Monday, April 27, 2009

Rust Belt Collective

Not that they couldn't have found a similar opportunity in their own backyard, two brothers from Greensburg, PA are now champions of Detroit, MI:

Inspired by a 20/20 episode that highlighted Gina Reichert and Mitch Cope's Hamtramck house project, Ian Perrotta and his brother hopped in their car and drove from Greensburg, PA -- that's about 45 minutes outside of Pittsburgh -- straight to Detroit. Within a week, they had purchased five homes in Detroit just outside of the Hamtramck city limits.

Perrotta, a recent college graduate and member of the Greensburg Volunteer Department Hose Company #8, has experience with construction and salvage, but realized that five homes was a lot to take on. So, the brothers formed Habitat for Hamtramck. The organization is intended to promote the endeavor, draw in volunteers and funds, and keep all project finances transparent. Their web site will "serve as kind of a reality TV show to show how easy and feasible the task that I had set forward to accomplish was," Ian Perrotta says.

Hopefully, Team NEO is paying attention.

Coolest Part of Cool Pittsburgh

Just in case I have a few readers who don't follow Chris Briem's blogging at Null Space, Richard Florida hearts Lawrenceville:

Florida, director of the Martin Prosperity Institute and professor of business and creativity at the University of Toronto’s Rotman School of Management, knows Lawrenceville well. Before decamping to Canada he was on the faculty of Pittsburgh’s Carnegie Mellon University. He did the research for the book that made his name, The Rise of the Creative Class there, and he thinks Lawrenceville – with its inexpensive housing stock, growing number of restaurants, bars, arts outlets and specialty shops – has what it takes to attract and keep precisely the type of people he describes in that book – the designers, engineers, technology workers and artists he sees as the drivers of contemporary economic growth.

Chasing my spouse-to-be, I lived in Pittsburgh for a few months during 1997. At that time, the Strip District was rapidly gentrifying, but Lawrenceville wasn't really on the map. The neighborhood is now a creative hotspot, artists and entrepreneurs mingling at the lively eateries now well established along Butler Street. The transformation, still in progress, is impressive.

It's not too late to move into Lawrenceville. The Allegheny River waterfront is targeted for beautification and rehabilitation. Once that is done, good luck affording a residence there. The better housing stock is already pricey, at least for Pittsburgh. A few years ago, I recall reading some city booster publication touting Lawrenceville as the next Williamsburg (hipster neighborhood in Brooklyn). That seemed like a big stretch at the time, but I've been to pre-cool Williamsburg (I was in NYC for a geography conference in 2000). The artist vanguard was already evident, but the scene was just getting started. When I think about that Williamsburg, the comparison is apropos.

Lastly, the article about Lawrenceville is in the Financial Times. Talk about putting Pittsburgh on the map, let alone Larryville. The light is most flattering. Let the influx begin.

Lies, Damn Lies, and Michigration

Texas has it bad. Real bad. Brain drain, that is:

Studies show that Texas does, in fact, export more students than it imports. In 2006, Texas suffered a net loss of nearly 8,000 college freshmen, according to the nonprofit group Postsecondary Education Opportunity. That's a big change from 20 years ago, when Texas imported several hundred more college students than it exported.

That's one way to spin it. The brain drain pitch depends on your favored boondoggle. In the Texas case, some folks want to do away with current admissions formulas which favor students in the top 10% of their instate high school class. The real threat is that locals are leaving the state to get a college education. Never mind that Texas attracts plenty of the college educated. They're foreigners! (i.e. not from Texas)

Michigan must roll its eyes when reading about Texas out-migration woes. But that's hypocritical. Michigan overvalues its natives just like Texas does. Like Georgia does. Like every state does, regardless of what the data might say.

Previous attempts to investigate brain drain myths are now the subject of ridicule. The target of my own lampoon crusade are the chicken littles crying about the young talent leaving. Like in so many other Rust Belt states, that's not the issue:

That's the opinion of state demographer Ken Darga, the state's leading authority on Michigan's population by the numbers. He said Michigan has retained college graduates better than most states, even as the recession worsened.

