PlanPhilly

How Philly's economy will treat refinery, hospital workers facing layoffs

Eileen McAvoy started working at Hahnemann University Hospital in 1986. For nearly 33 years, she’s cared for newborns in the neonatal intensive care unit. “I thought I had the best job in the world,” she said. 

No longer. McAvoy was stunned to learn Wednesday that the hospital’s owner wants to close it down, leaving her and 3,000 others out of work.

“I want to wake up tomorrow and it’s all been a bad dream,” she said.  

But McAvoy might actually be one of the lucky ones. Hahnemann announced its closure on the same day that Philadelphia Energy Solutions announced a plan to close its sprawling South Philadelphia refinery complex, laying off more than 1,000 employees. 

Experts say the two groups of workers will walk into radically different job markets. The city’s health care industry is thriving, according to Jeff Hornstein, executive director for the Economy League of Greater Philadelphia. There are 60,000 jobs in hospital-system employment in the city alone, with tens of thousands more across the region, he said.

“Health care workers are in really high demand, so I don't imagine it's going to be as hard for those folks to find jobs as it might be for the refinery workers,” Hornstein said. “The [health care workers’] employment future is pretty bright.”

Philadelphia Energy Solutions workers face fewer prospects. There are only 1,500 refinery jobs in the region, and most are at the South Philadelphia complex being shuttered. The four other refineries in the greater Philadelphia area — facilities owned by PBF Energy in Paulsboro, N.J, and Delaware City, Del.; by Monroe Energy in Trainer, Pa.; and by Phillips 66 in Linden, N.J. — are much smaller. 

Analysts said Thursday that those refineries are unlikely to pick up the lost jobs or increase production in the near term.

“The economics are maybe a little bit better now than they were, but if they’re going to expand, they had the option to do it in the past already,” Chris van Moessner, an editor covering oil futures at S&P Global Platts, told WHYY News.

Although national unemployment is at near-record lows, and wages are barely inching up after decades of stagnation, the jobs at the refinery will be difficult to replace. There are still relatively few jobs that can be secured with strong wages and benefits without a high school degree, and the gas and oil refining industry is one of them. 

“It leaves you with a dearth of alternatives, if you are a blue-collar worker who has worked until age 50 and you don’t have a college degree,” said Todd Vachon, a postdoctoral associate at Rutgers School of Management and Labor Relations. “There are not a lot of alternatives out there that will give you an equivalent rate of pay compared to what you were making in the refinery.”

Environmental activists, who have long argued that the pollution-generating refinery should close, say they want green energy industries to take over the sprawling 1,300-acre refinery site.

But Vachon said wage rates in the green energy industry are, on average, not as high as those in fossil-fuel extraction and processing. (The jobs, however, do pay better than the average American job.) 

Vachon said the impressive wage rates in the fossil-fuel industry didn’t just occur naturally. Instead, many of these work sites have been unionized for decades, and after what amounts to generations of collective bargaining, stronger-than-average wage and benefits packages have been won  — organizing that hasn’t occurred in the nascent renewables industry.  

With reporting by Nina Feldman.

 

About the author

Jake Blumgart, Reporter

Jake Blumgart is PlanPhilly's planning, development, and housing reporter. He covers the city's built environment and the people who live and work there. He lives in Cedar Park and has also contributed to Slate, CityLab, Next City, The Philadelphia Inquirer, Philadelphia Magazine, and the American Planning Association's magazine. Follow him on Twitter @jblumgart and email him at jblumgart@whyy.org.

 


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