The Herald, Sharon, PA Published Sunday, Nov. 12, 2000


Brain drain has officials racking theirs

By Robert B. Swift
Ottaway News Service

Young? Got a degree? You're outta here!

Pennsylvania's best and brightest have gone job hunting out-of-state at a clip of 20,000 a year for the last forty years.

These graduates of Pennsylvania's universities and colleges are landing Internet jobs in the Silicon Valley, relocating to booming Atlanta and commanding high wages in Raleigh's Research Triangle.

Pa.'s brain drain
The number of 18- to 24-year-olds in Pennsylvania has fallen nearly 20 percent in less than a decade, according to the U.S. Census Bureau.

of Pa.
199012,568 130,54533,107 1,234,666
199411,357 115,34929,512 1,111,694
199610,823 105,36027,805 1,039,367
199810,703 101,99127,563 1,022,038
Beyond its obvious effect on the state's labor and skills pool, this continuous out-migration has discouraged growth of business, has held back property tax reform and will likely lead to further reduction in political clout with redistricting based on the 2000 census.

Another example of the impact is the graying of Pennsylvania, with a population of 12 million. Second only to Florida in the percentage of residents over 65, the distinction becomes even more so with the exodus of young Pennsylvanians. State lottery revenues, for instance, are dedicated for senior citizens, while Pennsylvania holds a near-bottom ranking in public financial assistance for higher education institutions.

The number of Pennsylvanians in the pivotal 18-to-24 age group declined 20 percent in the 1990s, according to the U.S. Census Bureau. Census figures show a similar trend in Mercer County and the Pittsburgh region.

During the past several years, Pennsylvania has implemented new economic development, tax and education policies designed to put a plug in the brain drain that has gone on decades.

"I think we've made significant changes to effect a turnaround long term," said Gov. Tom Ridge late last year. "People will go where they can find attractive, decent family-sustaining employment. With the state's emphasis on technology-related jobs, there will be a lot more attractive jobs in Pennsylvania."

Pennsylvania was a leader in the political, industrial and transportation revolutions of the 18th, 19th and 20th centuries because of its brainpower, Education Secretary Gene Hickok says. Pennsylvania's ability to play a role in the technological revolutions of the 21st century is jeopardized if the high achievers continue to depart, he adds.

Pennsylvania's brain drain, which started following World War II, is now reaching its third generation. The grandparents of today's twenty-year olds were the first generation to think that greener economic pastures lay outside Pennsylvania.

The out-migration has continued as the state's coal, rail and steel industries fell from prominence, as Pennsylvania became an "aging" state with large number of senior citizens, as the first efforts to promote "high-tech" growth began in the 1980s and as the move to catch the e-commerce wave started in the late 1990s.

It has persisted in times when the state's jobless rate has been above the national rate and even when the state's jobless rate, currently hovering around 4 percent, is below the national rate.

Pennsylvania is not alone in dealing with a brain drain. Other northern industrial states face similar problems. The state of Connecticut recently put the brakes on a population exodus with new education and economic development policies.

The out-migration has consequences for those who stay behind in Pennsylvania:

  • Businesses, especially those in the high-tech sector, say it's tough to find new employees with the requisite technical skills. Ansys Inc., a software manufacturer in Canonsburg, has posted openings for engineering and technical jobs on a state government Web site -- -- but gotten no results. The firm gets some new hires through an intern program with Pittsburgh's Carnegie Mellon University, but otherwise it's in competition for talent with the Silicon Valley. "We point out that the Silicon Valley is great for single people, but the Pittsburgh area offers quality of life benefits for employees raising families," says spokeswoman Nancy Fisher.

  • Civic life suffers. The pool of qualified individuals able to sit on local school boards and municipal councils is shrinking. About one-quarter of small town officials in Pennsylvania are 65 years and older. About half of that group won't seek reelection, according to a recent survey by the Center for Rural Pennsylvania.

    The small borough of Washingtonville in Montour County conducts a search every so often to fill vacancies on its seven-member council. The older generation that was once active in local politics has left the scene, while the young families are working two jobs to make ends meet and don't have the time, says Mayor Elizabeth VanNostrand.

    "We have 200 people," she adds. "It makes it (recruitment) difficult."

  • As the elderly population continues to grow, there may be fewer resources available for programs benefiting the young and middle-aged. The Pennsylvania Lottery generated almost $700 million last year for programs benefiting senior citizens, but ticket sales are slowing, the fund's reserve is shrinking and costs climb for the Lottery's expensive prescription drug program. The Ridge administration hopes to boost sales with more marketing and computerized games, but if that doesn't work, future governors and lawmakers will have to consider program cuts, tapping state general tax revenues, or legalizing new forms of gambling.

  • Tax reform becomes impractical. At the local level, efforts by schools and counties to reduce reliance on property taxes and shift to more equitable income taxes are jeopardized. This switch depends on being able to collect enough income taxes from high wage earners to replace the revenues lost by reducing property taxes.

    Hazelton Area School District in the anthracite region is one of the first to experiment with a tax change option provided under a 1998 law.

    It's been a rocky road, says superintendent Dr. Geraldine S. Shepperson. More people applied for the property tax break than anticipated. The result is the district's reserve fund is depleted, the income tax rate has been doubled and officials are unsure if they will have sufficient revenues to operate the schools. Shepperson worries that wage earners will move out of the district to avoid the tax.

  • Loss of political clout. Pennsylvania stands to lose two congressional seats in 2002 with redistricting to reflect the 2000 census count. The state's congressional delegation has shrunk from 27 in 1970 to 21 during the 1990s and to a projected 19 in 2002. New congressional districts will be created in Georgia, Texas, California, sunbelt states that attract young Pennsylvanians.
In Harrisburg, the brain drain is a new buzzword in the policy debates over state taxes and economic development spending.

Ridge drew a connection between taxes and out-migration in his state budget address last February when he proposed a round of new tax cuts.

"What do high taxes mean in Pennsylvania?" he asked. "They mean watching your job or your neighbor's job leave for a more job friendly state. And they mean watching our sons and daughters pack their bags to find opportunity in those states."

The state budget that went into effect July 1 provides $775 million in tax cuts to businesses and individuals. The budget cuts the state capital stock and franchise tax -- a levy on a company's stock value -- by two mills, bringing a savings of $300 million for businesses next year. Ridge says this tax is particularly onerous to high-tech startup firms.

Tax cuts are one tool available to the state. Financial aid is another.

The Ridge administration has launched a number of initiatives aimed at spurring job growth in the high-tech and biotechnology/

pharmaceutical sectors. One recent initiative, dubbed the "Lightning Manufacturing Project", encourages manufacturers to use Internet technology in the engineering, design and production of products.

Not to be outdone, House Democratic lawmakers have offered their own "emerging industries" package. One of their proposals would establish a Pennsylvania Medical Research Authority to float $300 million in state bonds to finance research and development of new products.

Pennsylvania ranks in the top tier of states in terms of growth in the biotechnology industry, but it falls in the bottom tier in overall net creation of new jobs.

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