Monday, January 28, 2013

Pittsburgh Isn't Dying

Aside from a few metros in Texas, you would struggle to find a place doing as well as Pittsburgh. This fact is hard for the libertarian crowd to swallow. Taxes are high. Pennsylvania isn't a right to work state. The population is in decline. I expect Jack Welch to rush in at any moment and claim the federal government is cooking the books. Reluctant confessions from the Allegheny Institute for Public Policy:

In terms of job growth, the Pittsburgh region‘s long-dominant education and health care sectors have a new challenger: professional, technical and financial services, recent employment data show.

“Eds and meds” institutions still employ the biggest slice of the seven-county region‘s 1.18 million jobs, say economic experts, but “pros and techs” are gaining.

“The leadership in job growth has changed from eds and meds to financial services and professional and technical services,” said Jake Haulk, economist and president of the Allegheny Institute for Public Policy, a think tank in Castle Shannon.

Eds and meds isn't the only game in town. Along with the tech boom, there's a glut in financial services job openings. Heck, according to the same article, there's a glut in eds and meds job openings. Pittsburgh is hiring!

The rub is that the local labor supply can't keep up and all those naysayers have built up a formidable barrier to inmigration. Pittsburgh is on the national mental map, in a negative light. The city is in the Rust Belt. It is dying. That puts an upward pressure on wages, which is a lot scarier to a business than the red herring of high taxes.


Allen said...

I'm not sure why you're going for the HAH! So There! approach when it comes to PIT job growth. I don't know of any academics that would that higher / lower taxes is an absolute and works magic consistantly across the board or causes evenly spread harm. California's policies went off the deep end decades ago. That hasn't prevented Silicon Valley from having high job growth periods.

Also, right to work is a conservative issue, not libertarian. Many if not most Libertarians oppose the idea of Right To Work. Milton Friendman explains it best, IMHO.

In fact, it looks like there's something recent here

Jim Russell said...

Through the years here, I've cited a lot of "research" coming out of libertarian think tanks. One theme is using state tax regime to explain migration. The analyses are crap, like almost everything else coming out of libertarian think tanks.

The Reason piece you reference details how libertarians used to condemn right-to-work laws. As in, "It’s not widely known, but an earlier generation of libertarians condemned so-called right-to-work laws as anti-market."

The libertarians today don't realize they are promoting anti-market policies. Not exactly shocking news.

Tom Mc said...

I think your thesis is accurate as well as the lower taxes and right to work yield more jobs. The difference is quantifying the jobs.

Commodity or low margin business needs lower taxes and better negotiating with employees. Higher margin businesses can work in areas with higher taxes and unionized workforce.

Generally, there are not many engineers, writers or sellers in Software or Finance people that desire to be part of a union. If they do they are in lower margin business and most likely manufacturing or production where it is hard to differentiate ones contribution to the business.

Since Pittsburgh has been trying to position itself for higher paying jobs using the universities, right to work doesn't matter in the whole scheme of things. It may play a role in my there are only 2-3 grocery chains in the region with a large active union presence. NJ has union groceries, but they are very fractured. Cashiers, grocers, etc. My understanding Pittsburgh, it is one that handles all. Boy would I love to have another option then Giant Eagle.