Some Pa. job sectors inch toward recovery
Wigle Whiskey wants to doubleits staff in the next nine weeks.
After closing its restaurant a year ago and dropping from 185 employees to 85, the distillery in the Strip District posted 99 openings in February. Senior manager Richard Platania said no one was laid off, but some chose not to workduring the pandemic.
“We’re finally hitting a point with COVID that obviously things are starting to look a little better,” he said.
Wigle isn’t alone — some companies want to hire and bring employment back to prepandemic levels. But the virus hasn’t had an equal economic
impact on Pittsburgh’s industries.
Health care bounced back quickly. Construction followed seasonal trends but contributed to much of the region’s job growth in the summer and fall. Financial services employed a few more people in December 2020 than inthe previous year.
The manufacturing, government, business services and trade, transportation and utilities sectors were all within 10 percentage points of pre-pandemic employment levels.
The leisure and hospitality sector — which includes airlines, hotels, arts organizations and restaurants — has a different story. Employment in December was down 34% compared to 2019, with no rebound in sight.
“By mid- to late summer, it was obvious, I think, that we started to see the proverbial K-shaped recovery in the region,” said Jim Futrell, vice president for market research and analysis with the Allegheny Conference on Community Development, which tracks monthly employment data in Pittsburgh.
He was referring to a term economists use to describe a recovery that boosts some industries but brings others down, with the gap often widening as time goes on.
That same alphabet shape has been used to describe the widening wealth gap between those who lost their jobs due to COVID-19 and those who did not.
The leisure and hospitality industry, which employed nearly 120,000 people in prepandemic times, employed only 80,000 in the region as of December. That was a bump fromthe worst months, when it employed 65,000 in May and 52,900 in April.
Since the hospitality sector is normally one of the largest job-creating industries in the region, Mr. Futrell said, straightening out the rest of the economy hinges on its recovery.
“As long as that industry can’t recover to the same extent that the other industries have, it’s really going to be a drag on the economy,” he said.
A stagnant recovery
The Allegheny Conference calls April 2020 the “trough” of the pandemic’s economic impacts. In other words, the worst of the layoffs, furloughs and business closures occurred that month.
For the first few months after that, the economy rebounded quickly — before slowing down again, Mr. Futrell said.
The unemployment rate in Pittsburgh dropped from 16.4% in April to 12.9% in June to 7.9% in September, according to data from the U.S. Bureau of Labor Statistics. From October through December, the most recent data available, it remained between 6% and 7%.
In April, the number of total non-farm jobs in the region fell to about 980,000, down from 1.17 million in March. By December, that number had rebounded to 1.11 million.
“As things reopened in the first couple months, you did see us quickly regain half the jobs that had been lost in [the] February to April period,” Mr. Futrell said. “Since then, it’s just been small chunks that have been coming back.”
Pennsylvania Women Work, a nonprofit workforce development organization, started to see increased demand from job seekers in June. Interest in finding jobs jumped 57% from July through September, director of programs Susan Showalter-Bucher said.
She attributed the surge in part to health and safety restrictions that made it safer to leave the house, as well as the sudden realization some old jobs weren’t coming back.
Now, clients come in and ask where the jobs are.
“We know that still, even with everything going on, there are companies that are looking for employees, but it still is a hidden job market,” Ms. Showalter-Bucher said, referring to the jobs that aren’t posted through traditional avenues.
Temporary measures took a permanent turn
Comparing December 2020 to December 2019, the Pittsburgh region shed 86,300 jobs, according to data from the Allegheny Conference.
The unemployment rate hit 6.6% in December, its first increase since July. Temporary business closures, increased restrictions and seasonal downturns in industries like construction and educational services may have driven the jobless rate higher.
In some cases, the winter months also laid bare the impact of the COVID-19 pandemic lasting longer than most businesses had anticipated.
DoubleTree Pittsburgh in Green Tree laid off 68 people last March. The hotel filed a WARN notice — a mandatory letter informing state officials of mass layoffs — in October after determining those earlier job cuts would need to be extended.
“Initially, these actions were temporary measures,” the company wrote in its letter.
