Great Recession Irony: Peak Labor Force Pittsburgh

My education in labor economics continues. While I blog about talent migration and workforce development, I'm no expert. Not even close. I write in order to learn about Rust Belt challenges and think about a productive way forward. Along the way, I've had to do a lot of reconciliation between my impression of the Rust Belt and the economic landscape stemming from various indicators. I make one ironic discovery after another.

I see a battle of two contrasting narratives. Next American City interviewed Bruce Katz and he makes the same point. The Rust Belt image is dominant. But take a closer look and what you find is a "Brain Belt". We'll see if that sticks. After Blue Belt (i.e. Great Lakes) and Green Belt, I'm skeptical that it will. Katz keeps trying.

Someone else who keeps trying (in less blunt terms) is Chris Briem. In almost every post, he challenges the popular perception of Pittsburgh. Today, he offers a stellar example:

BUT... what nobody seems to have noticed, not even the state itself, and what is something I need to think about a lot more... the county for the region's seasonally adjusted labor force in January came in at 1,240,100. If that is a robust number (by that I mean it does not get revised too much in coming months), I think it is the single largest count for the labor force in the region in the last 40 years... which is all I keep track of. I am pretty sure that would make it the single largest labor force count in the region's history.

Peruse the comments and you'll notice that I confused "labor force" with "employment". I misunderstood the historical profundity of the labor force number. Chris later added a graph that dramatically altered my perception of Pittsburgh.

Many things stand out to me. First, I'd note the steep rise in labor force during the latter half of the 70s. The exodus of the early 80s bottoms out in 1985 at what appears to be a 1974 level, wiping out all the gains later in that decade. By 1992, the workforce has recovered. Not exactly shrinking city, is it?

Considering the economic cycles, the Great Recession is remarkable in its lack of impact on the labor force numbers. Where's the crash? Perhaps that is indicative of the decline in geographic mobility occurring nationally. But that doesn't explain the increase, the historical high. More people in the Pittsburgh region are part of the workforce than ... ever. Pittsburgh is growing.

As Chris speculates, the likely culprit is energy. The Trib with an article that might shed further light on the surprising numbers:

Hill Group associates talked to representatives from industry, education, trade groups and other areas to compile the study. Discussions focused on what the stakeholders believe are growing industries, and their priorities for those industries.

The study concluded that employment in energy will grow fastest, but health care will generate the most new jobs. Financial services and insurance will grow, but only to recover lost employment during the recession, said the study, which didn't give projections.

"The study's findings make a lot of sense," said Range Resources Corp. spokesman Matt Pitzarella. The Fort Worth-based company is a major player in drilling natural gas wells in the Marcellus Shale areas in Western Pennsylvania.

Pitzarella said there's a logical melding between the gas industry and manufacturing, because many manufacturers run their plants with the fuel. "Our industry uses state-of-the-art technology, so it makes sense that people with a natural gas and IT background would be well suited" for jobs, he said.

In a nutshell, there you have the workforce development challenges. A lot of that talent will come from Texas, Oklahoma and Colorado. I've noticed a growth in hits on my blog from those states, often concerning relocation.

Members of the Burgh Diaspora should read the article. It spells out the looming labor force shortages and how you might horn in on the action. Also, I hope that economic development wonks in neighboring communities (e.g. Youngstown and Erie) are paying attention.

Perhaps the labor force won't continue its spiky trajectory. But I don't see much of a chance for a collapse, either. I still think Calgary-like growth is in the cards. The only thing standing in the way is Hell with the lid off:

Anyone who remembers The Deer Hunter will know what Pittsburgh looks like: a gloomy rust-belt city, belching fire and fumes from steelworks, and home to a rough-hewn, working-class, six-pack culture. At the time of Vietnam, in the 1960s, it was already sliding into what looked like terminal decay. ...

... Returning to Pittsburgh, I reflected on the American talent for making a fortune in nuts and bolts and spending it on something grand. But first you have to find the dollars, and I remembered the mayor's prediction that property prices (very reasonable) were going to soar once the new convention centre was finished. I had seen a place in The Strip that would make a great bar, and I wondered whether I should try to raise a few thousand bucks. I already had a name for it. The Beer Hunter.

Still waiting for the mayor's prediction to come true.