aHT392

AS3

. States

Department of

Agriculture

Economic

Research

Service

Rural

Development

Research Report

Number 57

The Mid-Atlantic

Region in Transition:

Employment Trends, 1974-84„

Theodore E. Fuller

-X) ,.,. :3

^3>
THE MID-ATLANTIC REGION IN TRANSITION: EMPLOYMENT TRENDS, 1974-84. By

Theodore E. Fuller. U.S. Department of Agriculture, Economic Research Service, Agriculture

and Rural Economics Division, Rural Development Research Report No. 57.

Abstract

The Mid-Atlantic region's total employment growth stayed below national averages from

1974 to 1984 because of its higher share of slow-growth manufacturing industries and its

lagging employment growth in all major economic sectors. After leading the region's employment growth in 1974, nonmetro areas saw employment decline by 1984 while metro employment growth continued. Nonmetro areas dependent on mining and manufacturing and metro

areas in the region's interior fared worse than metro areas in the New York City-to-Philadelphia corridor oriented to such fast-growth industries as services, finance, insurance, and

real estate. This study measures the extent of the Mid-Atlantic's economic lag and pinpoints

lagging areas of the region (NJ, NY, and PA) to help its governments document its competitive

economic positions relative to other regions.

Keywords: Region, metro, nonmetro, employment, public policy, manufacturing.

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Washington, D.C. 20005-4788 April 1986
Contents

Summary :.. , v

Introduction „ i

Employment Change: Regional and National Trends 2

The Location of Change ,.,.. 2

Industry Mix and Change 2

Focus on Manufacturing 3

Employment Change: Metro and Nonmetro Trends 4

The Location of Change 4

Industry Mix and Change 8

Unemployment ., , 9

Implications 10

References 12

Appendix 13

IV
Summary

The Mid-Atlantic region's total employment growth stayed below national averages from

1974 to 1984 because of its higher share of slow-growth manufacturing industries and its

slow employment growth in all major economic sectors. Nonmetro areas led regional

employment growth in 1974, butin 1984 these areas saw employment decline while metro

employment growth continued. Nonmetro areas dependent on mining and manufacturing

and metro areas in the region's interior fared worse than metro areas in the New York

City-to-Philadetphia corridor oriented to such fast-growth industries as services, finance,

insurance, and real estate.

A comparison of the Mid-Atlantic region (New York, New Jersey, and Pennsylvania) with

the Nation from 1974 to 1984 reveals the following trends:

• The Mid-Atlantic trailed its neighbor, New England, and the Nation in rate of employment

growth between 1974-79 and 1979-84. Within the region, New Jersey had the strongest

employment growth from 1979 to 1984. New York was nearly static between 1974-79,

but rebounded during 1979-84. Pennsylvania's slow growth from 1974-79 stopped in

1979-84, and its economy began to decline.

• The region had an above-average share of employment in the national fast-growth

sectors (services, finance, insurance, and real estate), and employment growth rates

in those sectors were near the national average.

• The region had a slightly larger than average share of total employment in manufacturing

in 1974, but slightly less by 1984. The region lost manufacturing employment at about

the same rate as the rest of the Nation going into the 1975 and 1982 recessions, but

failed to match the Nation's recoveries. The region seemed to lose more of its

competitive edge with each recession.

• The region's decline in manufacturing employment from 1974-84 occurred in nearly all

the major manufacturing industries and in most of the States for each industry.

A comparison of metro and nonmetro areas within the Mid-Atlantic region from 1974 to

1984 reveals the following trends:

• The rural-to-urban turnaround of the 1970s appeared to be reversing itself in the early

1980s. Although nonmetro areas led metro areas in employment growth rates between

1974-79, employment declined in nonmetro areas from 1979-84 while metro areas

continued to grow (although at a slower rate).

• This reversal in employment growth rates from nonmetro to metro advantage pushed

average nonmetro unemployment rates (8.4 percent in 1984) above rates in metro

areas (7.1 percent in 1984).

• Employment growth among metro areas shifted from smaller metro areas of interior

Pennsylvania and New York to the urban corridor extending from New York City to

Philadelphia.

• Employment growth among nonmetro areas shifted from central and western

Pennsylvania and New York to eastern and northern New York.

• The shifts in both metro and nonmetro areas appeared related to faster growth areas'

orientation to national fast-growth industries and slower growth or declining areas'

dependence on manufacturing.
The Mid-Atlantic Region in Transition

Employment Trends, 1974-84

Theodore E. Fuller*

Introduction

The Mid-Atlantic region did not keep pace with either its

neighbor, New England, or the Nation in rate of growth in total

employment in the late 1970s or early 1980s. This was a

continuation of the region's slow-growth in the 1960s and early

1970s (2).^ The region, which includes New York, New Jersey,

and Pennsylvania, has been among the least dynamic in the

Nation in the last two decades.

Slow employment growth is not necessarily undesirable. Slow

growth is preferable to decline, and it has certain advantages

over the growing pains that can accompany rapid development.

However, persistently slow growth in a region as economically

important to the Nation as the Mid-Atlantic does raise concern.

Growth seldom occurs at a constant pace among industries or

areas. Soft spots often arise in the form of declining or

slow-growth industries which affect the specific local areas

where they are concentrated.

This report appraises recent industry and area employment

trends in the Mid-Atlantic States. Recent trends in total

employment and employment in major sectors and industries

in the Mid-Atlantic region are compared with national trends.

Also, employment changes among metro and nonmetro areas

within the region are assessed. Industry structure and

performance are related to the incidence of metro and

nonmetro areas experiencing fast growth (above average),

slow growth (below average), or declining employment. This

focus on metro-nonmetro trends explores whether the

"rural-urban population and employment turnaround" of the

1970s is continuing or reversing itself.

To assess employment trends in the region, two aspects of a

regional or local area economy which typically affect the

geography of employment change are analyzed: industry mix

and the employment growth rates of major industries. Industry

mix refers to the distribution of employment among major

economic sectors or industries in an area or region. Sectors

and industries are grouped by national growth performance:

fast-growth, slow-growth, or declining. This grouping by

national growth performance permits assessment of whether

a region's economic structure is weighted to or away from the

growth elements in the national economy. The mix of sectors

or industries in the region is compared with the mix in the

Nation; and the mix in metro areas is compared with that in

nonmetro areas.

