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Report examines Erie County productivity, brain drain By Loretta Brandon
Members of the academic and business communities in Erie, Pa., meet to talk about economic issues during a conference of the Economic Research Institute of Erie, an outreach center of Penn State Erie’s School of Business. Photo by Penn State Erie	For the first time ever, the faculty of the Economic Research Institute of Erie (ERIE), an outreach center of the Sam and Irene Black School of Business at Penn State Erie, has published a report exploring the productivity of workers in Erie County. The surprising research, unveiled at ERIE’s spring conference, has produced an unexpected community dialogue that takes direct aim at Erie’s economic development.   “We found that the average Erie manufacturing worker produces 29 percent less per hour than the average American manufacturing worker,” Dr. James Kurre, ERIE’s co-director and adviser for the productivity study, said. “While this information is upsetting to some people, it may help explain the erosion of the county’s manufacturing base over the past two decades.”   In his research, Kurre defined productivity as one measure of the value added—value of a product minus the cost of the materials used—for one hour of a worker’s time.   The Economic Research Institute of Erie was established at Penn State Erie in 1982 to collect, analyze, interpret and disseminate data and information about the Erie County economy.   Erie’s manufacturing jobs have dropped from 42,300 in 1980 to 26,800 in 2003. Per capita income in Erie in 2001 was $25,495, a figure 16 percent below the national average of $30,413. According to the report, this translates to a lower standard of living in Erie County and reduced competitiveness of Erie manufacturing firms.   The institute’s study showed Erie manufacturers actually did improve productivity by 159 percent since 1977—a far cry from the 261 percent increase in the national average productivity in the same time period. The report points to four possible causes for the decline of Erie’s manufacturing jobs: loss of population, weak capital investment, unionization and low educational attainment.   The Erie Times-News covered the conference, precipitating a flurry of letters to the editor and community dialogue.   While some members of the public saw the ERIE study as an indictment of unions and union workers, most saw the problem as weak capital investment. In 1997, Erie manufacturers invested more than $200 million in capital equipment, or about $8,400 for every production worker. The average investment among 259 other metropolitan areas that year was $14,450.   Another issue Kurre addressed at the conference is brain drain—the region’s loss of high-achieving college graduates. Recent research done by ERIE demonstrates that among Penn State Erie graduates, 27 percent of graduates native to Erie County choose to leave the area after graduation, a portion much smaller than expected. Many of those choosing to leave are graduates in the fields of engineering and business.   The conference also included forecasts of the national economy by Dr. Barry Weller, co-director of ERIE, and analysis of the international economy by Dr. Ken Louie, ERIE senior research associate.