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Pennsylvania Faces Economic Challenges Amid Population Decline

A representation of the economic struggles faced by rural Pennsylvania amidst a declining population.

News Summary

Pennsylvania is grappling with significant economic challenges, including a population decline and a challenging business climate. A report from the Center for Rural Pennsylvania highlights that 42 out of 67 counties saw more residents leave than arrive from 2020 to 2023. Comparatively, neighboring West Virginia is experiencing population growth fueled by economic reforms. Additional concerns include a high regulatory burden on businesses and a troubling shortage of child care workers, negatively impacting workforce participation. To address these issues, investments in youth workforce development programs are deemed essential.

Pennsylvania is facing significant economic challenges highlighted by a concerning population decline and an increasingly difficult business climate. A recent report from the Center for Rural Pennsylvania has revealed that the state’s rural areas are losing residents at a rate faster than anticipated, adding to the difficulties faced by the state in comparison to its neighbors. Between 2020 and 2023, data from the U.S. Census Bureau showed that 42 out of the 67 counties in Pennsylvania experienced more people leaving than arriving, emphasizing a troubling trend for the Keystone State.

The economic situation in Pennsylvania has been exacerbated by the rising fortunes of nearby West Virginia. For the first time in a century, West Virginia is witnessing an increase in its population, while simultaneously enjoying improvements in its economic outlook. An analysis by the American Legislative Exchange Council (ALEC) ranks West Virginia 16th nationally, while Pennsylvania’s ranking slipped to 36th and Ohio stands at 25th. This stark contrast reflects diverging economic policies, with West Virginia Governor Patrick Morrisey implementing energy reforms and budget cuts that have spurred growth. In comparison, Pennsylvania Governor Josh Shapiro‘s proposed budget for the upcoming fiscal year includes a staggering $6 billion increase, drawing criticism from Republican Senate leaders for lacking a solid plan to tackle a multibillion-dollar structural deficit.

Moreover, the state’s reliance on potential new revenue sources, such as legalizing recreational marijuana, seems unlikely to gain traction in the current political landscape. As the budget process moves forward, discussions are anticipated to extend beyond the June 30 deadline into the fall as lawmakers contend with the substantial fiscal challenges that lie ahead.

Pennsylvania’s business climate is further hindered by a high number of regulations; the state ranks 14th nationally with approximately 164,000 regulations in place. Critics of existing policies argue that reducing regulatory burdens could provide a boost to businesses, which are currently struggling under the weight of excessive rules. Governor Shapiro’s administration has focused more on corporate welfare programs rather than offering broad support for traditional energy sectors such as coal and natural gas, which have historically underpinned the state’s economy. As a recent case illustrates, U.S. Steel canceled plans for a $1.5 billion upgrade in Pennsylvania, instead choosing to pursue a $3 billion facility in Arkansas, primarily due to permitting delays attributed to stringent regulations.

Compounding these challenges are workforce issues tied to the state’s declining child care industry. In Pennsylvania, the average weekly wage for child caregivers is around $603, significantly lower than half the average for the private sector. Currently, over 3,000 child care positions remain unfilled, leading to unmet demand and leaving many eligible children without service. Legislative efforts proposing $55 million in recruitment and retention bonuses for child care workers are underway, yet the absence of adequate child care options continues to push families out of the workforce, negatively affecting the state’s economy.

The looming shortage of child care workers coupled with an aging population presents a formidable challenge for youth workforce development. As older workers retire, the disparity between available jobs and incoming talent becomes increasingly evident. While migration patterns indicate a stable youth population overall, concentrations in urban areas such as Philadelphia and Pittsburgh have left rural regions underserved, exaggerating the difficulties in filling job vacancies.

To address these issues effectively, targeted investments in youth-focused workforce development programs are being emphasized as a potential remedy. Such initiatives aim to prepare young individuals for the available job opportunities, ensuring that the workforce can adapt to changing economic demands and bolster Pennsylvania’s economy in the long run.