Friday, July 08, 2011

Pittsburgh Versus Portland

Portland is cool. Pittsburgh is not. That's the tale of the tape. Migrants love Portland. Pittsburgh is shrinking. Via Aaron Renn's (The Urbanophile) Twitter, how the Creative Class is failing to spur economic development:

I can’t help but think that Portland’s struggling economy calls into question Richard Florida’s theory of the creative class city. I read his book years ago, so admittedly it’s not fresh in my mind, but one of his central arguments was that cities that focus on livability would be those to attract the creative class workforce, and consequently be the economic engines of 21st century America. While Portland’s reputation for livability and its creative class ethos has fulfilled the first part of that equation, it hasn’t done much in the way of invigorating our economy. One could assume that it may even be hindering it – noting that the overabundance of overeducated, underemployed, socially-minded citizens here creates a great deal of competition for few jobs and therefore also depresses salaries. (Or, as Portlandia puts it, our city is where young people come to retire.)

Portland is the poster child for indicators run amok. Amassing talent is the game and the goal. What comes next after your city goes viral?

Understanding relocation choices for a niche demographic doesn't make you an economic development guru. Modelling migration isn't difficult. The patterns of moving still follow some basic rules articulated over a century ago. Fetish destinations come and go. What will become of Portland?

About a month ago, I was still bullish on Portland. Now, I'm not so sure. Starting with the glass-half-full perspective, a story about Denver and the upside of a big company leaving town:

Doug Dwyre, president of Denver- based Mocapay, is a former First Data employee who chose not to relocate to Atlanta. He eventually joined Mocapay, which integrates mobile transaction software and marketing into merchants' long-term business strategies. In May, it launched a mobile-payment system with Denver-based coffee merchant Dazbog.

Dwyre said there was a direct correlation between First Data leaving and the upswing in mobile-payment companies in the state. Mocapay had 14 employees last year; it has 20 this year.

"It's unfortunate that First Data left Colorado, but it's good as far as fostering the entrepreneurial spirit of the folks who ended up staying in Denver," he said.

If you wanted to stay in Denver, then you had to think like an immigrant. I'll get back to the Colorado dividend in a bit. A glut of talent, for whatever reason, should spark more entrepreneurial activity. I figured that a major economic spillover from all that in-migration was just a matter of time in Portland.

I based that conclusion on my Boulder experience. Smart people flocked there en masse. Graduates from the University of Colorado hung around a few years to ski and rock climb in Eldorado Canyon. Boulder was (still is) rich in natural and human made amenities that make the community sticky.

I failed to appreciate that the regional economy was ready to absorb all that talent. Boulder is blessed with a major research university and a bunch of federal government laboratories. By comparison, the Portland boom is unsustainable. What is Portland going to do with all this excess Creative Class?

No doubt that Denver has benefited from a quality of place. Instead of moving to Atlanta, ex-employees ran through brick walls to stay. In theory, that's how catering to the Creative Class should help your city or rural community.

Then there is Pittsburgh ...

These days, "Pennsylvania is no longer part of the Rust Belt. Pennsylvania has diversified away from that manufacturing belt," said James Diffley, chief regional economist with IHS Global Insight in Eddystone.

"The diversification of Pennsylvania kept it from being another Ohio and Michigan," he said. Michigan's unemployment rate peaked at 14.1 percent.

"Diversification" has been the name of the Pittsburgh revitalization game. As for the good news in PA, it is more Pittsburgh than Philadelphia:

Forty-six of 50 metros experienced declines in job openings in June, 14 more than the previous month. The four metro areas that did not lose job openings saw insubstantial growth: Louisville (1.7 percent), Birmingham (1.4 percent), Detroit and Pittsburgh (less than one percent).

Pittsburgh is an island in a sea of economic gloom and doom, despite disregarding Richard Florida's advice. Yes, Pittsburgh is the anti-Portland. Pittsburgh is the antithesis of the Creative Class migration. Yet the Great Reset has favored Pittsburgh over Portland.


jonnygoldstein said...

