(The Center Square) — Pennsylvania lost 500,000 jobs in 2020, the Department of Labor and Industry said, and there’s no understanding of when – or if – those positions will return.
“We don’t know the reason why they were lost or if they are coming back,” acting Secretary of Labor Jennifer Berrier told the House Appropriations Committee on Tuesday. “The problem with this is there’s no playbook. I wish I could wipe off my 100-year-old play book from the Spanish influenza, but that’s just not possible.”
Berrier said 6.5 million residents were employed in February 2020 – a level so high that the department said it was woefully understaffed when jobless claims spiked by more than 1.12 million a month later. As of November, about 652,000 jobs have been recovered, Berrier said.
Rep. Jim Struzzi, R-Indiana, pressed Berrier on how much tax revenue the state lost as a result of the governor’s statewide economic shut down orders imposed in March, April and May at the onset of the pandemic.
“Clearly nothing had a bigger impact on our budget this year and last year than people who were put out of work,” he said. “We’ve heard numerous stories of people who just aren’t making it.”
Berrier said she didn’t know the revenue impact, but defended the administration’s orders and blamed individuals’ behavior for some of the economic slowdown that occurred.
“This isn’t just because of the governor’s lockdown,” she said. “We are in the midst of a global pandemic. There’s research that shows individuals were staying home. I want to be clear this wasn’t just a result of the governor’s well-thought-out mitigation orders.”
Independent analysis from the Allegheny Institute of Public Policy of the state's labor market said 2020 job losses rival that of the Great Recession, particularly in the hospitality sector.
The Independent Fiscal Office likewise estimates real GDP shrank 4.1 percent overall in 2020, though the number could fluctuate by as much as two percentage points in either direction when the final results of the fourth quarter are made available. Wage and salaries also declined 1.2% and the state lost 450,000 jobs. While the IFO estimates GDP could recover in just two years, some of those jobs will still be lost in 2026.
“I understand this is unprecedented, but we also have to learn from this and make sure we never put people in this situation again,” Struzzi said. “This won’t be the last pandemic and so moving forward its important that we understand that.”
Gov. Tom Wolf ordered all nonessential businesses to close on March 16, 2020. The mandate – coupled with revised federal rules on who qualifies for unemployment compensation – prompted 2.4 million residents to file claims throughout 2020.
The swell in applications overwhelmed the department and caused delays in sending out payments. One year later, Berrier said her staffing complement has doubled, though retention rate remains low, with about 50% of workers quitting over the “taxing” nature of the job.
“We were asked to serve a part of the population that had never been serviced before, including business owners, independent contractors and gig workers,” she said. “That opened us up to more than 2 million people who never received benefits before.”