Central Penn Business Journal, January 3, 2002

Aging Population Increases Service Demand

By TRACEY McCRAW
Contributing Writer

Supply and demand is how Sean Harper accounts for the growth of certain industries in Central Pennsylvania.

Harper, a statistician and information officer for the state Department of Labor & Industry's Center for Workforce Information and Analysis, uses this principle when explaining why some industries, such as service, continue to flourish in an economic slowdown. He says the jump in the service industry is an answer to a service need. Along with food preparation and retail, some of the services that are growing are health care, information technology and telemarketing.

Ira Wolfe, founder of Success Performance Solutions in Leola, says increases in jobs in the service industry are due mainly to an aging population. "If you increase the number of people and they demand more services, you create a need for service jobs," he says.

Wolfe says the health care industry is increasing because people over 55 years old require health care services at a rate of 15 times more than people under 55.
Wolfe says the number of people under the age of 18 is equal to that of those over 55. This group of the population also requires health care services along with educational services. Another fast-growing service industry, according to Wolfe, is food preparation. He attributes this to a more mobile society.

Harper says the manufacturing industry has been on a slow and steady decline in response to advances in technology: the same amount of goods can be produced with fewer people today than in decades past. However, he says manufacturing still accounts for a very large number of people employed in this region.

Others agree with Harper. David Nikoloff, executive director of the Economic Development Company of Lancaster County, says Lancaster is the third-largest metropolitan area in the state in the number of people employed in industrial jobs, falling behind Pittsburgh and Philadelphia. Nikoloff says Lancaster County has seen an upturn in manufacturing and industry, and it has increased its industrial base in the last 10 years.

Nikoloff says he expects to see the number of people employed in the retail and service industries to grow. These industries account for 28 percent to 30 percent of the total work force in Lancaster County. However, he says that these jobs tend to pay lower wages than those in manufacturing. "Manufacturing is a driving force (in Lancaster County)," he says.

Lancaster County has 948 manufacturing establishments compared with more than 6,000 retail and service business establishments, yet workers in the two industries earn almost equal amounts, according to Nikoloff.

Chad Christ expects to see manufacturing continue its decline, while the service industries, including retail and public transportation, will grow. Christ is an administrator in Reading with GPU Energy, a First Energy Co.

Kevin Hodge, senior manager of development with the York County Economic Development Corp., doesn't track job growth statistically, but says the manufacturing industry accounts for about 30 percent of the work force in York County. Many companies interested in coming to the county are food processors and distribution centers, he notes.

Service jobs employ the largest number of people in Dauphin County, accounting for 28 percent of the work force. Manufacturing follows at 20 percent, government (local, state and federal) at 19 percent and retail at 16 percent.

Dan Robinson, director of the Dauphin County Department of Community and Economic Development, says the service industry, especially health care, continues to grow in Dauphin County. He attributes that growth to recruitment efforts.

Local colleges are seeing the effects of service jobs growth. According to Frank Mussano, dean of administrative services at York College, 7 percent of the freshman class is studying education, nursing and criminal justice, while 5 percent are studying communications, business and psychology. Frank Miller, registrar for Penn State York, says there's been a significant increase in students working toward both two-and-four-year degrees in the schools of Information Sciences and Technology.