The hidden unemployment rate
The unemployment rate of 6.6% might actually be masking the full extent of the number of people out of work in the region. Lowell Taylor, an economics professor at Carnegie Mellon University, estimates it is probably closer to 10.5%.
“There’s this group of people who are unemployed, don’t have jobs but are looking for jobs,” he said. That’s the 6.6%.
“But then there’s another pretty sizable number who would have been employed under circumstances like last year but are not even looking for a job now.”
That bucket, which Mr. Taylor estimated adds another 4 percentage points to the unemployment rate, covers people who cannot return to work for health and safety reasons or have had to take on additional child care or caregiver responsibilities or because their industry just doesn’t have any jobs for them to look at yet.
To calculate the unemployment rate, Mr. Lowell noted the U.S. Bureau of Labor Statistics does a survey that asks first, “Did you work this week?” If the answer is no, the next question is, “Did you look for work this week?”
In March and April, that was a silly question for just about everyone out of work. What jobs would they be looking at?
Now, it’s a valid question for many industries and workers but not all. For working mothers and fathers who are also in charge of virtual schooling or for servers who don’t have restaurants to return to, that question still doesn’t make sense, Mr. Taylor said.
The upshot
Mr. Futrell from the Allegheny Conference described the leisure and hospitality industry as going through a “depression” in the organization’s December employment report. The rest of the economy, though, was weathering a “recession.”
A recession is generally defined as a period when the nation’s gross domestic product — or the goods and services produced — contracts for at least two quarters. A depression, which also comes with economic decline, is often defined by how long that decline lasts.
That sounds bad, but it means there are some jobs out there.
The automotive, manufacturing, health care and telecommunications industries are looking to hire, said Linda Topoleski, vice president of talent operations and programs with the Allegheny Conference.
Insulation maintenance and repair, which can include anything from working on machines in a manufacturing line to working on equipment in a hospital, has been on a steady upward trend, Ms. Topoleski said. So has software development, information technologies and financial services.
Ms. Showalter-Bucher said Pennsylvania Women Work has had success with openings in social services and banking.
Online postings for jobs at Giant Eagle, Amazon, CVS, FedEx, Deloitte and ThermoFisher Scientific have been increasing, according to data from the state Department of Labor and Industry.
“There is kind of a bit of a silver lining for the economy,” Mr. Taylor from CMU said. “Lots of the normal economic activity has just kept on rolling. … The upshot of all that is that consumption hasn’t dropped all that much overall in the economy.”
Some people have money to spend, he said, and are itching to get back to restaurants, air travel and hotels as soon as it’s safe to do so. The economy “will pick up steam back to its normal pace,” Mr. Taylor predicts.
Salary bumps, home improvement projects
At Excela Health, based in Greensburg, one division turned to social media, driveup job fairs and an extra $2 salary bump to get applicants in the door.
Excela’s program for direct care partners and caregivers — employees who help individuals in their homes with things like housekeeping — is looking to add 15 people to its 90-person team, said Erica Shaffer, vice president for post-acutecare services.
The company wasn’t getting as many resumes as it had expected, so it upped the salary to $15 an hour from $13 “in order to make sure we can fill in any gaps because we want to be able to serve our community,” Ms. Shaffer said.
After a dip in interest at the start of the pandemic when people were worried about opening their doors to others, the demand for direct care partners soared as people turned to them as an alternative to the hospital.
Following a “handful” of layoffs that didn’t last, Excela now wants to add 300 full-time employees to its 4,300-person operation.
Executives at 84 Lumber, a building materials supply company based in Washington County, initially took stock of all the unknowns that could determine its business in 2020. By May, it was clear the pandemic was really going to help business.
A combination of stimulus payments, the ability to defer things like student loan payments and the amount of time people were spending at home led to more interest in construction and home improvement projects, chief information officer Paul Yater said.
Now, the company is looking to fill about 25 positions in Pittsburghand 500 nationally.
“We haven’t seen the slowdown we would typically see in a normal year,” Mr. Yater said. “For what our crystal ball is worth, it still looks good.”