Editorial: Reading the crystal ball of layoffs and low unemployment numbers
Share this post:
Jobs numbers are never a constant.
They shouldn’t be. They can’t be. The number of people who are employed is constantly rising and falling. If nothing else, the numbers will shift because the workers age. New people enter the workforce. Older people retire.
Pennsylvania is a northern state, meaning seasonality is a factor. There is less construction in the winter. Then there are the holidays. There is more retail activity in the last quarter.
All of this impacts how many jobs are out there and how many people there are to do them.
So it should be no surprise that unemployment was down 0.1% in December. Department of Labor and Industry numbers released Friday show a drop that is 1.6% below December 2021, coming in at a historic 3.9%.
“Opportunity abounds today for Pennsylvania workers,” said the department’s acting secretary, Nancy Walker.
That is good news. Anything that points to more people cashing a paycheck is good.
But that news came the same day Google’s parent company, Alphabet Inc., announced 12,000-worker layoffs in its global operations. There is no estimate yet how many of those employees, if any, would be in Pennsylvania.
There are more than 800 Google workers in Pittsburgh, as well as contract workers. The company announced a $15 million Pennsylvania expansion in 2022.
This isn’t the first announcement with impact — overt or potential — on the state’s tech sector. There was Argo AI in October. Facebook parent Meta announced layoffs in November similar to the Alphabet cuts.
It’s a familiar story in an area that was built on steel and manufacturing and a state filled with coal ghost towns.
Walker isn’t wrong that there are opportunities for today’s workers. There are, and Pennsylvania is rich with innovation and entrepreneurism.
But it is also assaulted by inflation, and economists frequently point to the teeter-totter relationship between prices and jobs. As inflation goes up, unemployment drops. When inflation comes down, unemployment rises.
Labor and Industry’s job is to be a cheerleader for business and workers, so Walker’s rosy statements are not unexpected. A record low in joblessness is something to crow about.
However, it has to be looked at as a piece of an overall puzzle. That includes the fact that historically a low point in the unemployment numbers means a high one for inflation.
It also means that changing that probably means more people will be out of work — and the tech numbers could herald that.