By Jason Schunkewitz and Adam Ghazzawi
An Analysis of COVID-19 Impacts on the Pennsylvania Economy
COVID-19 has wreaked havoc on the Pennsylvania economy. Since March 2020, the pandemic has forced many businesses to close, leaving employers with no option but to furlough and lay off employees. Timelines to reopen cities have been highly susceptible to setbacks and shifting dates, which have further contributed to concerns over a delayed economic recovery.
Unemployment claims in Pennsylvania skyrocketed in March and April 2020 as businesses shuttered and employees were unable to work. Based on unemployment data from the Pennsylvania Department of Labor and Industry (L&I) collected in December 2020, the number of first-time unemployment claims peaked in April 2020 at more than 890,000, more than 12 times the number of initial claims filed prior to the start of the pandemic. An initial claim is any new unemployment claim for an individual that does not currently collect unemployment benefits. A continuous claim is any unemployment claim for an individual that is currently collecting unemployment benefits and requires the continuation of said benefits. Although L&I calculates continuous claims weekly, this paper uses the total amount of continuous claims at the end of the first week of each month as a monthly total so as not to count individuals more than one time. December claims totals are incomplete based on available data at the time that this was written.
Although the monthly initial claims began to reach pre-pandemic levels in September 2020, individuals continued to file for unemployment benefits at higher-than-average rates over the course of 2020. High rates of continuous claims indicate that hundreds of thousands of labor force workers across the state struggled to find employment.
Jason Schunkewitz is in his final year of the dual Master of City and Regional Planning and Master of Urban Spatial Analytics program focused on community economic development. He is passionate about creating economic opportunity through education and workforce development initiatives. Outside of work, he spends most of his time outside or in the kitchen trying new recipes.
Adam Ghazzawi is a second-year Master of City Planning student specializing in Smart Cities. Adam’s passionate about leveraging data and technology to ensure cities are equitable, better connected, and responsive to a changing climate.
Differing Recovery Patterns in Urban and Rural Areas
Within Pennsylvania, there are thirty rural counties, thirty-three small urban counties, and four large urban counties: Philadelphia, Allegheny, Montgomery, and Delaware. Unemployment claims in all three urban-rural groups spiked immediately after the pandemic began and started to significantly decline at the beginning of the summer comparable with state level trends.
As of November 2020, unemployment claims began to approach pre-pandemic levels. Out of all three geographic groups, rural counties were the closest to reaching this recovery marker as approximately 28,000 rural county residents remained on unemployment, which compares to 19,300 claims reported at the beginning of March 2020. Urban counties have experienced a slower recovery whereas unemployment claims for small urban counties are more than double (182k vs. 75k) pre-pandemic levels and almost four times greater (140k vs. 36k) for large urban counties.
Major industries vary throughout Pennsylvania across urban and rural environments. Typically, manufacturing jobs are located outside the urban core in less dense areas while a majority of accommodation, food, and healthcare jobs are in cities. In 2020, heath care (14%), manufacturing (14%), accommodation and food (14%), and construction (12%) accounted for more than 50% of all initial claims. Across all three urban-rural groups, construction, health care, and accommodation and food industries were reported to be among the industries with the highest share of claims.
Industries are recovering at different rates and vary by geographic region. In large urban areas, the share of unemployment claims increased from 14% to 21% in health care while it remained at a consistent rate across rural and small urban areas.
Compared to other large urban counties (including Allegheny, Montgomery, and Delaware) Philadelphia experienced a similar trend of unemployment across all industries in 2020. The shares of Philadelphia’s unemployment claims are slightly higher in accommodation and food and health care compared to other large urban areas, but lower in construction.
Philadelphia, Pennsylvania’s largest city, has experienced significant challenges throughout the pandemic as the city has seen surges in coronavirus cases over the course of 2020. The city has been forced to add restrictions, such as closing indoor dining and limiting the size of gatherings. Between March and December 2020, over 250,000 residents filed for unemployment. Key industries in Philadelphia include manufacturing, health care, higher education, food processing, biotech, and tourism. While some of these industries, including higher education and biotech, were minimally impacted by the pandemic in 2020, health care and tourism experienced sizable declines, accounting for one-third (35%) of the city’s unemployment claims.
Some jobs started to return to Pennsylvania in the latter half of 2020 as job postings steadily rose between June and October, outpacing 2019 levels as some businesses sought to rehire employees. Despite this indicator of recovery, Philadelphia was still far behind in reaching similar pre-pandemic employment rates at the close of 2020. Job postings in Philadelphia remained at a consistent level throughout 2020, well behind 2019 levels for the city. Job growth will continue to be a primary sign of economic recovery for Philadelphia and Pennsylvania as a sense of normalcy returns in 2021 and beyond.