*The author recently retired as an economist with the Agriculture

and Rural Economics Division, Economic Research Service, U.S.

Department of Agriculture, stationed at the Pennsylvania State

University.

^ Italicized numbers in parentheses refer to items in the References

section.

The Study Area and Time

The Mid-Atlantic region, comprised of New

York, New Jersey, and Pennsylvania, is

divided into metro and nonmetro areas to

analyze the location of change. Metro areas

consist of one or more counties with a central

place or urban core of 50,000 or over and a

total area population of 100,000 or over.

They are subdivided into primary metropolitan statistical areas (PMSA) or metropolitan

statistical areas (MSA) by the U.S. Office of

Management and Budget. Nonmetro areas

include all the nonmetropolitan counties in

New York and Pennsylvania. New Jersey

does not have any nonmetro areas as of the

1983 U.S. Office of Management and

Budget definition.

The analysis spans two 5-year periods,

1974-79 and 1979-84. To use as recent data

as practicable, employment figures are for

September of the beginning and ending

years of each period. All employment data,

national. State, and area, in the report are

from the establishment data sampling

program of the Bureau of Labor Statistics,

U.S. Department of Labor, in which all States

cooperate. State and area data were

secured directly from the Labor Departments

of the three States of the region.

The two time periods were selected to

approximate secular rather than cyclical

trends and to compare secular trends in the

late 1970s with the early 1980s. The

1974-79 period should reflect secular trends

since the national economy was near

full-employment in both years. Data for

1979-84 should also approximate a secular

trend, because by September 1984 the

Nation was 22 months out of the 1982

recession.
Theodore E. Fuller

Employment Change:

Regional and National Trends

The Mid-Atlantic is a subregion of the Northeast. Total

nonagricultural employmentgrew more slowly in the Northeast

in both the late 1970s and the early 1980s than in the Nation

as a whole (fig. 1 ). The Northeast also lagged the three other

major sections of the Nation in both percentage change and

absolute net change in jobs from 1974-79. Between 1979-84,

the Northeast grew more slowly than the South and West, but

outperformed the industrial heartland of the North Central

region where employment declined.

Figure 1

Northeast employment growth lags Nation,

1974-79 to 1979-84...

Percent change

30

20

10

-10

United

States

Northeast North

Central

South West

...Because Mid-Atlantic employment rates

stay below national average

Percent change

20

10 -

-10

New

England

Mid- New New Pennsylvania

Atlantic York Jersey

Source: (8)

The Location of Change

Northeast employment rates were mixed in the late 1970s and

early 1980s as the area's two subregions, the Mid-Atlantic

Statesand New England, had contrasting records. Mid-Atlantic

employment growth rates were below the national average

from 1974-79 and 1979-84, while New England exceeded the

Mid-Atiantic in each time span and also the Nation between

1979-84 (fig. 1). The disparity between the two subregions

continued a pattern evident in the 1960s and early 1970s (2,

4). New England has continually exceeded the Mid-Atlantic

region in rate of employment growth over the long term.

Employment changes also varied among the three States of

the Mid-Atlantic region. Total employment in New York was

nearly static between 1974-79, but grew at nearnational rates

between 1979-84. New Jersey outperformed New York and

Pennsylvania in both timespans and the Nation in the early

1980s. Pennsylvania lagged ttie Nation in the late 1970s and

had declining employment in the early 1980s.

Figure 2 highlights the relative performance of the three States

in the national economy by comparing employment growth

rates in ail States. Between 1974 and 1979, an area of slow

growth stretched across the old industrial belt from southern

New England to the Midwest. By 1979-84 this belt of slow

growth and declining employment had receded from New

England, but expanded from the Mid-Atlantic States through

the Midwest to include a good share of the interior of the Nation

and even the northern Pacific States. The fast-growth States,

in contrast, ringed the Nation's coastal and southwestern

perimeter from Maine to California. New Jersey was ttie only

Mid-Atlantic State included in this growth ring.

The annual trends in total employment of the three Mid-Atlantic

States from 1974 to 1984 indicate distinct individual performances (fig. 3). The employment decline in Pennsylvania since

1979 is noteworthy, as is the generally upward and near

national-average rate of employment gain by New Jersey with

its peripheral coastal location between two large urban centers.

industry Mix and Change

Nearly all major economic sectors expanded tess rapidly or

declined faster in the Mid-Atlantic region than in the Nation

between 1974-79 and 1979-84 (table 1). The Mid-Atlantic

trailed the Nation in fast-growth sectors such as services and

trade. In manufacturing (a slow-growth sector nationally from

1974-79 and one of slow decline from 1979-84), the region

had declining employment in both time periods.

The Mid-Atlantic's employment growth rate in national

fast-growth industries like finance, insurance, and real estate

(FIRE), and trade and services met or exceeded the Nation's

from 1979-84, suggesting that this region's mix of industry gave
The Mid-Atlantic Region in Transition

it some advantage. Throughout the period, this region also had

a higher proportion of its employment in these fast-growth

industries than did the Nation (table 2), and this proportion

increased slightly between 1974 and 1984. If these sectors

continue to be fast growing, the region should be in a somewhat

better competitive position now than it was a decade ago.

Manufacturing performance was volatile at both national and

regional levels in the 1975 and 1982 recessions (table 3). Both

national and regional manufacturing declined nearly 10 percent

or more from peak to trough in each recession. The Mid-Atlantic

region never recovered as fully as the Nation in either recession

recovery. With each recession the region seemed to lose more

of its competitive position. However, Mid-Atlantic nonmanufacturing employment fluctuations closely paralleled the Nation

both from peaks to troughs and in the subsequent recoveries,

especially in New Jersey.

Focus on Manufacturing

Manufacturing merits additional assessment because of its

prominent role in the Mid-Atlantic economy and its poor

performance in cyclical recoveries. Between 1974-84,

employment trends varied considerably among States within

the region. Although New Jersey had the strongest performance followed by New York, both trailed the Nation (fig. 4).

