July 27, 2017 - ERIE, Pa - It's bad news for the employees at GE who now fear losing their jobs, it's also bad news for the economy. Manufacturing, of course, has always been an important sector in the Erie economy, and what happens in the manufacturing sector has spill over consequences for the rest of the economy, whether positive or, like today's case, negative.
Erie Regional Chamber estimates those 575 jobs totaled more than $40 million in payroll on an annual basis. That's $40 million no longer being spent in the Erie economy. The impact can be significant. It's not just the direct loss of money, but the indirect loss of how that money churning in the economy creates other jobs and opportunities.
"The air into the balloon that makes the balloon bigger, is payroll," explains Jake Rouch, the Vice President of the Economic Development Division at The Erie Regional Chamber and Growth Partnership.
Less money in the economy creates a domino effect. Cuts in public expenditure means a loss of value on homes, a slow down of sales in the retail sector, less people utilizing goods and services, fewer students enrolled in the school systems, less students moving on to college, and potentially, a loss of jobs across many sectors.
However, experts say while this is the predicted trend of the economy when there's a major loss of jobs, it's impossible to accurately forecast the future.
"It's too premature to sound the alarm bells and to say that this is a major catastrophic or devastating impact," says Dr. Kenneth Louie, Director of Economic Research Institute of Erie.
"I don't think it'll push a bunch of businesses out of business. It'll just make things tighter and more challenging for them... and every time we lose jobs and that spending power in the economy, that's what happens," explains Rouch.
Rouch mentions early 2016 when GE cut nearly 1,500 jobs. He explains these cuts as an "add on" to that. He also says the way Erie reacts to major job cuts has changed, "Erie's doing what it has to do. It's no longer sitting back and saying, well, we can't take any action... it's taking action."
Louie adds, "Looking at the past, Erie, despite all of the recent economic challenges that we face, we've been very resilient."
That resiliency comes in the form of some of Erie's job creating investments going on right now, like Erie Insurance, UPMC, St. Vincent, and others.
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