Morning Must Reads: October's Job Numbers and Now Is The Time To Fix Stuff!

Late in the day Friday, the Pennsylvania Department of Labor and Industry reported that the state's unemployment rate ticked down slightly to 8.1% (the U.S. rate is 7.9%) and nonfarm payrolls grew by 7,500 jobs. On average over the previous 12 months, nonfarm payrolls in Pennsylvania grew by just over 4,000 jobs a month. In the household survey, the news in October was all good with the number of unemployed declining, employment rising and the labor force growing.

Speaking of labor force growth, some demographers are predicting that the labor force in Pennsylvania should begin to decline as our population continues to age. A declining labor force implies a growing structural budget deficit at the state level as fewer adults participate in the labor market yielding, among other things, less sales and income tax revenue.

Christopher Briem at the University of Pittsburgh notes that Pennsylvania right now is enjoying a surge in the labor force, while some budget projections may be assuming a declining labor force in the short run. This matters because budget projections frame the budget debate by telling state lawmakers how much revenue there is available to allocate to spending priorities. 

Embedded in October's job numbers was more bad news in construction, which shed 1,100 jobs over the month and just over 10,000 jobs since last October. In 2011, public-sector job losses were the primary drag on Pennsylvania's job performance; in 2012, it appears that construction is shaping up to be the state's biggest loser.

Along those lines, a story focused on the fiscal cliff debate in The Wall Street Journal notes a steady drop off in spending on structures in the U.S. economy as a whole.

On Sunday, the editorial board of The Philadelphia Inquirer urged Gov. Corbett and lawmakers to invest in infrastructure.

With private-sector construction demand weak, the cost of borrowing low and a backlog of critical construction investment needs like thousands of structurally-deficient bridges, now remains the most prudent time for the public sector to ramp up spending on infrastructure. 

Gov. Corbett and lawmakers acted to weaken the economy in 2011 through deep cuts in education spending. The next legislative session provides them an unusual opportunity to save taxpayers money and give the economy a boost. Will they act?

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