Rust Belt Economic Geography

Just how much has Pittsburgh divested itself from steel? Albeit state-level data, I see an important redevelopment undercurrent:

In the United States, the biggest steel-producing states include Indiana, Ohio, Arkansas, Alabama, North Carolina, South Carolina and Texas, according to the United States Steel Manufacturers Association. And Pennsylvania remains a maker of steel, though at nothing near the level it was in Andrew Carnegie’s day.

The Pittsburgh Steelers are an anachronism. Yet, king steel remains entrenched in the Mahoning Valley in Ohio. The stunning contrast in economic fortune is wrapped up in the story of clinging too strongly to a community's past.

I'm still thinking about Chicago versus Pittsburgh. Like the Sun Belt (with the notable exceptions of southern industrial cities), Chicago rode the wave of in-migration. Increases in educational attainment and (by extension) income per capita are the result of talent attraction. Nowhere is that dynamic more apparent than Florida:

Business leaders said keeping university graduates in the state could help build the high-tech, high-wage economy Florida desperately needs.

"Today's students are tomorrow's business leaders in the state,” said Gabe Sheheane from the Florida Chamber of Commerce. “We need to remember that. The business community is behind that, to make sure that we provide the type of workforce that businesses need and make them want to come and locate in Florida."

The rush to the Sunshine State has abated, for now. The Florida exodus has been in place for awhile. The same is true where I live, Colorado. As long as people continue to move here, brain drain isn't a problem. A travel section article in the New York Times about Santa Fe is another example:

Countless people have followed that archetypal ramp into a new life. Santa Fe still holds out a promise of renewal, of exactly what Lawrence was looking for when he came to this area: a place that could change not only one’s external life but also one’s inner, spiritual life. “Touch the country,” he said of New Mexico, “and you will never be the same again.”

What is Santa Fe? A place of healing, since the tuberculosis sufferers started coming over a century ago. A spiritual mini-mecca for a semi-godless age. A sumptuous adobe haven for a few super-rich. A land of hope for thousands of illegal immigrants. A hothouse of talent and IQ, with an extraordinary concentration of Ph.D.’s, and more artists than any American city its size. (According to one report, 39 percent of the city’s economy is generated by the arts and culture.) On and on the list goes. It’s a city of trade and exchange, of markets, built at the crossroads of the old Camino Real and the Santa Fe Trail. Wealthy people fly here from New York to buy their Asian rugs, and opera lovers flock here in summer for the justifiably world-famous open-air productions at the Santa Fe Opera.

Rest assured, most of those Ph.D.'s aren't New Mexico natives. As for Pittsburgh, it built up human capital without a "promise of renewal" that defines the global Santa Fe beacon. Now would be a good time to remind my readers of some analysis from Federal Reserve Bank of Chicago concerning growth in the Great Lakes megaregion:

In considering educational attainment of the populations, the [table below] displays the ranks of Great Lakes metropolitan areas among 118 metropolitan areas in 1970 and 2006. The two local leaders in 1970 college attainment, Columbus, Ohio, and the Twin Cities also experienced the fastest employment growth. While Pittsburgh ranked low in college attainment in 1970, its gains in this metric since then have been the most rapid. Perhaps not accidentally, Pittsburgh’s growth in per capita income also outpaced other cities in the region.

Pittsburgh's talent dividend gains out-pace every city in this cohort, including Chicago. This growth couldn't be more organic. In-migration had almost nothing to with it. We could look at the success from a variety of angles. I'm still trying to think through all the implications. The talent dividend has been both a boon and a curse.

With such a formidable base of local talent production, imagine if Pittsburgh unleashed global ambitions as Chicago did. The region is undervalued and, given the dramatic rise in educational attainment, under-performing. I think the reason for this is the dominant image of steel. I'd bet most people who read the article about the global steel industry were surprised that Pennsylvania was not among the biggest producing states. The stereotype of a place is very powerful and can impede (or enhance) talent attraction.