How Pennsylvania is trying to keep younger workers in the state

Pennsylvania is getting grayer by the day. This week on the Capital-Star, we’re exploring why young people are staying and leaving the commonwealth — and what the state can do to keep them. Have a story to tell? Email us.

Pennsylvania is getting older.

Between 2017 and 2025, the number of working-age Pennsylvanians (those between 20 and 64) is expected to decline by 1.4 percent, according to the state Independent Fiscal Office. At the same time, the number of people 65 and older is expected to grow by a whopping 23.4 percent.

An older population means Pennsylvania’s budget will be tested in ways it hasn’t before, with rising healthcare costs and a shrinking tax base.

So it should come as no surprise that state lawmakers are trying to keep and attract younger workers to Pennsylvania.

But what’s the best way to do that? Here are a few of the proposals on the table.

Workforce development

In a workforce development-heavy budget proposal, Gov. Tom Wolf in February proposed a Statewide Workforce, Education, and Accountability Program (SWEAP) that builds off the PAsmart grants introduced in 2018.

The bulk of that grant program — $20 million — is targeted at K-12 STEM education. Another $7 million is set aside for apprenticeships in traditional fields like construction and manufacturing as well as tech.

“The real benefit with apprenticeships is it’s a job,” Labor & Industry Deputy Secretary for Workforce Development Eileen Cipriani said. “You’re earning while you’re learning.”

In 2016, Wolf created the Apprenticeship and Training Office under Cipriani’s purview. Since then, she said, apprenticeships have grown by 32 percent.

The state also supports an internship program for high school and college students run by regional workforce development boards. Those groups place young people in local businesses to expose them to the possibilities in their own areas, Cipriani said.

Cipriani said one young woman who participated — a chemistry major — assumed she would end up in research or teaching. Instead, she tweaked her plan after doing a quality control internship at a metalworking company.

“It totally changed the trajectory of what she was going to do,” Cipriani said. “The company was right in her backyard.”

Grants for community college students

In his budget, Wolf also proposed $8 million in grants to community college students and graduates who stay to work in the state.

“The goal behind the program is to incentivize those individuals to stay in Pennsylvania, to work in Pennsylvania, contribute to their local economies in Pennsylvania,” administration policy director Meg Snead told the Capital-Star.

A community college student or graduate who obtains an associate degree would be able to apply for one grant of up to $2,500. Snead said there are no limitations on the use of the money. The application process is still being hammered out, she said.

The requested $8 million allocation would provide for 3,200 individual grants, assuming each individual receives the maximum amount.

According to Independent Fiscal Office data, 47,000 degree holders between 20 and 35 who lived in Pennsylvania in 2014 left the next year. Nine percent of those leaving had an associate degree, and more than 50 percent had a bachelor’s degree.

Wolf’s administration indicated the program would serve as a pilot for other similar grant programs.

House Republicans greeted the proposal with some skepticism during budget hearings, thinking that it would be better to bump up funding for existing programs.

One expert applauded the support for community colleges, but doesn’t expect the program to do much to attract or retain educated residents.

Jim Russell, a geographer who studies the relationship between migration and regional economies, said community colleges are the least likely of all institutions to attract students from out of state. Their graduates are also the least geographically mobile of all degree holders.

He said that the real problem facing community college students isn’t that they leave the state with their new skills — it’s that they have trouble completing a degree.

Data from the National Center for Education Statistics show that all of Pennsylvania’s 14 public community colleges had graduation rates below 30 percent among their full-time degree seeking students.

Russell thinks that if Pennsylvania wants to bolster its workforce by investing in community colleges, it should try its best to incentivize graduation.

Rather than give students $2,500 to pursue their studies, offer them $2,500 for each year of study or degree program they complete, he said.

“Put [the incentive] at the end, and then students graduate and they’re employable,” Russell said.

A tax-free account for first-time homebuyers

To encourage young people to buy homes, Rep. Rosemary Brown, R-Monroe, and Rep. Ryan Bizzarro, D-Erie, introduced legislation this year to allow for tax-free savings accounts.

