Analyzing Manufacturing Employment Decline in Western Pennsylvania

Abstract:

The major trend of declining manufacturing employment in the United States, which began in the 1980s and intensified in the 2000s (Autor et al., 2013; Houseman, 2018; Charles et al., 2019), has not been studied in great detail at the regional level. Manufacturing has historically been a constant and prominent feature of the economy in Western Pennsylvania, particularly with the steel industry and now the pharmaceutical/chemical industry, but little is known about the specific reasons for the recent decline in employment (Dietrich-Ward, 2015). According to data from before the pandemic, manufacturing represented 11.89% of Pennsylvania’s economic output and 9.47% of the workforce in 2018 (National Association of Manufacturers, 2019). This makes it apparent that the sector is still an important component of the state’s economy, but the recent decline in employment raises questions about the sector’s future prospects. This study examines the importance of market changes, automation, demographic shifts, and foreign competition on the number of manufacturing employees in Western Pennsylvania between 2001 and 2021. By testing each of these factors individually, comparing their coefficients, and then examining all factors together using multiple regression analysis, the causes of the decline in manufacturing employment can be better understood, leading to a more informed approach to both business strategy and government policy in Western Pennsylvania.