Tuesday, June 26, 2007

It was 20 25 years ago today

I used to say that it has been 20 years since the worst of the economic decline in the region. Time marches on and it is now 25 years since the roof fell in. Today the state is reporting that the local unemployment rate is 4.2% and total unemployment in the MSA is 48,300.


25 years ago things were not good in Pittsburgh. The unemployment rate had been in double digits all year, and total unemployment had remained over 130K (so just over 2.7 times the current level). But things could have at least appeared stable. The nation was in a recession, and just as in previous recessions, heavy industry would bear the brunt of the downturn. Yet recessions, almost by definition, evetually end and turn back up. By 1982 the layoffs had lasted longer and the expected upturn was not showing itself. It was probably right around now, exactly 25 years ago that is, that even hard core believers realized that the downturn was not part of a cycle. Between May 1982 and the end of the year, unemployment in the region would shoot up from 132K to 212K, over 4 times current levels. Here is the the count of unemployment in the Pittsburgh region in 1982 compared to 2007.





Unemployment in 1982 was probably harder to deal with than today for lots of reasons. Back then, more households here were single earner households. So the jobs lost represented all the income many families relied upon, unlike today where many households have multiple incomes. That peak of 212 thousand did not being to reflect the discouraged workers who had stopped looking for work. It is just a different period altogether.

6 Comments:

Blogger Jerry said...

I wonder about a couple of things:
1. Do you know how the rates compare, as opposed to the raw numbers?
2. Were "discouraged" workers defined the same way in 1982-83 as they are today?

Tuesday, June 26, 2007 10:10:00 AM  
Blogger Jim Russell said...

Can you recommend a good book that could help me better appreciate that time period in Pittsburgh?

Tuesday, June 26, 2007 10:16:00 AM  
Blogger C. Briem said...

Some figures I should update obviously, but the historical timeseries for unemployment rate, and the difference between local and national unemployment rates are here:

http://www.briem.com/PghEcon/PghEcon4.htm
http://www.briem.com/PghEcon/PghEcon5.htm

I don't have a short answer on discouraged workers. Technically the definition of the labor force is the same over that period, but that does not address the harder question of who is a discouraged worker. In a sense there is no official defintion of a discouraged worker and our understanding of what that means has changed. You can be out of the labor force for lots of reasons.. but once you answer the question that you are not looking for work you should pop from the labor force stats.

A good book? I need to think about that. Depends what you want to look at. There are the books on the aftermath more so than the actual transition itself.

Tuesday, June 26, 2007 12:05:00 PM  
Blogger Jim Russell said...

A good book? I need to think about that. Depends what you want to look at. There are the books on the aftermath more so than the actual transition itself.

I'd like to understand better the transition period, particularly in terms of dealing with economic shock and the decision to leave the region.

Tuesday, June 26, 2007 12:58:00 PM  
Anonymous Anonymous said...

Are you able to track gross regional product from, say, the mid-seventies to today? Unemployment can go up with increased efficiencies, as well as decreased economic output.

Wednesday, June 27, 2007 9:17:00 AM  
Blogger C. Briem said...

we have modeled estimates of GRP in the region. It deserves more context to just put it up here. Certainly increasing labor force productivity has been a big factor in manufacturing and has been a big story here. but that in itself is not the story of the early 80's here, though it is a much bigger part of the long term trend in manufacturing employment here and elsewhere.

If interested. I see we put a table of long term regional GRP (labled as "value added) in table 1 of

http://www.briem.com/papers/duisburg.PDF

Wednesday, June 27, 2007 9:43:00 AM  

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