Pennsylvania lagged the other two States, especially from

1979-84.

Nearly all industries within the slow-growing manufacturing

sector shared in the region's troubles. All major manufacturing

industries in the Mid-Atlantic, except lumber products from

1974-79, either grew less rapidly or declined fasterthan in the

Nation in both 1974-79 and 1979-84 (table 4). This was true

regardless of whether the industries were fast-growth,

slow-growth, or declining nationally.

The regional record in the nationally fast-growth and partially

high-technology oriented instruments and electric equipment

industries was particularly unimpressive. Instruments and

related products had percentage changes of 3.0 and -4.3 in

the region for the 1974-79 and 1979-84 periods, compared

with 15.9 and 4.7 percent, respectively, in the Nation. The

comparable figures for the electric and electronic equipment

industry were -6.0 and -7.1 percent, respectively, in the

region compared with 8.3 and 6.6 percent nationally. In

nationally declining industries, the rates of employment loss

were often much higher in the region than the Nation. A strong

competitive position for the region was not apparent in either

national fast-growth, slow-growth, or declining industries.

Table 1 —Employment change by major economic sector, Mid-Atlantic region and the United States, 1974-79 and 1979-84^

Mid-Atlantic region Percentage change in1 employment

Economic sectors

by national

growth performance^ Employment

1974

Change in

number employed

1974-79 1979-84

1974-79 1979-84

United States Mid-Atlantic United States Mid-Atlantic

2,709.5

925.8

2,941.5

-Thousand-——

505.6

76.1

228.5

570.0

139.4

185.6

21.1

13.8

8.9

Fast-growth 1974-79

and 1979-84:

Services

Finance, insurance, and

real estate (FIRE)

Wholesale and retail trade

27.6

20.5

18.3

18.7

8.2

7.8

17.7

13.9

5.9

Fast-growth 1974-79,

slow-growth 1979-84:

Mining 54.8 5.7 -10.6 36.3 10.4 4.5 -16.5

Slow-growth 1974-79

and 1979-84:

Government

Transportation and

public utilities (TPU)

2,350.6

907.5

110.0

.4

-23.4

-33.7

11.9

9.8

4.7

0

.2

.8

-1.0

-3.7

Slow-growth 1974-79,

decline 1979-84:

Construction

Manufacturing

614.3

3,897.3

-32.1

-180.4

5.7

-524.7

14.0

4.2

-5.2

-4.6

-2.4

-6.4

1.0

-14.1

All sectors 14,401.4 713.8 308.2 14,6 5.0 5.3 2.1

^All data are for September of the year. ^Sectors grouped as above or below national average for total emptoyment. Source: (7, 8, 5)
Theodore E. Fuller

The region's below-average performance in major manufacturing industries also typified all or most of the States within the

region. Between 1974-79 all three States had rates of change

below the national rate in 10 of the 20 manufacturing industries.

The number increased to 12 from 1979-84.

The region's performance in the various manufacturing

industries was mixed from 1974-84. In 1974, the Mid-Atlantic

region had a higher proportion of employment in national

fast-growth industries than did the Nation. Even with a poorer

showing in growth rates, the region maintained this edge in

industry-mix through 1984. By 1984, the proportion of

manufacturing employment in national fast-growth industries

had shifted from 25.4 to 29.7 percent for the region versus

21.5 to 26.2 percent for the Nation (table 5). This was due

mainly to large national declines in slow-growth or declining

employment industries. All major manufacturing industries in

the Mid-Atlantic region declined between 1979-84 except

printing and publishing (table 5). Heavy absolute losses were

sustained in primary metals, apparel, nonelectrical machinery,

and fabricated metals from 1974-84.

Employment Change:

Metro and Nonmetro Trends

Slow-growth was the overall trend of employment in the

Mid-Atlantic region relative to the Nation from 1974-84 and

characterized most major economic sectors and the main

manufacturing industries. Nationally, nonmetro areas in the

1970s typically had higher rates of employment growth than

metro areas (3). This pattern, a reversal of earlier trends when

metro areas typically out-performed nonmetro areas, became

known as the "rural-urban turnaround." It occurred in the

Mid-Atlantic region as well as in many other parts of the Nation.

Recently, however, there is some evidence that the rural-urban

turnaround of the 1970s may be slowing if not reverting to the

previous pattern of metro dominance in rate of employment

growth(7,6). Employment in nonmetro areas grew at a faster

rate than in metro areas in the late 1970s, but declined in the

early 1980s while growing slowly in metro areas. Total metro

employment expanded by 4.5 and 2.6 percent in 1974-79 and

1979-84, respectively (table 6). In nonmetro areas, the

comparable rates were 7.7 and -5.2 percent.

The Location of Change

Rates of employment change shifted to the advantage of metro

areas from the late 1970s to early 1980s and varied considerably among metro and nonmetro areas. In 1974-79, upstate

metro areas in New York and in the interior areas of

Pennsylvania typically had higher growth rates than areas in

the New York City-to-Philadelphia complex (table 7). During

1979-84, the New York City-New Jersey-Philadelphia area

became the focus of expansion-especially the suburban areas

adjacent to and between New York City and Philadelphia.

Conversely, the interior areas of the region typically either

experienced very slow growth such as those in upstate New

York, or declines in employment as did most metro areas in

Pennsylvania outside of the Philadelphia MSA (fig. 5).

The shift in location of the highest metro growth rates from

1974-79 to 1979-84 appears to be related to area variations

in industry mix within manufacturing, and differences in

dependence on manufacturing versus the fast-growth sectors

of trade, FIRE, and services. From 1974-79, nearly all metro

areas had declines in manufacturing employment but rates of

Figure 2

Slow employment growth stretches from

New England to Midwest In late 1970s...