But since 2004, far fewer young college grads from other states have moved to Michigan than in previous years, creating a net loss. The number of those leaving Michigan actually has leveled off.

"The brain drain is a very serious concern," Darga said. "The big misunderstanding is that it's a chronic problem. It's not a chronic problem. It's a fairly recent development."

Let me repeat the highlights.

"Michigan has retained college graduates better than most states."

"The number of those leaving Michigan actually has leveled off."

"Far fewer young college grads from other states have moved to Michigan than in previous years."

Texas, go ahead and roll your eyes at Michigan. Michigration is still misinformation. Talent attraction is still the only game in town.

Saturday, April 25, 2009

Pittsburgh Mistakes Inform Troubled Hamilton

Hamilton, Ontario is mulling over two trajectories, Buffalo or Pittsburgh? That's not to say Pittsburgh has done everything right. Former Pittsburgh mayor Tom Murphy confesses:

Murphy's message to Hamilton political leadership is blunt. Don't wait for the steel mills to close permanently before taking action, he says.

Murphy admits his administration was too slow to respond to Pittsburgh's shrinking tax base and the budget crisis it caused. A plant closure has a cascading financial impact not only on tax revenue but also on water and hydro income and on social service expenditures.

He tells Hamilton leaders to be brutally honest now with all stakeholders about the shared sacrifices that will necessitate.

He recommends a formal partnership between U.S. Steel and the city to establish firm commitments to transfer ownership of any lands deemed surplus and to contribute to a tax stabilization fund and assist with retraining of former steelworkers at Mohawk College.

Murphy says our city council needs to have the courage to talk now about a post-industrial Hamilton, focused on a more entrepreneurial culture and less on big corporations and big unions.

Staying focused on the negative, Murphy's plan for downtown revitalization has a number of critics. Furthermore, Murphy remarks on the numerous advantages Hamilton has over Pittsburgh:

He also points to our proximity to the [Greater Toronto Area] with its growing population base and a relatively robust regional economy -- unlike Pittsburgh and its surrounding region, which continues to lose population.

Pittsburgh still has a lot of strikes against it, making the recent modest success all the more impressive. If the region could address even a few more of these shortcomings, then more robust growth might be unleashed. But the eastern part of the US Rust Belt doesn't have a Toronto nearby or, like the western half, a Chicago.

Given the Detroit tailspin, many shrinking cities (including Cleveland) are dependent on the latest Pittsburgh renaissance. As for Pittsburgh, its own progress hinges on its relationship with the DC area. Revisiting the high-speed rail geography:

Cleveland is placing a bet on better connectivity with Chicago. The same is true for Detroit. Pittsburgh and Buffalo are decidedly east coast oriented. This tells me that no one expects another Chicago miracle. The US alpha world cities are, by and large, set.

Chicago's reach is overstated. Rust Belt East should plug into the Bos-Wash megalopolis. If Pittsburgh does so successfully, then Cleveland investment in Chicago would be a huge mistake. Right now, Cleveland is intent on going it alone. That's bad news for Pittsburgh, Detroit, Toledo, Erie, Columbus, and perhaps even Buffalo.

The lesson for Hamilton is that parochial political geographies are the primary barrier to economic redevelopment. Toronto isn't competition, but the greatest regional asset. Don't pull a Cleveland.

Thursday, April 23, 2009

Real Estate Market Pittsburgh

For the "best bad news around" file:

Home sales in seven major Northeast cities recorded declines of 15 percent or more in March, while median prices continue to fall across the region, except in Pittsburgh, according to The Associated Press-Re/Max Monthly Housing Report, also released Thursday.

The report analyzed sales transactions in nine Northeast metropolitan statistical areas filed by all real estate agents, regardless of company affiliation.

Pittsburgh recorded the worst sales drop in the region, plunging more than 35 percent in March from the year before. However, the median price edged up 1.5 percent to $118,750, the best performance in the Northeast. The number of homes for sale dropped by nearly 21 percent year-over-year.

"A lot of people are holding off from listing (their homes for sale) this year," said Liz Caplan, a Coldwell Banker real estate agent.

More data points suggesting people are hunkering down for the recession, but that demand for property continues to be relatively strong in Pittsburgh.

