Report Underscores the Need for Workforce Development Investments to Address Wage Stagnation and Joblessness Among Key Demographic Groups
Harrisburg, PA: Today, the Pennsylvania Workforce Development Association released its Annual Labor Market Update, which includes a full-year review of Pennsylvania’s labor market data and other important economic indicators. The report found that while Pennsylvania’s economy is healthy, the labor market is rebalancing to favor employers and key demographic groups are facing workforce challenges. Workforce Development can help ensure that workers have the skills to fill available jobs and advance in their careers, breaking the cycle of wage stagnation.
“Pennsylvania’s economy is healthy, but underlying factors make it clear that our policymakers must invest in workforce development,” said Carrie Amann, Executive Director of the Pennsylvania Workforce Development Association. “Our research shows a high share of prime-age men without jobs, one in seven in Pennsylvania. Additionally, workers without a college degree have experienced long-term wage stagnation. These populations are likely to benefit from robust workforce development services. If we focus on workforce development, Pennsylvania can build on its healthy economy and ensure that all Pennsylvanians can build strong, thriving careers in our commonwealth.”
PWDA’s Annual Labor Market Update provides a comprehensive view of the commonwealth’s economy, smoothing month-to-month fluctuations. The report assesses how Pennsylvania’s economy currently stands compared to four years ago and pre-pandemic.
For policymakers, administrators, workforce system boards and providers, and other partners interested in taking action informed by data, the Annual Update can help identify the workforce challenges Pennsylvania must address to build a thriving economy for all workers and businesses.
Key Findings in the Annual Labor Market Update
Pennsylvania’s Labor Economy of the Last Two Years Has Been Healthy
As highlighted in prior “Workforce Trends” reports, Pennsylvania’s economy in the last couple of years experienced, by several measures, the tightest labor market on record. The number of jobs in Pennsylvania increased steadily, providing employment for most Pennsylvania workers seeking a job.
Available Workers and Jobs Have Rebalanced
The most recent months of data reveal a labor market rebalancing. Pennsylvania no longer has substantially more job openings than unemployed workers. Quit rates, one symptom of individual worker leverage, have dipped. The data also show that, even in the tighter labor market of 2023 and 2024, Pennsylvania made limited progress on some of our most vexing long-term labor market challenges, such as wage stagnation and large-scale joblessness among prime-age men (25-54 years old).
Workforce Development Remains Vital
In recent months, the economic challenges faced by non-college workers – nearly two-thirds of U.S. workers – have received unprecedented attention. Policy shifts outside the field of workforce development, most prominently on trade and immigration, have been in the limelight in national discussions. Also, expressed has been bipartisan support at the national and state levels for expanding apprenticeships. Given the high share of prime-age men without jobs, one in seven in Pennsylvania, and the long-term wage stagnation experienced by workers without a college degree, robust workforce development services and direct job creation must be part of national and state policy going forward.
A Snapshot of Pennsylvania’s Economy and Workforce
Pennsylvania’s Economy is Healthy, with Lower Unemployment Rates in Every Workforce Development Area Than Pre-Pandemic
Since 2022, the Pennsylvania labor market has offered robust job opportunities to our workers.
In December 2024 (the latest data available), Pennsylvania had 139,600 more jobs than in January 2020, the peak employment before the pandemic. Our job growth remained steady throughout 2024 and exceeded U.S. job growth in the year’s second half. Pennsylvania job growth usually runs along at only half of U.S. job growth.
The Pennsylvania unemployment rate equaled 3.6% in December 2024. Before mid-2022, the unemployment rate in Pennsylvania never dropped below 4%, going back to January 1976 (when the current state unemployment rate data series began). In the 30 months since July 2022, Pennsylvania’s unemployment rate has been at or below 4%.
Unemployment rates remain lower in every county and every Local Workforce Development Area (LWDA) than before the pandemic, with the drop in unemployment largest in the western half of Pennsylvania.
For an extended period from the summer of 2021 to late 2024, Pennsylvania had fewer unemployed workers than job openings for the first time on record. This ratio fell to 0.6 unemployed workers for each job opening at one point.
Recent Labor Market Tightening Shows an Increasingly Difficult Market for Workers, Stagnating Wages
In November 2024, the ratio of unemployed workers to job openings climbed back to one-to-one, giving workers less choice of jobs and employers more choice of workers.
Quit rates in Pennsylvania declined in recent months to 1.7%, down from a peak of 2.8% in May 2022. This suggests that workers have declining confidence in their ability to find an equivalent or better job if they quit.
Virtually all of Pennsylvania’s rural and western Local Workforce Development Areas (LWDAs) have fewer jobs now than before the pandemic. The eight LWDAs that saw the biggest job declines (in percent) are all in western Pennsylvania. Population trends leading to declining labor forces in these areas drive declining job numbers and low unemployment.
While inflation-adjusted wages grew 5% to 10% from 2019-2023 in the bottom half of the earnings distribution, they didn’t grow much. Updated data show that average weekly wages grew even less from 2019 to 2024. A big reason is the high rate of inflation in 2021 and 2022.
Prime-Age Men Struggle to Reach Historic Employment Levels
In 2023 (the most recent data), about 361,000 prime-age Pennsylvania men did not have jobs, an improvement from approximately 390,000 in 2019. We need another 260,000 jobs to return to 1960s employment rates for prime-age men. Eight of the 22 Workforce Development Areas have a prime-age employment rate of less than 80% – meaning that more than two of every 10 prime-age men are not employed.
One factor contributing to limited progress on prime-age male employment: Pennsylvania manufacturing and construction employment levels are still 1.6% below their pre-pandemic levels. Low blue-collar job growth highlights the importance of maintaining policies that grow public and private investment in manufacturing and construction.
“Pennsylvania’s long-term challenges underscore the continuing importance of workforce development services,” said Carrie Amann. “To boost jobs in western Pennsylvania, raise male employment rates, and achieve more substantial wage growth for non-college workers, we need to expand credential attainment and on-the-job training aligned with employer demand and invest in barrier removal and retention supports customized to the needs of particular workers. The data also suggest that there is no escaping the need for direct job creation to reattach the long-term unemployed to the job market.”
The Pennsylvania Workforce Development Association (PWDA) serves as the voice of the Pennsylvania workforce development system and a clearinghouse for workforce development information statewide. Known forPennsylvania’s premier annual workforce development gathering every spring, we provide development and capacity building opportunities to workforce development professionals, local workforce development boards (WDBs), and other stakeholders while continuing proactive advocacy efforts on behalf of Pennsylvania’s workforce development system. Learn more by visiting https://www.pawork.org
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