...By early 1980s, New England escapes

but most MId-AtlantIc States remain in

slow-growth area

I

Fast growth (above United States)

Slow growth (below United States)

Decline

Source' (8)
The Mid-Atlantic Region in Transition

Table 2—Percentage of total employment by major sector, Mid-Atlantic region and the United States, 1974 and 1984^

Percentage of total employment

national growth performance September 1974 September 1984

United States Mid-Atlantic United States Mid-Atlantic

Percent

Fast-growth 1974-79 and 1979-84:

Services

Finance, insurance, and real estate (FIRE)

Wholesale and retail trade

17.2

5.3

21.7

18.8

6.4

20.4

22.0

6.0

23.1

24.5

7.4

21.8

Subtotal 44.2 45.6 51.1 53.7

Fast-growth 1974-79, slow-growth 1979-84:

Mining .9 .4 1.1 .3

Slow-growth 1974-79 and 1979-84:

Government

Transportation and public utilities (TPU)

17.8

6.0

16.3

6.3

16.5

5.5

15.8

5.7

Subtotal 23.8 22.6 22.0 21.5

Slow-growth 1974-79, decline 1979-84:

Construction

Manufacturing

5.3

25.8

4.3

27.1

4.9

20.9

3.8

20.7

Subtotal 31.1 31.4 25.8 24.5

All sectors 100.0 100.0 100.0 100.0

^All data are for September of the year. Source: (7, 8, 5)

Table 3—Percentage change in manufacturing and nonmanufacturing employment between business cycle peaks and

troughs 1973-84, Mid-Atlantic region and the United States^

Percentage change in employment^

Area November 1973 March 1975 January 1980 November 1982

to to to to

March 1975 January 1980 November 1982 September 1984

P-T T-^P P-T T-(?)

Total employment:

Mrd-Atlantic region—

New York

New Jersey

Pennsylvania

Rest of United States

Manufacturing employment:

Mid-Atlantic region—

New York

New Jersey

Pennsylvania

Restof United States

Nonmanufacturing employment:

Mid-Atlantic region—

New York

New Jersey

Pennsylvania

Rest of United States

-5.9

-5.3

-4.2

-3.3

-13.7

-11.7

-10.8

12.6

-3.5

-2.6

-1.0

Percent

.1

4.5

12.6

7.8

22.2

2.5

4.7

1.7

15.1

5.0

15.7

10.4

24.4

^The minor downturn with a trough in July 1982 and a peak in July 1981 is omitted.

^P = peak of business cycle and T = trough. Source: (7,8,5)

3.0 2.6

3.7 6.5

-3.9 2.5

-1.5 6.6

-9.2 .7

-8.8 4.2

-18.8 .5

-10.1 9.4

6.1 3.0

8.1 7.2

1.9 2.5

.9 5.8
Theodore E. Fuller

Figure 3

New Jersey leads employinent growth

index, 1973-84*

Percent of 1974

130

120

110

100

90

New Jersey

United States

New Yorl<

I ' ' \ [ L

Pennsylvania

J L

Figure 4

Index reveals poor performance of

Mid-Atlantic manufacturing sector*

Percent of 1974

110

1973 1975 1977 1979 1981 1983

Total nonagrlcultural employmeni.

100

90 -

80

70

United States

New Jersey

Pennsylvania >A*^-^mll,„„^^^^^^'^

New York

I I \ \ \ L_J L

1973 1975 1977 1979 1981 1983

• Manufacturing employment. Source: (5.7.8).

Table 4—Percentage change in employment in major manufacturing industries, Mid-Atlantic region and the United States,

1974-79 and 1979-84^

Industries grouped

by national

growth performance^

Percentage change in employment Mid-Atlanti

with rates c

below U.S.

c States

1974-79 1979-84

M L#l lal lyc

average

SIC United States Mid-Atlantic United States Mid-Atlantic 1974-79 1979-84

Qtota

Fast-growth 1974-79. growth 1979-84:

Instruments and related products

Printing and publishing

Rubber and miscellaneous plastic products

Electric and electronic equipment

38

27

30

36

15.9

11.2

10.0

8.3

3.0

11.1

7.3

-6.0

4.7

4.3

3.5

6.6

-4.3

3.0

-8.4

-7.1

NY,NJ

NY, PA

NY, PA

All

All

Alt

All

All

Fast-growth 1974-79, decline 1979-84:

Machinery, except electrical

Lumber and wood products

Petroleum and coal products

Transportation equipment

35

24

29

37

13.1

9.9

7.4

7.1

- .8

10.7

-3.1

5.1

-10.8

-7.0

-11.8

-5.6

-16.2

-7.3

-19.3

-24.2

All

NY, PA

All

NY.NJ

All

NY, PA

NY, PA

All

Slow-growth 1974-79. decline 1979-84:

Fabricated metal products

Chemicais and allied products

Furniture and fixtures

Food and kindred products

Stone, clay, and g ass products

34

28

25

20

32

4.0

3.2

.9

.7

.3

-3.9

.7

-11.7

-6.7

-8.3

-12.6

-4.1

-2.3

-6.0

-13.6

-19.3

-8.5

-2.4

-9.5

-23.3

All

NY.NJ

All

All

All

All

All

NY

NY. PA

All

Decline 1974-79 and 1979-84:

Paper and allied products

Miscellaneous manufactures

Primary metal industries

Apparel

Textile mill products

Leather and leather products

Tobacco products

26

39

33

23

22

31

21

-.2

-2.3

-3.3

-5.3

-8.6

-8.6

-9.8

-1.9

-9.0

-11.9

-11.0

-23.7

-12.8

-27.5

-3.5

-12.8

-30.8

-7.5

-14.4

-18.4

-6.3

-9.9

-19.4

-38.7

-13.4

-20.5

-22.8

-22.7

NY.NJ

NY, PA

All

All

All

Alt

PA

All

NY. PA

NY. PA

NY, PA

All

Ali

NY, PA

All manufacturing industries — 4,2 -6.4 -4.6 -14.7 All All

-- = Not applicable. ^ All data are for September of the year. ^Industries are grouped as above or below national average for all manufacturing.

Source: (5, 7)
The Mid-Atlantic Region in Transition

decline did not vary greatly among areas (table 8). From

1979-84, the dependence on basic steel and fabricated metals

industries in Buffalo, Pittsburgh, and other western areas of

the region caused considerably higher rates of manufacturing

decline than in the eastern metro areas. A somewhat greater

orientation of interior areas to manufacturing probably also

contributed. The New York City-New Jersey-Philadelphia

group of metro areas had the smallest proportion of employment in manufacturing and the greatest proportion in services,

FIRE, and trade and led the way in growth of total employment.