Geography of Recovery

The above map can be found here. Such projections are useful for anticipating the latent economic migration that will inevitably occur once the recovery begins in earnest. Right now, Americans are staying put, as evident in the Central Ohio region. While not the worst, the forecast for Pittsburgh's future is cloudy.

Before discussing the Rust Belt picture, I want to visit the concept of latent migration. Increasing geographic mobility will lag behind the economic recovery. As news of metros returning to "peak employment" diffuses, workers will start thinking about relocation. These early migrations will continue long after the job the market cools, as evident in Charlotte, NC:

Two years ago, James and Cynthia Kwolyk put their Connecticut home on the market. Their goal: Move to Charlotte with its milder weather and nearby relatives.

Then their house sat, waiting for a buyer. The family still moved – even though the house didn't sell for 11/2 years, and they had to drop the price $100,000.

Charlotte owes much of its prosperity to newcomers willing to pull up stakes and gamble on opportunity here. ...

... In Charlotte, UNCC economist John Connaughton said, it's difficult to estimate what the city's unemployment level would be if newcomers weren't moving here. But, he said, the state's March unemployment rate of 10.8 would be at least a percentage point lower if North Carolina weren't growing so fast.

In Austin, some residents worried about the stream of newcomers when the dot-com bubble burst in 2000. The city's population had leapt from 800,000 to 1.2 million during the 1990s, fueled by the city's mild climate and abundant technology jobs. When the tech jobs dried up, residents complained about increasing home prices and worsening traffic as people continued to move in.

Even as other labor markets heat up after the Great Recession, people will still risk everything to move to the initial hot spots. Much of the late-arriving talent must be very resourceful in order to make their gamble pay off. Thus are born, folks determined to stick, the next round of job creators for Austin.

The regions that return to peak employment the earliest, such as Indianapolis, have a chance to become the next big talent magnet. As for Pittsburgh, we might see a strong out-flow to DC and Columbus, OH. Pittsburgh's recovery is expected to be as late as can be without being indefinite. That might have something to do with the late start of the downturn. I expect it has more to do with the still-substantial manufacturing sector. Also, job creation has been sluggish at best, even in good times.

Did the recovery projection take into account demographics? I ask because Western Europe is looking at an acute talent shortage thanks to an aging population. Pittsburgh looks a lot more like Europe than the rest of the United States. I'm anticipating more jobs opening up thanks to attrition. Labor demand, particular in the highly-skilled trades, should be quite strong sooner rather than later:

My wife works for The Bank Formerly Known As National City, whose white-collar Cleveland workforce mostly faces the prospect of either finding other work or moving to Pittsburgh (PNC). I like my job, but we can't afford to get caught without options.

The word is getting out about Pittsburgh. Once the will to move returns, I bet Pittsburgh will be on the radar. But that's no reason to ease up on the PR campaign.

Michigration Nation

Where are Michigan graduates going? More at the end of the post on why that's the wrong question to ask. The mains for brain drain plumbing:

The top 10 places to which Michigan is losing young people are Illinois, California, New York, Ohio, Texas, Wisconsin, Washington, D.C., Washington state, Minnesota and Virginia, said David Waymire of Martin Waymire Advocacy Communications in Lansing. Waymire works closely with Michigan Future and the Presidents Council State Universities of Michigan in Lansing.

Looks like a typical out-migration profile for many states, save the Rust Belt destinations of Ohio, Wisconsin, and Minnesota. Young professionals from around the country are concentrating in the DC region, NYC, LA, SF, Chicago, Seattle, Dallas, and Houston. Michigan isn't going to offer a viable alternative to those urban offerings.

The talent churn between brain drain states such as Michigan and Ohio is of particular interest. Yesterday, readers of the Detroit daily newspapers were introduced to the mayor of Braddock, John Fetterman. Is Braddock trying to poach Michigan energy companies? Fetterman claims otherwise:

"Just the opposite ... we're brothers and sisters in struggle," Fetterman said. Keith Gaby, spokesman for the EDAF, said he could see why Michiganders might view the ad with skepticism.

