Is Pittsburgh Turning Japanese?

If demography is destiny, then Pittsburgh is screwed. Reading the tale of Japan's economic woes in the New York Times had me wondering if Southwestern Pennsylvania was heading down the same path. Mainly, I am concerned about the aging population and lack of immigration. The story of demographic transition:

The connection between a society's wealth and its demographics is cyclical. At first, with fertility declining and the workforce aging, there are proportionately fewer children to raise and educate. This is good: It frees up female labor to join the formal economy and allows for greater investment in the education of each remaining child. All else being equal, both factors stimulate economic development. Japan went through this phase in the 1960s and 1970s, with the other Asian countries following close behind. China is benefiting from it now.

Then, however, the outlook turns bleak. Over time, low birth rates lead not only to fewer children, but also to fewer working-age people just as the percentage of dependent elders explodes. This means that as population aging runs its course, it might well go from stimulating the economy to depressing it. Fewer young adults means fewer people needing to purchase new homes, new furniture, and the like, as well as fewer people likely to take entrepreneurial risks. Aging workers become more interested in protecting existing jobs than in creating new businesses. Last-ditch efforts to prop up consumption and home values may result in more and more capital flowing into expanded consumer credit, creating financial bubbles that inevitably burst (sound familiar?).

The part that stands out to me is the increasing numbers of females in the workforce and less children to educate. That reminds me of Pittsburgh's recent history and the impressive gains in educational attainment. The region is, demographically, akin to China and on the road to becoming Japan (the second paragraph). The analogy isn't perfect, but the stated risks are palpable.

The wildcard is immigration. Japan's xenophobia is infamous. So is Pittsburgh's parochialism. I think either could be overcome. I'm not sure that's a practical solution. From the above article about global demography:

The trick will be restoring what, in the days of family-owned farms and small businesses, was once true: that babies are an asset rather than a burden. Imagine a society in which parents get to keep more of the human capital they form by investing in their children. Imagine a society in which the family is no longer just a consumer unit, but a productive enterprise. The society that figures out how to restore the economic foundation of the family will own the future. The alternative is poor and gray indeed.

Demography Matters is skeptical of the proposed policy avenue. I'm optimistic for reasons likely unintended or unconsidered by the author. The issue is framed as a brain drain from the family. What's the return on investment? This is how communities think. For example, Louisiana:

While other states think of development in terms of research centers and technology, Louisiana approaches it in terms of third-world labor. Sutherlin observed that two recent development projects here include $50 million for a chicken-plucking plant and $40 million to make sweet potatoes into French fries. Governor Jindal's office released a letter last year in which it was argued, astonishingly, that we're over-educating people for the Louisiana workforce, a workforce that should apparently consist of chicken pluckers and fry-chefs. Some legislators think the way to reduce high school dropout rates is to reduce high school math and English requirements. Others think that because college graduates leave the state, we should produce fewer college graduates and not train the ones we do produce to the point that out-of-state employers would want them. TOPS, a state scholarship program for our best students, is in budget-cutters' cross hairs. My university has eliminated programs in chemistry and physics, among others, as its budget has been cut nearly in half over the last three years. Who needs science, anyway? Not chicken pluckers. Mathematics was on the chopping block (math!), excessive numeracy being something we want to avoid.

Polemics aside, metros and states essentially make the argument that we shouldn't invest in education when they talk about brain drain. If sending more educated adults out into the world to succeed had greater returns for the homeland (i.e. family), then we would have more children. We'd invest more in human capital. Convincing people who have no kids in the area to pay more taxes for schools is a tough sell. The typical response is Border Guard Bob. Obviously, Bob isn't a game-changer.

Diaspora networking is a game-changer. We can't afford to ignore the demographic and economic opportunities embodied in expatriates. That doesn't mean giving up on increasing immigration to the region. On the contrary, it means using the diaspora to attract foreign born talent. Appropriately, China has the same potential. Its best and brightest are scattered all over the world. That talent migration is a check against graying of the country. Both China and Pittsburgh are fortunate to have such an asset.