-ment_compensation/10317.2. Certain data (U.S. Bureau of Labor Statistics Local Area Unemploy-ment Statistics) covered the period 2003-2010. Other data (Center for Workforce Information and Analysis or CWIA) covered December 2007 to December 2010. These dates were determined by CWIA data availabil-ity and covered the recent recession with information about the pre- and post-recession economy.
2 The Center for Rural Pennsylvania
In March 2010, nine months after the official end of the recession in June 2009, there were 549,661 unemployed persons in Pennsylvania (U.S. Bureau of Labor Statistics, 2010). This was the highest count of the unemployed in 27 years. More than 171,000 people were without work for more than 26 weeks (Pennsylvania Department of Labor and Industry, 2010), which is the duration of standard state unem-ployment benefits1.
Of the Pennsylvanians unemployed in 2009, ap-proximately half had no previous unemployment claims from 2001 to 2007, which indicated that the ranks of the unemployed not only grew, but included more groups previously unaffected by job loss.
According to the National Bureau of Economic Research, the recession began in December of 2007 and ended in June 2009. However, the unemployment rate in Pennsylvania peaked in the spring of 2010 at 8.8 percent (Pennsylvania Department of Labor and Industry, 2010). One would have to look back to October of 1984 to find a rate as high.
The 8.8 percent unemployment rate presented only a partial picture of unemployment in the state. Thirty-seven counties had unemployment rates above 9.4 percent, with Cameron County having the highest (14.8 percent). Of those 37 counties, 30 (81 percent) were rural. While data on the unemployment rate pro-vide an overview of unemployment in Pennsylvania, there was relatively little data analysis of the unem-ployed themselves.
This research analyzed various data to provide a profile of the unemployed in rural Pennsylvania, to identify the industry groups that have been affected by the most recent recession, and to examine the duration of unemployment.
The researcher used a variety of secondary data sources to develop a profile of Pennsylvania’s un-employed. The data, from 2003 to 20102, covered the last recession. The data described the number of unemployed persons, the number of unemployment claims, the unemployment rate, and the rural and ur-ban profile of the unemployed in terms of age, gender and race.
The research used the Center for Rural Pennsylva-nia’s definition of rural and urban counties, which is based on population density. A county is rural when the number of persons per square mile within the county is less than 284. Counties that have 284 per-sons or more per square mile are considered urban. Of the state’s 67 counties, 48 are rural and 19 are urban.
Following is a description of the data sources and methods used to analyze the data.
Labor marketThe U.S. Bureau of Labor Statistics’ (BLS) Lo-
cal Area Unemployment Statistics (LAUS) program reports monthly labor market data by county. The research matched each county to the Center for Rural Pennsylvania’s definition of rural and urban coun-ties. This data source was selected because data were available that covered the pre- and post-recession period, and in sufficient geographic detail to enable rural and urban measures to be calculated. LAUS contains the following variables: labor force, employed persons, unemployed persons, and unemployment rate.
In terms of the labor force, county labor force can contract (expand) as workers leave (enter) the labor market. Only persons in the labor market are counted in the employment and unemployment data. Persons
who are outside of the labor force include, but are not limited to: full-time students, retirees, homemakers, and discouraged workers.
For the employed and unemployed, LAUS data report whether a person is employed or unemployed (irrespective of the number of jobs held) by county of residence.
LAUS data on the unemployment rate were used to measure absolute changes in unemployment rates. The data identified counties where the greatest changes in the unemployment rate occurred.
LAUS data from 2003 to 2010 were analyzed; this period was chosen because it matched the Pennsyl-vania Department of Labor and Industry’s Center for Workforce Information and Analysis (CWIA) data. The first full year of the recession was 2008. LAUS results are presented in tables distinguishing all coun-ties by rural and urban.
Industries impacted by the recessionBLS’s Covered Employment and Wages (CEW)
program reports employment, number of establish-
Table 1. Rural and Urban Labor Force, 2003-2010
Source: BLS.
Table 2. Rural and Urban Employment, 2003-2010
Source: BLS.
ments, and total wages by county. CEW data report employment by job location. Some CEW data include unknown locations and suppressed data. These were excluded from the analysis.
Employment at private or government establish-ments was included. However, self-employment data were not included. The period covered was 2003 to 2010 and the data represent an annual average for each year.
Job losses by industry were calculated from CEW data. These results permit the identification of the industries most impacted by the recession. Industries are classified by supersectors, such as natural resourc-es and mining, construction, manufacturing, trade, transportation and utilities, information, financial activities, professional and business services, educa-tion and health services, leisure and hospitality, other services, and public administration.