“The maximum amount of all contributions to a first-time home buyer savings account is $150,000,” per the bill’s language. An individual filer can contribute up to $5,000 a year, while joint filers can stash away twice that amount.

The language would also allow a parent or relative to create an account for a child, or have a parent contribute to a child’s account.

Citing young people weighed down by student debt, Brown said the bill was “meant to help people pay attention to their savings, to help them work towards owning the home and the American Dream.”

She added that she expected the bill to pay for itself from the sales tax revenue on the furniture and other items to fill a new house. The House Appropriations Committee said an exact fiscal impact was impossible to predict.

The bill passed the House last month with just a single dissenting vote. It is now in the Senate waiting for a committee vote.

Russell, the geographer, said that subsidies and tax breaks for homeowners are one of the most common policies that states adopt in the name of stopping brain drain.

The problem is, there’s no good way to tell if they’re effective.

According to Russell, it’s possible that people who take advantage of these programs would have bought homes anyway. It would take sophisticated research to determine if the assistance was the reason someone stayed in state.

Even if Pennsylvania isn’t directly subsidizing homebuyers under the House proposal, it would still take in less revenue by offering a tax break. In both cases, it’s worth questioning the return on investment, Russell said.

“The common concern with these programs is that someone will get assistance and then turn around, sell the home, and leave the state,” Russell said. “If someone is using it to get into the marketplace or flip [a home,] then certainly, with regards to brain drain, you failed, because they took advantage of the subsidy and went to greener pastures.”

Trading student debt for a mortgage

In Pittsburgh, one city council member has proposed a plan that would forgive student debt if a person obtains a mortgage from a public agency and stays in state. The General Assembly would have to approve the idea.

“If the state would allow us to do something, it’s a great way to try and keep young people here,” Corey O’Connor, who represents the city’s Squirrel Hill neighborhood, told the Capital-Star.

Under the program, the state would forgive federal or state student loan debt of up to 15 percent of a home’s cost. A $250,000 home, for example, would mean $37,500 in debt forgiveness. The buyer would pay any additional debt over the forgiven amount.

Other details, such as how long a person would need to stay in Pennsylvania or penalties for leaving, would be up to the state to decide. State Rep. Jake Wheatley, D-Allegheny, introduced a bill to set up a similar program last session, but has yet to reintroduce it.

O’Connor said he’s lobbied the General Assembly to advance the program, but ran into problems in the Senate over the cost.

He said even a pilot program for Pittsburgh with just $100,000 could make a difference in proving the program’s worth.

“We think it’ll keep a lot of people in the city of Pittsburgh if we can do it,” he said.

Russell said that loan forgiveness programs have shown success in places like Niagara Falls, New York, which plans to forgive $7,000 of student loans for people who agree to live for two years in a targeted downtown neighborhood.

The advantage of such programs is that they don’t just retain current residents — they also attract people in from outside.

And at the end of the day, attracting new residents, and not retaining current ones, should be the goal of any public policy that wants to stimulate population growth, Russell said.

FULL COVERAGE: The Capital-Star’s Brain Drain Series

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Stephen Caruso
Stephen Caruso

Stephen Caruso is a former senior reporter with Pennsylvania Capital-Star. Before working with the Capital-Star he covered Pennsylvania state government for The PLS Reporter.

Elizabeth Hardison
Elizabeth Hardison

Elizabeth Hardison covered education policy, election administration, criminal justice and legislative news for the Capital-Star from Jan. 2019-April 2021. You can find her on Twitter @ElizHardison.

Sarah Anne Hughes
Sarah Anne Hughes

Associate Editor Sarah Anne Hughes covers the governor and Pennsylvania's agencies. Before joining the Capital-Star, she was the state capitol reporter for Billy Penn and The Incline, and a 2018 corps member for Report for America. She was previously managing editor of Washington City Paper, editor-in-chief of DCist, and a national blogger for The Washington Post.