The New York-to-Philadelphia metro areas also had the

highest rates of growth in the national fast-growth industries.

The location of employment growth also shifted among

nonmetro areas. From 1974-79, employment in most nonmetro

areas grew; however, growth rates were generally higher in

Pennsylvania than in New York (table 7). By 1979-84,

employment in most areas in Pennsylvania had declined 5 to

10 percent or more (fig. 6). Nonmetro areas in western and

central New York State declined modestly, while areas in the

eastern and northern parts of the State had slow growth in

employment. The stronger performance of the eastern and

northern nonmetro areas in New York may be due to their

greater orientation to the trades and services and lesser

emphasis on manufacturing than the nonmetro areas in central

and western New York and Pennsylvania.

As with metro areas, the shifts in location of nonmetro growth

areas from the late 1970s to early 1980s appeared related

both to differences in rates of employment change in

Table 5—Employment change and distribution of employment among major manufacturing industries,

Mid-Atlantic region and the United States, 1974-84^

Mid-Atlantic Region

industries grouped

by national

growth performance

SIC

Employment

1974

Change in

employment

Percent of total

manufacturing employment

1974 1984

1974-79 1979-84 United States Mid-Atlantic United States Mid-Atlantic

All manufacturing industries 3,897.2 -180.2 -524.4

Fast-growth 1974-79 and 1979-84:

-Thousand——

Instruments and related products 38 199.7 5.9 8.8 2.9 5.1

Printing and publishing 27 271.1 11.6 8.5 5.4 7.0

Rubber and miscellaneous

plastic products 30 1070 7.8 -9.7 3.5 2.7

Etectric and electronic equipment 36 410.0 -24.8 -27.4 9.7 10.6

Subtotal — 987.8 .5 -37.4 21.5 25.4

Fastgrowth 1974-79, decline 1979-84:

Machinery, except electrical 35 394.7 -3.0 -63.3 10.9 10.1

Lumber and wood products 24 42.2 4.7 -3.4 3.5 1.1

Petroleum and coal products 29 38.6 -1.2 -7.2 1.0 .9

Transportation equipment 37 181.0 9.3 -46.1 9.5 4.6

Subtotal — 656.5 9.8 -120.0 24.9 16.8

Slow-growth 1974-79, decline 1979-84:

Fabricated metal products 34 279.5 -10.9 -52.2 8.1 7.2

Chemicals and allied products 28 264.5 1.8 -22.7 5.3 6.8

Furniture and fixtures 25 61.6 -7.2 -1.3 2.4 1.6

Food and kindred products 20 269.2 -18.0 -23.9 9.0 6.9

Stone, clay, and glass products 32 155.3 -12.9 -33.1 3.5 4.0

Subtotal — 1,030.1 -47.2 -133.2 28.3 26.5

Decline 1974-79 and 1979-84:

Paper and allied products 26 134.1 -2.5 -12.9 3.5 3.4

Miscellaneous manufactures 39 134.4 -12.1 -23.7 2.3 3.4

Primary metal industries 33 328.8 -39.1 -112.1 6.4 8.4

Apparel 23 414.7 -45.8 -49.5 6.7 10.7

Textile mill products 22 139.8 -33.2 -21.8 4.7 3.6

Leather and leather products 31 61.9 -7.9 -12.3 1.3 1.6

Tobacco products 21 9.1 -2.5 -1.5 .4 .2

Subtotal — ^,???.Q -143.1 -233.8 25.3 31.3

100.0

'Percent100.0

3.7 6.2

6.9 9.1

4.2 3.3

11.4 11.1

26.2 29.7

11.2 10.3

3.7 1.4

.9 .9

9.9 4.5

25.7 17.1

7.6 6.8

5.3 7.6

2.4 1.7

8.7 7.1

3.1 3.4

27.1 26.6

3.4 3.7

2.0 3.1

4.4 5.6

6.0 10.0

3.8 2.7

1.0 1.3

.2 .2

21.0 26.6

100.2 100.0

— = Not applicable. Mil data are for September of the year.

Source: (5, 7)
Theodore E. Fuller

manufacturing and to dependence of local areas on manufacturing. Declines in manufacturing employment in nonmetro

areas in Pennsylvania and western and central New York

ranged from 15 to 30 percent. These areas also had higher

proportions of employment in manufacturing than either the

other nonmetro areas or the coastal metro areas. This relative

dependence on manufacturing may continue to adversely

affect near term growth of these nonmetro areas if manufacturing remains a national slow-growth sector.

Industry Mix and Change

The growth rates of the major economic sectors mirrored total

employment trends in both metro and nonmetro areas from

1974-84. From 1974-79, nonmetro areas had higher growth

rates (or lesser declines) than metro areas in all major sectors

except services (table 6). From 1979-84, nonmetro areas

lagged metro areas in all sectors. This suggests that growth

rate advantage shifted from nonmetro to metro areas between

the two periods.

Growth rates for both metro and nonmetro areas were below

the national average in all sectors in the early 1980s and in

most sectors in the late 1970s.

Table 6—Percentage change in employment by metro and

nonmetro areas, Mid-Atlantic region, 1974-79 and 1979-84^

Economic sectors Percentage change in employment

by national Metro Nonmetro

1974-79 1979-84 974-79 1979-84

Percent

Fast-growth 1974-79 and

1979-84:

Services 18.6 18.0 14.9 11.8

Finance, insurance, and

real estate 8.2 14.4 11.1 3.3

Wholesale and retail trade 6.9 6.8 15.3 11.1

Fast-growth 1974-79,

slow growth 1979-84:

Mining 9.7 -30.9 39.6 -17.0

Slow-growth 1974-79 and

1979-84:

Government 3.5 -.7 13.2 -2.8

Transportation and

public utilities -.3 -3.7 .4 -6.9

Slow-growth 1974-79,

decline 1979-84;

Construction -6.9 3.1 1.0 -25.2

Manufacturing -4.8 -14.2 -3.1 -18.3

Total employment 4.5 2.6 7.7 -5.2

Metro areas had the most favorable industry mix through the

entire decade. From 1974 to 1984 for example, metro area

employment in the national fast-growth sectors of services,

FIRE, and trade increased from 46.3 percent to 54.5 percent

(table 9). Nonmetro areas started the decade with 36.4 percent

of total employment in these sectors and finished with 43.6

percent.

