Wednesday, August 01, 2012

Teasing Out Pittsburgh's Boom

Update: Pittsburgh Today has a great graphic that helps to put peak labor force Pittsburgh in a national context:

End Update

In absolute terms, Pittsburgh's population numbers still look sluggish. Fair to say that the metro has stabilized, the long decline arrested. But is Pittsburgh booming? If so, where are the migrants?

Regarding the first question, I did a blog post for Area Development last summer to help promote the magazine's "Leading Locations" rankings. Pittsburgh did well, which might have surprised the editors. The 2012 version is now out. Looks to me like the criteria has changed. Pittsburgh is 12th overall and 3rd among big MSAs (population over 600,000). Only San Jose and Austin rate better. The write-up:

Shining brightly on a wide range of measures, the Pittsburgh area made it through the recession remarkably well, with employment growth among the best in the nation across the last three years as well as a five-year span. It’s an incredible turnaround from the economic woes of about three decades ago, and what was once an economy that relied heavily on steel has been diversified with a focus on innovation, including in the energy sector. Just one example is the decision in March 2012 by Shell Oil to build a multibillion-dollar ethane refinery near Pittsburgh, promising some 10,000 industry jobs and about that many construction jobs. Meanwhile, the area is also home to Westinghouse, where thousands of jobs are linked to commercial nuclear energy.

Some of the biggest employers in the Pittsburgh area are in health care, education and government, and nearly 18,000 jobs are supported by financial giants PNC and Bank of New York Mellon. And steel certainly hasn’t gone away, as United States Steel Corp. remains a major local employer. The region’s successes have attracted the attention of the U.S. Chamber of Commerce, which in July 2012 hailed Pittsburgh’s job growth as exceeding the national average. As for quality of life, Farmers Insurance Group in late 2011 ranked Pittsburgh the safest big city, and The Washington Post in early 2012 hailed it as the new “In” city.

The economy is booming. The local supply of talent can't keep up with the demand. Pittsburgh should be pulling in the workers from elsewhere. I expect to see confirmation of the inmigration come Census 2020. Meanwhile, we have to look for clues:

And just in case we are lacking a resident labor historian I will point out one last little observation. Compare the rates at which Pittsburgh's labor force was growing in the 1970's and what has been the trend the last few years here. Comparable periods? There was this minor social phenomenon called the 'baby boom' that resulted in more than a few people entering the workforce mostly in the 1970s. I think we can all rest assured on the assumption that there was not some secret ramp up in births in Pittsburgh 20 years ago that is responsible for what is going on now. 

Historically-speaking, Pittsburgh's labor force is peaking and trending ever upwards. That's not a function of more births than deaths. It must be migration. Nationally, the labor force is shrinking. Pittsburgh is exceptionally positive (see all of the above), instead of its usual exceptionally negative.

The evidence isn't definitive. Quantifying the migration to Pittsburgh is hard to do. Even with IRS data, a lot of relocation can fall into the cracks. If there's a better measure than labor force, I don't know what it is. Suggestions are welcome.

1 comment:

Allen said...

I'm curious about the population numbers, too. I've paid some attention to the oil boom in North Dakota ( geeky interest + family + ND rules ). It seem like for all the growth the population numbers weren't matching up with the number of jobs, number of wells being drilled, lack of vacancy for hotels, rises in rents, et al.

I poked around a bit and I suspect it has to do with how the census bureau tracks these things. They seem to do things like assume the growth for every city in a county is the same, et al.

I'm sure you're in better position to understand these things but I think for short term changes, less than 10 years, we need to look to other sources for growth and see how population changes correlate with them.