"We used him because he's just a very charismatic guy," Gaby said. "We don't expect it to help Pennsylvania any more than it will help Michigan or Utah. This is all about green jobs."

The idea that one shrinking city is pitted against another is absurd. If the green economy blossoms in the Rust Belt, both Flint and Braddock win. New pathways of in-migration will be built. The ad campaign is how we might re-imagine and rebuild our urban infrastructure.

Missing from the brain drain article (and the discourse about the concentration of talent) is where college graduates are moving from to end up in Michigan. What could be done to improve the in-migration from states outside of the Rust Belt? That young professionals move between neighboring states is to be expected. But engineering an increase of relocation from distant talent production centers such as Los Angeles would be a clear indicator of success. But Michigan cannot accomplish this on its own. Only a coordinated and coherent interstate mega-region could.

Wednesday, April 22, 2009

Relocate To Pittsburgh

Dallas-Fort Worth is tooting its own horn:, a Web site that provides people who are moving with local information, released its rankings of the most desirable cities to live in, and Dallas-Fort Worth managed a strong second-place showing. Tulsa earned the top spot.

The Web site’s president, Steve Nickerson, said that this year’s crop of cities stood out in their outlook for growth and their ability to rebound quickly from the economic troubles, which were the primary measures this year.

Not surprisingly, the top 10 is weighted heavily with Southern and Southwestern cities — only one was from a Northern state. And except for the Texas showings of Dallas-Fort Worth and Houston, the list favored midsize cities.

Pittsburgh; Raleigh-Durham, N.C.; Huntsville, Ala.; Houston; Albuquerque; Lexington, Ky.; Little Rock; and Oklahoma City rounded out the top 10.

Indeed, Pittsburgh is quite the outlier in that group. You can read the Pittsburgh profile here. I get the sense that RelocateAmerica has a substantial stake in the local real estate market.

Tuesday, April 21, 2009

Regional Immigration Policy for Pittsburgh

Check out the good news here. The KDKA report has interviews with local immigration boosters such as Vivisimo CEO Raul Valdes-Perez and Pittsburgh Technology Council President/CEO Audrey Russo. There's a print version of the story here:

According to the Pittsburgh Technology Council, there are 1,900 unfilled engineering and technical jobs in the region which they say could be filled by new immigrant residents if visa restrictions were lifted.

"If we don't attract and retain people who are foreign born, the work is going to get done somewhere else. It is and it's not going to be here. And if it's not going to be here, we're not going to be able to thrive," Audrey Russo, from the PTC, said.

The immigration debate is heating up again nationally with the Obama administration vowing to take the issue head-on.

Locally, the mayor and chief executive are meeting with immigration groups to craft a new regional policy towards immigration.

It's about time ...

SMaSh-ing Success in Pittsburgh

Update: The Trib is running an article about SMaSh and Mark Cuban.

I just saw the following
tidbit in the Washington Post:

Pittsburgh-based SMaSh Technologies has raised a $1.35 million round, led by Mark Cuban, the billionaire who owns the Dallas Mavericks and is chairman of HDNet. Also participating in the round was a seed-stage investment group, Innovation Works of Pittsburgh, and Dr. Ihor Lys, who was named 2008 National Inventor of the Year by the Intellectual Property Owners Education Foundation.

More information available here:

“I am also excited to back SMaSh as a Pittsburgh-based startup, it’s a region with many advantages and I’m excited to help grow the company there,” said Cuban.

And another piece of good news from TECHburgher:

Techburgher absolutley loves getting news of smart people returning back to the region with their companies in tow. After four years in Florida, Alan S. Koch decided to return to western Pennsylvania, and he brought his company ASK Process with him. The Kochs grew up here, and love the four seasons – including winter. So they were eager to leave the heat, humidity and hurricanes of Florida behind.

“My wife and I started out here too many years ago to admit to,” says Alan. “And while family was a strong draw for us personally, this area is a great home base for my business as well!” ASK Process provides consulting and training services to organizations all over the world. But most of their clients are in the Eastern U.S., making Western PA a convenient central location. “Almost any location in Pennsylvania, Ohio or New York is an easy drive from here,” says Alan. “And if I want, I can drive to my most important business centers; Chicago, New York, Philadelphia, Baltimore, and Washington DC.”