Manufacturing, which declined in both metro and nonmetro

areas in the late 1970s and early 1980s, became a less

important source of employment throughout the region. In

metro areas, manufacturing employment dropped from first

Figure 5

Highest metro employment growth moves

from Mid-Atlantic interior, 1974-79...

...To coastal areas, 1979-84

^All data are September of the year.

Source: (5)

i

Fast growth (above United States)

Slow growth (below United States)

Decline (-0.1% to -4.9%)

Decline (-5% to -9.9%)

Decline (-10% and over)

Source: (5)

8
The Mid-Atlantic Region in Transition

place in 1974 to third place in 1984 behind services and trade

(table 9). In nonmetro areas, manufacturing remained the chief

employer throughout the decade.

The relative performance of metro to nonmetro areas in fastgrowth, slow-growth, or declining sectors is evidenced in

absolute job changes. In the national fast-growth sectors,

metro areas had substantial gains between 1974-79 and

1979-84. Gains from 1979-84 exceeded those from 1974-79

(table 10). In nonmetro areas, absolute gains in fast-growth

sectors fell off sharply between 1979-84, and failed by a wide

margin to offset losses in manufacturing. Possibly the losses

Figure 6

Employment grows in most Mid-Atlantic

nonmetro areas, 1974-79...

...Declines or slows, 1979-84

Fast growth (above United States)

Slow growth (below United States)

Decline (-01% to -4.9%)

Decline (-5% to -9.9%)

Decline (-10% and over)

in manufacturing (an export activity at the local area level) had

a reverse multiplier effect on trade, services, and other

industries which often depend on local consumer income in

nonmetro areas.

Unemployment

Unemployment rates reflected the variations in rates of

employment change between the region and the Nation, and

among metro and nonmetro areas within the region. In 1974,

the region and the Nation and metro and nonmetro areas each

had unemployment rates between 5.5 and 6 percent (table

11). By 1984, the regional rate was still close to the national

rate at 7.1 percent. However, New York and New Jersey, with

their near or above national average growth performance, had

unemployment rates below the Nation's. Pennsylvania's

declining employment from 1979-84 pushed its unemployment

rate well above the Nation to 8.7 percent.

Table 7—Percentage change in total employment for

groups of metro and nonmetro areas, Mid-Atlantic region,

1974-79 and 1979-84^

Percentage change

Area^ in employment

1974-79 1979-84

Percent

Metro areas:

New York-New Jersey-Pennsylvania 3.9 5.9

New York City (8 counties) -1.8 4.2

Suburban New York MSAs 11.9 11.8

New Jersey (except Philadelphia MSA) 8.0 8.1

Philadelphia MSA 5.8 2.5

Upstate New York MSAs 4.0 -1.5

Buffalo-Niagara Falls 1.4 -9.6

Other upstate MSAs 5.0 1.6

Pennsylvania MSAs (except Philadelphia) 7.2 -6.2

Southeast MSAs 8.4 -.3

Central MSAs 5.7 -4.2

Western MSAs 6.9 -11.4

Pittsburgh 7.3 -11.2

Other western MSAs 5.0 -12.3

Nonmetro areas :^

New York State 6.0 -.7

Eastern 7.1 5.0

Central 4.5 -1.2

Western 3.6 -5.6

Northern 9.4 .6

Pennsylvania 9.4 -9.3

Eastern 6.9 -7.0

Northern tier 6.5 -9.6

Central 9.5 -6.1

Western 11.6 -11.8

Source: (5)

^All data are for September of the year.

^Both metro and nonmetro areas were grouped by geographic

location in the States of the region. Areas in groups are listed

in Appendix.

^As of the 1983 OMB definition, there are no nonmetro areas in

New Jersey.
Theodore E. Fuller

Changes in the unemployment rates reflected the reversal of

growth performance between metro and nonmetro areasfrom

1974-79 to 1979-84. Nonmetro areas had an unemployment

rate below metro areas in 1974. Even with superior employment

performance from 1974-79, the nonmetro ratejust equaled the

metro rate of 7.0 percent. With declining employment from

1979-84, the unemployment rate in nonmetro areas rose to

8.4 percent compared with 7.1 percent in the Mid-Atlantic metro

areas.

Implications

Two aspects of recent employment change inthe Mid-Atlantic

region are especially significant First, the entire region

experienced a slow rate of employment growth relative to the

Nation from 1974 to 1984. Second, the geographic incidence

of employment change within the region was uneven.

Employment expanded at a faster rate in nonmetro than metro

areas from 1974-79, but declined in nonmetro areas from

1979-84 while continuing to grow slowly in metro areas

cotlectjvely. Rates of change also varied considerably among

metro and nonmetro areas, especially in the early 1980's. From

1979-84, metro areas in the New York City-to-Philadelphia

corridor averaged above the nationai growth rate in total

employment, while metro areas in central and western

Pennsylvania typically experienced declining employment. In

the same period, nonmetro areas in eastern and northern New

York grew slowly while most in western New York and

Pennsylvania declined.

Why the variations in growth performance between the region

and the Nation and among areas within the region over the

past decade? Part of the answer appears related to geographic

differences in the mix of employment among major^economic

sectors and the mix of specific industries witbin sectors. The

answer is also related to area variations in growth rates of

economic sectors and industries.