Profile of the unemployed CWIA collects data on claimants of unemployment
insurance. There are two CWIA datasets of interest.The first dataset provided initial and
continuing claims by county. Data from January 2003 to December 2010 were available. The counties were coded as rural or urban. The increase in initial claims was used to analyze the growth of unemployed persons for rural and urban counties. Continuing claims data by rural and urban counties were used to identify the long-term unemployed.
The second data set included claimants’ age, gender, race and industry. These were used to create a profile of the unem-ployed by rural and urban county desig-nation. These data covered the period of December 2007 to December 2010.
The researcher conducted tests of sta-tistical significance between the rural and urban data to determine if there were any statistical differences.
Labor forceTable 1 illustrates the trend in labor
force by rural and urban counties. The la-bor force was significantly larger in urban counties than rural counties: a reflection of the population size. The labor force
Unemployment in Pennsylvania, 2003-2010 3
Results
Table 4. Rural and Urban Unemployment Rate, 2003-2010
Source: CWIA. The unemployment rates for rural and urban areas were statisti-cally significant.
Figure 1. Unemployment Ratein Rural and Urban Pennsylvania Counties and the U.S.
Source: BLS.
4 The Center for Rural Pennsylvania
grew between 2003 and 2008, but contract-ed in 2009 and 2010. This was synonymous with a decline in the labor force participa-tion rate that often accompanies periods of weak economic conditions. The rural labor force shrank by 0.9 percent in 2009, slightly more than the contraction in urban counties.
Rural employment had been growing steadily between 2003 and 2005 (See Table 2 on Page 3). From 2006 to 2008 growth slowed considerably. In 2009 employment growth turned sharply negative. The em-ployment losses continued in 2010, albeit at a lower rate.
Unemployment in rural counties was less than 100,000 for 5 of the 8 years being studied (See Table 3). In 2009, there was a 50 percent increase in unemployment in ru-ral counties. The ranks of the unemployed continued to grow in 2010, but that growth was lower at 3 percent.
After falling between 2003 and 2007, the statewide unemployment rate grew rapidly in 2008 and 2009, and remained high in 2010 (See Table 4). In 2008, the unemploy-ment rate grew 1 percentage point, and, in 2009, the unemployment rate grew again, particularly among rural counties (2.9 percentage points). The CWIA reported that the average regular UC duration in 2010 was 20 weeks, or 4 weeks longer than the 2007 average.
Historically, the unemployment rate has been higher in rural counties than urban counties (See Figure 1). This pattern was consistent over the study period. In 2009, there was a pronounced increase in the unemployment rate in both rural and urban counties (2.9 and 2.6 percentage points, respectively). The larger increase in rural unemployment widened the difference between the rural and urban unemployment rates to 0.8 percentage points. Historically, the difference has been closer to 0.5 per-centage points.
Rural counties comprise approximately 27 percent of the state’s labor force, but ac-count for more than 28 percent of the state’s unemployed persons.
Table 3. Rural and Urban Unemployment, 2003-2010
Source: BLS.
Unemployment in Pennsylvania, 2003-2010 5
Table 5. County Labor Force, Employment, Unemployment, and Unemployment Rate
Source: BLS. Rural counties are shaded.
6 The Center for Rural Pennsylvania
Table 6. Establishments by Industry, 2003-2010
Source: BLS. Unclassified not shown.
Table 7. Employment by Industry, 2003-2010
Source: BLS. Unclassified not shown.
Unemployment in Pennsylvania, 2003-2010 7
Table 5 on Page 5 shows the growth rates in la-bor force, employment, unemployment, and the unemployment rate by county. The table also ranks the counties based on these growth rates where, the higher the rank, the larger the growth rate (1 equals the largest growth and 67 equals the smallest).
Greene County (a rural county), experienced the largest growth in the labor force at 7.2 percent. Cameron County (also a rural county) experienced an 8.7 percent contraction in the labor force, which was the sharpest decline of any county. These two counties also experienced the highest rate of employ-ment growth (Greene) and the highest contraction in employment (Cameron) in the state.
Franklin County (a rural county) experienced the sharpest increase in the number of unemployed persons (141 percent since 2007). Potter County (also a rural county) recorded the lowest increase in the number of unemployed persons, although there was still an increase of 48.3 percent.
Industry AnalysisTable 6 shows the number of establishments by
industry and location. The number of establishments has contracted sharply in several industries. Rural construction establishments are one thousand fewer in 2010 compared to 2004. Rural manufacturing shed approximately 600 establishments since 2003.