That's the kind of boomerang migration the region needs. Two great Burgh Diaspora stories.

Where The Jobs Are 2009

Update: Chris Briem zooms in on Port in the Economic Storm Pittsburgh.

According to Ajilon Professional Staffing research:

1. Madison, Wisconsin
2. Washington, D.C.
3. Boston, Massachusetts
4. Richmond, Virginia
5. Milwaukee, Wisconsin
6. Pittsburgh, Pennsylvania
7. Baltimore, Maryland
8. Seattle, Washington
9. Houston, Texas
10.Dallas, Texas

Of late, I've read a lot of good things about Madison. Ann Arbor sees the home for Wisconsin's flagship public university as a positive role model. I'm also glad to see Milwaukee getting more positive press. I'm almost as bullish about Milwaukee as I am Pittsburgh.

Monday, April 20, 2009

Can Steubenville Save Cleveland?

Richard Longworth turned up in my morning news sweep. He spoke at the Small Cities Conference hosted by Ball State University. Longworth offers a reminder to cities such as Cleveland that globalization demands a change in the traditional way of thinking:

The good news, he said, is that most small cities are no longer in denial; they have stopped thinking that the industrial era will last forever.

Longworth offered some answers: new technology, including green energy like wind, solar and biofuels; community colleges that teach 21st century skills; communities like Steubenville, Ohio, that are willing to link to big cities, even those like Pittsburgh that are in other states; embracing immigrants and public transportation like high-speed and light rail.

"I'd like to see this Midwest region take a truly regional approach to its problems and solutions," Longworth said. "Some of the Midwest's tired old towns and cities may not survive in any real sense. But those that do won't do it by relying on their own dwindling resources, by staying proud and independent, by refusing cooperation with other towns and cities.

"The Midwest today remains not a singular coherent region but a Balkanized collection of political and economic fiefdoms based on the states. These Midwestern states have everything in common but they are trying to fight this battle on their own, and they are simply too small, too outdated and too parochial to do the job."

Cleveland leadership is still stuck in the industrial era and the surrounding region is being punished as a result of this shortsightedness. On its current track, Cleveland will fail. The stubborn parochial rivalries will make sure of that.

Sunday, April 19, 2009

Michigration Watch

(Via The Urbanophile) I must admit that I find the coverage of the Michigan brain drain crisis fascinating. Journalists feed the hysteria, instead of informing their readers of the challenge before them. The title of this Detroit News article is "Retain grads, experts warn":

"If Michigan doesn't have sufficient human capital, we will not recover when this recession ends," said Don Grimes, senior research specialist at the University of Michigan's Institute for Research on Labor, Employment and the Economy.

The report, written by Grimes and Lou Glazer, president of Michigan Future Inc., is the second annual assessment of how Michigan is moving from a low-education economy dependent on high-paying factory and automotive jobs to a broadly diversified knowledge-based economy focused on more than making cars and trucks.

Michigan Future promotes the belief that until the state can attract a growing pool of educated workers who can attract new businesses, the state will lag the nation for years to come as auto jobs pay less or disappear altogether. ...

... How to attract -- or keep -- college graduates and educated workers should be the No. 1 issue for the state, including the next gubernatorial election, Glazer added. Not only because of the loss to the current pool of workers, but because those who've left will raise the next generation of Michigan workers elsewhere.

Keep? Nonsense. The latest report from Michigan Futures highlights the geographic mobility of college educated talent:

What stands out is the difference between college educated and non college educated movers. First college educated adults are about 27 percent of the population, but are about 38 percent of the movers. Second they move to different places. Except for Hartford and New Orleans, the high prosperity metropolitan areas are places that are substantially adding to already large concentrations of college educated adults. And in most cases college educated movers account for more than half of their net in migration. In metro New York, Washington, Boston as well as Chicago and Pittsburgh – all of which did well in attracting college educated adults – there was a net out migration of non college educated adults.

