Lieutenant Governor Repeats Misleading Marcellus Jobs Number

In a statement today, Lieutenant Governor James Cawley repeated widely-circulated figures that risk a misleading impression of job creation in Marcellus Shale industries in Pennsylvania.

As we pointed out in a press release this afternoon, Marcellus industries are creating jobs, but the total since the end of 2007 is less than 10,000 — not 72,000 as many readers of the Lieutenant Governor’s statement will end up believing.

The Lieutenant Governor’s statement specifically states that “the natural gas industry and related businesses generated more than 72,000 new hires in Pennsylvania over the last 18 months alone. These are family-sustaining jobs …” This sentence and the statement as a whole will leave many readers believing that the “new hires” are new jobs. 

Of course, that’s not the case. As we have said before, new hires are not the same as new jobs.

The Pennsylvania Department of Labor and Industry also does a nice job of explaining this in the June edition of its Marcellus Shale Fast Facts (the source for the 72,000 figure): “New hires are linked to job creation, however, an increase in new hires does not directly equate to an increase in the total employment count. The new hires count is simply an indication of hiring activity in an industry.” You still have to take into account employment separations, including layoffs and resignations, the Department notes.

The bottom line is that new hires by themselves tell you nothing about job creation. The latest statistics indicate that “Marcellus Core” industries actually created less than 10,000 jobs since the fourth quarter of 2007; if you add in “Marcellus Ancillary” industries, which lost jobs, all Marcellus-related industries created less than 6,000 jobs.

The “new hires” figure is meaningless in a second sense. Most of the touted new hires are in the “Marcellus Ancillary” industries — broad economic sectors in which the overwhelming majority of jobs have nothing to do with the Marcellus Shale. For example:

  • 18,000 of the new hires are in “engineering services,” which serve every single part of the Pennsylvania economy, from manufacturing to construction to water and sewer infrastructure.
  • More than 12,000 new hires are in “highway, street, and bridge construction.”

Not to mention, between the April and June Marcellus Shale Fast Facts reports published by the Department of Labor and Industry, the number of new hires increased from 48,000 to 72,000 — not because of increased hiring but, as the Fast Facts report notes, because of “the addition of nine industries in the ancillary group and the inclusion of government employment.”

So we’re asking Lieutenant Governor Cawley to issue a short and simple factual clarification on Marcellus job growth in Pennsylvania before the Marcellus Shale Advisory Commission releases a report later this month. This would underscore the Lieutenant Governor’s commitment to presenting information in a fair and balanced way.

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