Rural business-related industries were also nega-tively impacted. Rural financial activities establish-ments fell by approximately 300 from 2007. Rural professional and business services establishments also fell, but by a lesser amount.
Figure 2. Number of UC Payments in Rural and Urban Counties
Source: CWIA.
Two bright spots for rural establishments were education and health services, and natural resources and mining. Education and health services establish-ments in rural counties grew consistently over the period from 8,449 in 2003 to 14,771 in 2010. Natural resources and mining added 177 establishments in rural counties over the study period.
The trends in employment by industry mirror those of establishments: the industries with declining estab-lishments had dwindling employment (See Table 7). Rural constructions jobs were down approximately 7,000 from 2006. Rural manufacturing jobs had been declining prior to the recession, shedding approxi-mately 1,000 to 2,000 jobs per year. However, the pace of decline hastened significantly with the reces-sion. Approximately 6,000 rural manufacturing jobs were lost between 2007 and 2008. Almost 27,000 were shed between 2008 and 2009.
Service industries, such as information and finan-cial activities, lost employment over the study period in rural counties. Information industries in these counties shed more than 3,000 jobs from their peak in 2006. Rural employment in the financial activities in-dustry had been falling since 2003 and lost over 3,500 jobs over the study period.
Profile of the UnemployedUnemployment compensation (UC) payment data
are presented by age, gender, race, and industry for rural and urban Pennsylvania counties. The data cover the period of December 2007 to December 2010. Fig-ure 2 presents the trends in the number of payments by rural and urban counties.
8 The Center for Rural Pennsylvania
Rural and urban UC payment trends followed similar patterns. For example, the highest month for the total number of payments (March 2009 with 1,550,000) was also the highest month for rural and urban payments (559,980 and 990,020, respectively).
Table 8 summarizes the age, gender, race, and in-dustry of the individuals who received UC payments over the period of December 2007 to December 2010.
Overall, Table 8 reveals that, compared to their urban counterparts, rural UC payment recipients were more likely to be slightly older, male, and white (non-Hispanic), and working in construction or manufac-turing.
Table 8. Percent of UC Payments by Age, Gender, Race and Industry
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ce: C
WIA
. Sta
tistic
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om D
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UC
pay
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Table 9 presents UC payments by industry. For rural counties, the percentage of UC payments by industry changed little (only a few percentage points in the cases of natural resources and mining, trade, transportation and utilities, information, financial activities, professional and business services, other services, and government). That is, the share of UC payments by industry did not fluctuate greatly dur-ing the period of December 2007 to December 2010. For example, most industry shares of UC payments moved by only a few percentage points. The construc-tion industry’s percentage of UC payments fluctu-ated between 23 and 28 percent. The manufacturing industry was the most volatile, fluctuating between 17 and 25 percent.
The final row of the table illustrates that the total number of payments increased dramatically over the period. Given that the share of payments across indus-tries was, in many cases, relatively unchanged, this is evidence of a recession that was broad-based.
Table 10 reports the UC payments by age, gender and race of the recipient for the month of December in 2007, 2008, 2009, and 2010. Despite the rise in total payments, the age distribution changed little for both rural and urban counties. Over the period, there was a slight uptick in payments to older persons (a 2 percentage point increase in the 55-64 age group), and a slight decrease among the younger age cohorts.
The distribution of payments by gender shifted over the period. The share of payments to females increased several percentage points while the share of payments to males decreased (25,050 more females were receiving UC payments in December 2010 than December 2007). Nevertheless, rural payments to males were approximately twice that of payments to females (177,260 to 90,610 respectively). The urban gender mix was different: although payments to males outnumbered payments to females, the mix was less skewed toward males. In December 2010, 308,450 urban UC payment recipients were male, and 215,180 were female.
The racial composition of payments shifted only slightly over the period. Overwhelmingly, payments were received by white, non-Hispanics: 256,080 UC payment recipients were white, non-Hispanic in December 2010. However, for rural counties, this group’s share of total payments decreased 1 percent-age point over the period, while the Hispanic share increased 1 percentage point.
Unemployment in Pennsylvania, 2003-2010 9
Table 11 on Page 10 presents data on the rural UC payments by total calendar year. In 2009, payments topped $1 million to rural persons aged 35-44 and 45-54. These figures declined somewhat in 2010, but remained higher than those in 2008. Indeed, 2009 represents the high-est number of claims for all ages, genders, and races; and the highest year of payments for all industries (save education and health services).