Retaining graduates can help to increase the concentration of knowledge workers. That's obvious. But the main thrust is attracting talent, attracting business. The newspaper headline feeds the common misperception that stemming the exodus of young professionals from the state is mission critical. At the very least, attraction strategies deserve equal billing.

The Detroit media is on the defensive:

"Have you EVER wrote a positive article," asked Joe Plonka.

"Sure," I replied. "Many times. S'pose I could mount a cheer and say this whole debacle is not the fault of anyone in leadership, that the Big Mitten is just one big camp for economic victims. But that wouldn't be true, would it? I live here, too. I'm a homeowner and a parent, too. Our daughter will leave for college and prolly never return to MI except for breaks and holidays. How, exactly, does it help the public debate to ignore some of the reasons why all of that is? It doesn't. And until the MI electorate and their policy-makers fess up to the reality that they've made a lot of bad choices, not much is gonna change."

How does it help the public debate to misrepresent the problem? Over the last 3 years, I've consumed a great deal of the brain drain coverage around the country and around the world. Very rare is the article that avoids the out-migration mythology and actually advances the policy discussion. Homeowner and parent first, journalist second. That's too bad.

Saturday, April 18, 2009

World Class Skyline in Pittsburgh

Forbes Traveler rates Pittsburgh as one of the "13 greatest urban silhouettes" in the world:

It’s hard to beat Asian tigers like Hong Kong for urban audacity, but our round-up of great skylines holds some surprises, such as… Pittsburgh? Indeed. The city is "right at the intersection of three fairly large rivers, and you approach it through a mountain tunnel, so you arrive completely deprived of a view—and then you’re on a bridge looking at the city," say Stamberg and Aferiat. "It’s very beautifully proportioned the way it starts fairly low at the river and then climbs to the U.S. Steel building, which is the tallest one there."

The topography of Pittsburgh creates great drama and an overwhelming number of unique neighborhoods to explore. For aficionados of geography, Pittsburgh is a little-known gem. In fact, Pittsburgh is better appreciated outside of the United States. A good example of this perspective is the established international reputation of Carnegie Mellon University (CMU). A CMU education is valued more abroad than it is domestically.

Anyone who has seen the Pittsburgh skyline won't be surprised at the ranking. That so many readers of Forbes Traveler would be shocked explains why Pittsburgh, among other shrinking cities, struggles to attract newcomers. How talent comes to appreciate a place hundreds of miles away is a bit of a mystery.

Over at Pittsblog, Samantha Bennett discusses a recent Forbes Most Livable Cities list:

Portland [Maine] is a small city whose long and frigid winters have not kept it from having HUGE income growth, very low unemployment, low crime and favorable marks for culture. I also remember reading recently that it is one of the best cities in the country for childless singles in their 30s and 40s. Again, I must point out that bad weather is not helpful, but: Madison, Denver, Baltimore, Stamford, Bethesda, Portland and three cities in Massachusetts. Life is tough. Buy mittens.

I can tell you that life is not tough in Denver, at least concerning the climate. But Bennett's perception is quite common for people who haven't lived in Colorado. I've wintered in all of the regions listed as weather-challenged. Relative to them, I feel like I am cheating residing in the Front Range. Mitten days are rare. You are more likely to be wearing shorts in January than suffer multiple weeks of bundling up. But if you miss the snow, you can always head to the mountains.

Knowledge of place is difficult to convey, particularly over great distances. This is why most migration, even today, is a short journey. Personal relationships can often trump rational choice. This is true for the business world, as well. Thus, "livable" Pittsburgh continues to shrink.

Friday, April 17, 2009

Yinzers Cut Pittsburgh Wages By 6%

Mike Madison makes the case for more H-1B visas. The numbers he presents do suggest that Pittsburgh benefits significantly from this niche labor pool of foreign-born workers. However, recent research concludes that some workers are hurt by the H-1B visa program:

"In this paper, we simply sought to dispel the myth that globalization generates no losers," wrote Prasanna Tambe, an assistant professor of information, operations and management sciences at the Stern School and Lorin Hitt, a professor of operations and information management at Wharton. The authors said that it's important that policy makers understand the wage impact of the H-1B visa program..

