The short answer? Not that much. At least not right away.
Tom Wolf will become Pennsylvania’s new governor on January 20. You may be wondering what that means for the state economy, and in particular, for Pennsylvania’s 5.4% unemployment rate.
Not much, if you talk to the experts. Economists across the political spectrum say governors don’t have that much influence over the economy in the short term.
Nathan Benefield is an economist at the right-leaning Commonwealth Foundation. “The state economy is tied to national economy, and so the ups and downs, just the business cycle that is happening nationally and even globally. So a lot of it is outside of the hands of the governor,” said Benefield when we interviewed him before the election.
A governor’s powers to create jobs are generally limited to decisions over two things: education and infrastructure spending, said Mark Price, a labor economist at the left-leaning Keystone Research Center.
“In the short run, it’s pretty hard for any of the decisions they might make in those areas to influence how the economy is doing,” Price said. “It really comes into an impact more 5, 10, 15, 20 years down the line when infrastructure pays off and when investments you’re making in education begin to pay off as workers enter the labor force.” (Price says there is a recent exception. He argues that because of a perfect storm of factors, Governor Corbett’s cuts to education spending in 2011 slowed job growth in the short-term.)
During his campaign, Wolf talked about education as an engine for economic development. He said he’d give scholarships to high school students who go to college in Pennsylvania and create partnerships between colleges and companies.
But if the economists are right, Pennsylvanians shouldn’t expect the new governor’s policies to move the needle on the jobless rate or job creation right away.