Hi Jim,

I grew up in Oregon, and I now live in PIttsburgh (after stints in many other places). I always felt like Portland was lacking big anchor institutions. It does not have a single big research university, and it does not have the equivalent of Microsoft and Boeing the way Seattle, just up the interstate, has. Pittsburgh has two major research institutions, and ranks 8th in having fortune 500 companies headquartered in the region. While not the hipster mecca the Portland is, I keep meeting people who have moved here from all over the country. Portland is a very nice town, but it lacks many of the 'Burgh's advantages.

Jim Russell said...


Thanks for chiming in. You hit on the key question:

Does Portland need such an anchor? I think it does, but I'm open to exploring analogous examples that indicate Portland will be fine without it.

jonathan goldstein said...

Need is a relative term. Ever since I've been around, Portland has been thin gruel economically. But there has always been a layer of hipsters who are OK with living on a low budget. I am not a big fan, but enough people seem to like it so that Portland keeps growing. In order to be the kind of place I want to live though, Portland needs an anchor or two.

Jim Russell said...

Point taken.

The issue is Portland as a model for other cities to follow. Does the Creative Class prescription (i.e. placemaking) work?

I contend that Pittsburgh is a much better model. Richard Florida was wrong.

jonathan goldstein said...

Seattle is an interesting comparison: besides Boeing and Microsoft, they also host the University of Washington, a huge research university, right in the middle of town. And they have a big international airport. Plus Seattle has similar lifestyle perks (outdoor culture, good food and drink, cannabis culture, lots of "creatives"). The only think Portland has on Seattle is better transit.

Jim Russell said...

I've lived in Seattle (and Minneapolis). Those success stories make sense. Portland is more smoke and mirrors.

jonathan goldstein said...

OK, one last comment! It seems to me that Pittsburgh's achilles heel is that if the government stops spending as much money subsidizing higher education (via grants and student loans) and medical care (via medicare), Pittsburgh will be hit hard. In this scenario, Portland might do better.

Jim Russell said...

Pittsburgh is much more than eds and meds. There is high tech manufacturing, energy, finance, and tech (e.g. robotics).

Education and health care could take a hit, but those two industries won't collapse.

What happens to Portland if its two top sectors take a big hit?

Brendan Crain said...

This is a very interesting post, but I don't think that it proves anything about Richard Florida; when you say that "Florida was wrong," Jim, what are you referring to? What I've read of Florida's work has suggested to me that, while he argues strongly for the importance of making investments in creating a sense of place in cities and raising the quality of life (distinctly, and importantly, as a counterpoint to the argument that cities should focus solely on basic services and infrastructure), he is not suggesting that bike paths and scenic vistas alone will create economic growth.

Jim Russell said...


Thanks for your comments. I read Richard Florida as recommending urban amenities and placemaking to retain the Creative Class. The theory is extended to attraction as a result of some flawed reasoning. That's an argument for another post.

The central question for this post concerns the linkage between amassing Creative Class talent and economic development.

Winning the war for Creative Class talent achieves what for your city?

Dan said...

Jim, I think this might be of interest to you. Yesterday I read a post on BoingBoing about the protractor phenomenon developing in Pittsburgh. The comments on the post are funny and interesting but these comments stand out:

"Well, chalk up another one in the "Pittsburgh" column. My better half and I keep discussing where to take the kids next time we make a road trip. In four hours, we could be in either New York or Pittsburgh." ~ Gyrofrog

"As someone who lives in New York but took a road trip to visit Pittsburgh for our family vacation a couple summers ago (and had a great time), I say you should do both!" ~ Micah responding to Gyrofrog

"@Crashproof. I agree. The authorities calling it vandalism are a bunch of squares. They should try looking at things from a different angle. Guerilla art complements the city environment for a right-eous experience. See, Pittsburgh used to be dumpy, but it has been improving by degrees and IMHO now glows with charming radians." ~ Anon.

Lots of good PR resulting from this I think. Here's a link to the BoingBoing post:

Jim Russell said...


Thanks for the heads-up. My brother sent to me a link to the same post a few days ago. I've been meaning to blog about it. But I won't be able to get to it until next week.