Table 12 on Page 11 shows UC claims data for rural and urban counties. New claims are the first claim made by an indi-vidual in a claim year. Initial claims include new claims and transitional and additional claims. Naturally, initial claims are higher than new claims since they incor-porate both the first claim in a calendar year and any later claims. Contin-ued weeks claimed are a
count of all claims to receive benefits. Initial claims measure emerging unemployment and continued weeks claimed measure the number of persons claim-ing unemployment benefits3.
Table 9. Percent of UC Payments by Industry (Decembers 2007, 2008, 2009)
Source: CWIA. A statistically significant difference was found between rural and urban UC payments for data from December 2007 to December 2010.
Table 10. Percent of UC Payments by Recipient Age, Gender and Race (Decembers 2007, 2008, 2009)
Source: CWIA. Columns may not add up to 100% due to rounding or reporting error.
3. http://www.ows.doleta.gov/unemploy/claims.asp
10 The Center for Rural Pennsylvania
Rural unemployment claims had been declining for several years (2003-2006). This trend reversed in 2007 and 2009, with 2009 witnessing a dramatic increase in claims. Rural initial claims grew 8 percent in 2008 and 22 percent in 2009. Rural new claims echoed this pattern with 9 percent and 13 percent growth in 2008 and 2009, respectively. In 2010, new and initial claims retreated from their 2009 high.
After several years of declines, rural continuing claims rose sharply in 2008 and 2009. In 2009, rural
Conclusions
Table 11. Total Rural UC Payments by Calendar Year
Sour
ce: C
WIA
.
continuing claims increased by more than 1 million. Urban continuing claims increased more than 2 mil-lion. In 2010, some continuing claims declined but overall they remained higher than their pre-recession levels.
The economic downturn had widespread impacts on rural Pennsylvania’s labor force. The rural unemploy-ment rate reached 9 percent in 2010, more than dou-
ble its 2007 value. The urban unemploy-ment rate similarly doubled to 8.5 percent. The rural unemployment rate continued to be higher than its urban equivalent through the study period. Indeed, the rural-urban unemployment rate spread widened to 0.8 percent in 2009, suggesting a more rapid decline in rural conditions that year. Cor-respondingly, rural counties topped a list of counties with the highest increases in the unemployment rate (namely, Cameron, Fulton, Carbon, Schuylkill, Mercer, Clar-ion, Huntingdon, Bedford, Jefferson, and McKean). The unemployment rate for these counties increased more than 5 percentage points since 2007.
Simultaneous to the economic downturn, the rural labor force contracted in 2009 and 2010 as potential workers left the job mar-ket. In total, more than 22,000 rural work-ers left the labor force between 2008 and 2010 (about 1.2 percent loss since 2008). The urban labor force shrank by more than 76,000, or 1.6 percent, during the same period. Rural counties topped the list of counties with the greatest contraction in the labor force (namely Cameron, Fulton, McKean, Snyder, Mercer, Elk, Adams and Lawrence).
Rural industries shuttered establishments and shed jobs. Rural manufacturing’s de-cline hastened with the recession. However, negative impacts of the recession extended well beyond manufacturing. Construction, information, leisure and hospitality, other services, and trade, transportation and utili-ties all closed establishments and elimi-nated thousands of positions.
Unemployment in Pennsylvania, 2003-2010 11
The demographics of persons receiving UC pay-ments provide evidence that, rather than single groups being impacted by the weak economic conditions, multiple groups were impacted and to similar degrees. The age of UC payment recipients showed relatively little change over the study period. Despite a sharp increase in total payments to rural recipients, there was only a slight uptick in payments to older persons (aged 55-64) and a slight decrease in payments to those aged 35-44 and 20-24.
In rural counties, payments to females as a share of total payments increased. Rural UC payment recipi-ents were more likely to be male than urban UC pay-ment recipients.
Rural UC payments recipients are predominantly white, non-Hispanic.
Rural UC payments by industry revealed that, while layoffs in manufacturing were substantial indeed, strong growth of payments in other industries (e.g. construction, trade, transportation and utilities) meant that manufacturing’s share of UC payments receded. This is further evidence of the broad-based nature of the economic downturn. More than 2 years after its end, the last recession continued to leave its mark on the rural economy.
ReferencesPennsylvania Department of Labor and Industry. (2010) Pennsylvania Fast Facts, June.
Pennsylvania Department of Labor and Industry’s Center for Workforce Information and Analysis (CWIA).
(2011) Using Unemployment Compensation Information to Understand Your Local Economy. http://www.
