Thursday, March 29, 2012

Stubborn Pittsburgh Mesofacts

Post-industrial and distressed Pittsburgh won't go away. The shale energy boom is the latest culprit. Poetically, the shale boom will also put to rest a myth that has kept migrants (domestic and international) at bay for at least a two decades. The uncritically repeated job creation story:

Early production results from Ohio’s Columbiana, Carroll, Harrison, and Belmont counties show the first completed wells are capable of producing millions of cubic feet of gas and more than 1,000 barrels of oil a day. Families are signing drilling leases that pay up to $5,800 an acre. Nearly $2 billion in new gas processing facilities have been announced for sites in the Ohio River Valley. The economy of the 145 miles of river from Pittsburgh to Marietta, for two generations a laboratory of industrial ruin, is perking up.

Emphasis added. The economic growth tied to the Marcellus and Utica shale plays is credited with the revitalization of this part of the Rust Belt. Outside of the City of Pittsburgh (e.g. Washington County), the case is strong. The overall Pittsburgh metro is a different kettle of fish. The latest Gallup Job Creation Index:

Oklahoma City, Okla., had the highest score on Gallup's Job Creation Index among the 50 largest U.S. metro areas in 2011, followed by Pittsburgh, Pa., and several Southern metros. More than one in three workers in each of the top-performing metro areas said their employer was hiring or expanding the size of its workforce, but Oklahoma City led because of the relatively low percentage of workers (12%) who said their employer was letting workers go or decreasing the size of its workforce. ...

... The results are based on Gallup Daily tracking interviews with U.S. workers conducted from January-December 2011. Gallup interviewed at least 698 respondents in each of the 50 largest metro areas in 2011, including 1,000 or more in 38 metro areas. Nationwide in 2011, an average of 31% of U.S. workers said their employer was hiring, while 18% said their employer was letting workers go, for a U.S. Job Creation Index score of +13.

The top-performing large metro areas have above-average hiring levels combined with below-average levels of letting go, resulting in high Job Creation Index scores.

Pittsburgh is the #2 metro for 2011. All hail the Marcellus Shale? No, not even close. You can find the foundation of Pittsburgh's job creation surge here. "Colleges, universities, and professional schools" dominate the economic landscape. This didn't happen overnight. Laboratory for industrial ruin? That's a stock narrative, a mesofact. But the hype surrounding the Marcellus and now the Utica Shale will bring a welcome spotlight to the dramatic turnaround in Pittsburgh.

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