Evidence suggests that although tbe Mid-Atlantic region had

about the same proportions of employment in nationally

Table 8—Selected measures of change in manufactünng and national fast^growth sectors for

groups of metro and nonmetro areas, Mid-Atlantic region, 1874-79 and 1979-84^

Fast-growth sectors

Manufacturing (trade, FIRE, and sen/ices)

Area Percent of Percent of

Percentage change total Percentage change total

in employment employment inemployment employment

1974-79 1979-84 1974 1984 1974-79 1979-84 1974 1984

Percent

Metro areas:

New York-New JerseyPhiladelphia -5.9 -10.8 23.7 18.1 10.9 14.5 49.2 588

Upstate New York MSAs -4.3 -14.8 30.7 24.5 11.1 8.2 41.4 48.5

Buffalo -8.9 -29.7 31.2 21.8 14.3 3.4 40.8 52.5

Other upstate MSAs -2.4 -ai 30.5 25.4 12.1 10.1 40.8 47.2

Pennsylvania

(except Philadelphia) -2.3 -22.2 37.8 28.7 11.7 8.2 39.6 49.9

Southern MSAs 2.4 11.2 38.0 32.0 18.3 12.1 36.8 45.1

Central MSAs -5.1 -13.3 33.5 27.2 15.3 8.3 37.2 45.9

Western MSAs -5.7 -36.6 31.3 19.7 16.9 5.5 42.6 55.5

Pittsburgh -3.8 -39.2 29.5 18.1 16.6 5.8 44.2 57.2

Other western MSAs -11.4 -28.3 38.2 26.3 18.1 3.9 36.5 48.6

Nonmetro areas:^

New York State -3.0 -13 3 29.5 23.6 12.9 7.1 39.6 45.5

Eastern -.7 -5.2 23.2 19.4 12.0 10.7 46.7 51.3

Central -5.8 -18.6 30.7 22.8 10.7 9.0 39.5 46.2

Western -6.0 -17.5 37.8 30.0 15.5 4.7 3â7 41.7

Northern 4.3 -7.3 23.8 20.9 13.0 4.6 40.9 43.9

Pennsylvania -3.2 -22.1 37.8 28.7 16.9 4.9 33.4 41.3

Eastern -2.3 -18.3 40.8 32.8 11.6 9.1 32.4 39.7

Nortiierntier -.3 -18.7 42.2 35.6 17.3 2.2 32.2 40.1

Central -1.5 -15.1 39.9 32.5 17.1 8.8 33.8 41.9

Western -6.2 -30.4 33.7 22.4 19.1 2.0 34.2 42.3

^All data are for September of the year.

^As of the 1983 0MB definition, there are no nonmetro areas in New Jersey.

10
The Mid-Atlantic Region in Transition

Table 9—Distribution of employment by sector in metro

and nonmetro areas, Mid-Atlantic region, 1974 and 1984^

Economic sectors Percent of total employment

by national Metro Nonmetro

1974 1984 1974 1984

Percent

Fast-growtii 1974-79 and

1979-84:

Services 19.0 24.8 16.1 20.4

Finance, insurance, and

reaf estate 6.7 7.7 2.8 3.2

Whoiesale and retail trade 20.6 22.0 17.5 20.0

Subtotal 46.3 54.5 36.4 43.6

Fast-growth 1974-79,

slow-growth 1979-84:

Mining .2 .1 1.6 1.8

Slow growth 1974-79 and

1979-84:

Government 16.2 15.5 19.5 21.1

Transportation and

public utilities 6.4 5.7 4.8 4.5

Subtotal 22.6 21.2 24.3 25.6

Slow-growth 1974-79,

decline 1979-84:

Construction 4.3 3.9 3.9 2.9

Manufacturing 26.6 20.2 33.8 26.2

Subtotal 30.9 24.1 37.7 29.1

Total employment 100.0 99.9 100.0 100.0

^All data are for September of the year. Source: (7)

fast-growing, slow-growing, and declining sectors as the

Nation, most sectors performed less well in the region than

nationally. The region lagged the Nation in manufacturing

particularly. In nearly all of the major 2-digit manufacturing

industries, regional employment grew more slowly or declined

more rapidly than in the Nation in both the late 1970's and

early 1980's. The region overall was apparently less

competitive than most other parts of the Nation.

Employment performance differed among metro and nonmetro

areas within the region because of area differences in mix of

economic sectors and in rates of employment change among

sectors. From 1974-84, metro area economies, on average,

were more oriented to national fast-growth sectors such as

services, trade, finance, insurance, and real estate than

nonmetro areas. Conversely, nonmetro areas were often more

oriented to nationally slow-growth or declining sectors such as

mining and manufacturing. Between 1974 and 1979, nonmetro

areas were able to counteract their disadvantageous mix of

sectors with higher rates of employment growth in most sectors

than metro areas experiencod. From 1979 to 1984, growth

rates of most sectors in nonmetro areas dropped well below

metro area rates. The shift in rates in manufacturing was

especially significant for nonmetro areas since manufacturing

is a more important employer in nonmetro areas than in metro

areas. The rate of decline in manufacturing fell from -3.2 to

-18.3 percent in nonmetro areas between 1974-79 and

1979-84 compared with -4.8to -14.2 percent in metro areas.

The national slowdown in manufacturing adversely affected

Table 10—Change in numbers employed by metro and nonmetro areas, Mid-Atlantic region, 1974-79 and 1979-84^

Metro areas Nonmetro areas

Economic sectors

by national

growth performance Employment

Change in

number employed Employment

Change in

number employed

1974 1974-79 1979-84 1974 1974-79 1979-84

Fast-growth 1974-79 and 1979-84:

Services

Finance, insurance, and real estate

Wholesale and retail trade

2.546.4

893.4

2,760.4

473.3

73.4

191.7

Thousand

542.1 169.6

139.1 29.7

201.8 183.3

25.2

3.3

28.1

23.0

1.1

2.4

Subtotal 6,200.2 738.5 983.0 382.6 56.6 26.5

Fast-growth 1974-79, slow-growth 1979-84:

Mining 25.7 2.5 -8.7 16.4 6.5 -3.9

Slow-growth 1974-79 and 1979-84:

Government

Transportation and public utilities

2,162.9

859.0

75.8

-2.8

-15.0

-31.5

204.6

51.8

27.0

.2

-6.4

-3.6

Subtotai 8,121.9 73.0 -46.5 256.4 27.2 -10.0

Slow-growth 1974-79, decline 1979-84:

Construction

Manufacturing

579.2

3,555.5

-39.7

-170.0

16.6

-480.4

40.5

354.6

.4

-11.1

-10.3

-63.0

Subtotal 4,134.7 -209.7 -463.8 395-1 -10.7 -73.3

Total employment 13,382.5 604.3 364.0 1,050.5 79.6 -58.1

""All data are for September of the year. Source: (7)

11
Theodore E. Fuller

Table 11—Percentage unemployment, Mid-Atlantic region

and the United States, 1974-84

Unemployment in September

Area 1974 1979 1984

Percent

Mid-Atlantic region 5.9 7.0 7.1

New York 6.5 7.5 6.7

NewJersey 6.4 6.2 5.8

Pennsylvania 4.8 6.7 8.7

Metro areas 6.0 7.0 7.1

Nonmetro areas 5.5 7.0 8.4

United States 5.7 5.7 7.1

Source: (5, 8)

both metro and nonmetro areas in the region but nonmetm

areas more so.

Variations in sector-mix and growth rates were also related to

differences In employmentchange among metro and nonmetro

areas. Areas favored with a mix weighted to national

fast-growth sectors suchas services and trade seemed to fare

better than those areas more oriented to mining and

manufacturing. Metro areas ofthe New York Glty-to-Philadelphia corridor thus achieved an above national average rate of

employment growth compared with declines for areas of

interior and western Pennsylvania. Nonmetro areas of eastern

and northern New York did better than those in western New

York and Pennsylvania.

The employment trends of the Mid-Atlantic region and in

particular of some oí its slow-growing or declimngfmetro and

nonmetro areas in the past 5 years have left someadjustment

problems in the region. Unemptoyment rates, for example, are

up in metro and nonmetro areas that have experienced

declining employment levels. The national trend of declining

employment in manufacturing is hurting areas especialty

dependent on manufacturing. The neariy uniform poorer

performance of most manufacturing industries in the region

than the Nation suggests the region is at some competitive

disadvantage in the sector. Lower growth ratés in nationaliy

fast-growth sectors suchas services, trade, finance, insurance,

and real estate in the Mid-Atlantic region than in the Nation

also raises questions of the competitive performance of the

region, particularly outside the metro areas of^he New

York-to-Philadelphia corridor and southeasternPennsylvania.

The national and regional decline in manufacturing may level

off or reverse itself in the near future. In the meantime, the

region and its harderpressed areas should investigate how to

become more competitive and nourish and attract more

enterprises in the national growth sectors. Undoubiedly this

course is being pursued in varying degrees already. Nonmetro

areas in particular may find it useful to appraise new

employment possibilities such as in the seMce and trade

sectors as well as manufacturing.

References

(1) Bluestone, Herman. Employrnent Growth in Metro and

NonmetroAmerica: A Change in the Pattern? U.S. Department

of Agriculture, Economic Research Service. AER-492,

November 1982.

(2) Fuller, Theodore E. The Northeast: Two Decades ofSlow

Employment Growth. Northeast Regional Center for Rural

Development, Publication 31, May 1982.

(3) Goode, Frank M. The Rural-Urban Turnaround: What Is It,

Why Has It Happened, and is It Going to Continue? The

Pennsylvania State University, Department of Agricultural

Economicsand Rural Sociology, AE&RS 183, February 1986.

(4) Jackson, G., G. Masnick, R. Balton, S. Bartlett, and J. Pitkin.

Regional Diversity: Growth in the United States, 1960-1990.

Boston: Auburn House Publishing Company, 1981.

(5)New Jersey, NewYork, andPennsylvania Departments of

Labor. Data by State and labor market areas.

(6) Schmidt, William E. "Rural Southern Towns Find Manufacturing Boom Fading." New Yori< Times. March 21, 1985.

(7) U.S. Department of Labor, Bureau of Labor Statistics.

Employment and Earnings-United States, 1909^8 ana

Supplement for W79-84.

(8) Employment and Earnings (monthly),

December 1974, 1979, and 1984 issues.

12
The Mid-Atlantic Region in Transition

Appendix-Metro and Nonmetro Areas in the

Mid-Atlantic Region

Groups of IVIetro Areas (PfUISAs and I^SAs)

New York-New Jersey-Philadelphia -

New York PMSA

Nassau-Suffolk PMSA

Poughkeepsie MSA

Orange County PMSA

New Jersey State

Philadelphia PMSA

Upstate New York areasBuffalo

Buffalo PMSA

Niagra Falls PMSA

Other upstate areasAlbany-Schenectady-Troy MSA

Glen Falls MSA

Utica MSA

Syracuse MSA

Rochester MSA

Binghamton MSA

Elmira MSA

Southeast Pennsylvania areasAllentown-Bethlehem-Bastón MSA

Reading MSA

Harrisburg-Lebanon-Carlisle MSA

Lancaster MSA

York MSA

Central Pennsylvania areasScranton-Wilkes-Barre MSA

Williamsport MSA

State College MSA

Altoona MSA

Western Pennsylvania areasPittsburgh

Pittsburgh PMSA

Beaver County PSMA

Other areas

Johnstown MSA

Sharon MSA

Erie MSA

Groups of nonmetro areas (counties)

New York StateEastern areas

Columbia

Ulster

Sullivan

Delaware

Otsego

Schoharie

Central areas

Chenango

Cayuga

Seneca

Cortland

Tompkins

Schuyler

Western areas

Steuben

Allegheny

Cattaraugus

Chautauqua

Wyoming

Genesee

Northern areas

Jefferson

Fulton

St. Lawrence

Clinton

Lewis

Hamilton

Franklin

Essex

PennsylvaniaEastern areas

Fulton-Franklin Schuylkill

Susquehanna Wayne-Pike

Northern tier areas

Bradford Tioga

Potter McKean

Warren Elk

Yates

Sullivan

Cameron

Central areas

Clinton Juniata-Mifflin

Huntingdon Bedford

Unlon-Snyder-Montour-Northumberland

estern areas

Crawford Venango-Forest

Clarion Jefferson

Clearfield Indiana

Armstrong Butler

Lawrence Greene

13