The study is unique, the authors said, because of its study of all the resumes. That combined with other public sources of data, gave them a sample number of IT workers in each firm, which they coupled with the number of H-1B workers these firms reported hiring. In total, the study was based on information the researchers compiled on 156,000 IT workers employed at nearly 7,500 publicly-held U.S. firms.

"The relationship I'm investigating here is how compensation looked for domestic workers, depending on whether or not their employers are using offshore and H-1B employment," said Tambe.

What they found is that H-1B admissions at current levels are associated with a 5% to 6% drop in wages for computer programmers, systems analysts and software engineer categories.

A reading of the white paper reveals that the increase in talent supply decreases wages for incoming IT workers. Here is a provocative passage:

Although the prevailing wage may not be an accurate reflection of the amount H-1B workers are paid by employers, the average wage listed in the H-1B application appears to be substantially less than the average wage paid to the American IT worker. This comparison does not control for job classification, education, or experience, and therefore provides little evidence about whether H-1B workers are paid less than their American counterparts, or whether H-1B admissions depress wages for American workers. Comparing the two distributions, however, indicates that unless employers are generally paying significantly more than the prevailing wage for H-1B workers, H-1B employees are either 1) primarily hired to fill positions towards the bottom of the IT wage distribution, or 2) are paid less than their domestic counterparts for the same positions.

The implication is that H-1B workers help to staff the IT sweatshop, reducing costs of the rank-and-file. I can't shake the fact that the H-1B visa program represents a captive labor pool. There's no getting around that these are temporary contracts and labor mobility is limited. Fast track Green Cards would be better for all concerned, save the big corporations who submit the lion's share of H-1B applications.

I'm reminded of the Pittsburgh labor market, which suffers from oversupply and reduced geographic mobility. (Hence the title of this post.) This depresses entry level wages. Furthermore, advancement opportunities are in shorter supply. If more people relocated in order to advance their careers, then the local work environment would improve.

Geography of Cleveburgh: Making the Connections

I'm still angry about Team NEO's ignorance of the economic challenges facing Cleveland and other Rust Belt cities. Team NEO is reinforcing the same dysfunctional geography that birthed the obvious gap between Pittsburgh and Cleveland in President Obama's proposed high speed rail initiative. Framing Pittsburgh as competition ultimately hurts other Northeast Ohio communities, particularly Youngstown.

Surprisingly, at least to me, Pittsburgh leadership seems to appreciate Youngstown's plight better than Cleveland does. The Imagine Greater Pittsburgh campaign defines the region as comprising of 4 states and 30 counties, including Mahoning (Youngstown). How Youngstown in Northeast Ohio ends up as part of Pittsburgh became obvious to me when I considered the Fourth Congressional District of PA, Jason Altmire's territory. This district connects the North Hills of Pittsburgh with Mercer and Lawrence counties (i.e. Greater New Castle).

What does that have to do with Youngstown? Everything. Lawrence and Mercer counties have joined with Mahoning, Trumbull and Columbiana in Ohio to coordinate workforce development efforts. This collaboration reveals just how shortsighted (and Cleveland-centric) the NEO project is.

That point brings me to The Sprout Fund's Community Connections campaign and a book sent to me for review. I engaged program coordinator Dustin Stiver concerning the regional ambitions of the book, Making the Connections:

Sure, the impetus for this program was the region's 250th anniversary, but by engaging citizens in the idea phase, giving them the power to select which projects should be supported, and enabling project managers to achieve their individuals goals, we built a powerful network of civic leaders from all corners of the region. This network, and the process by which it was created, can be utilized again under any banner and for nearly any purpose.

One of The Sprout Fund's objectives is to encourage regional stakeholders ("the treetops") to adopt these kinds of approaches when engaging citizens ("the grassroots"). By telling this collection of stories, we now have a tangible, proven product that can be grasped when appealing to civic leaders and grassroots advocates alike.

You are likely still wondering what Stiver's comments have to do with Youngstown. Lawrence and Mercer counties are part of this region, part of the book, part of the Community Connections program. From the book about Lawrence:

Despite close social and historic ties to Youngstown in Eastern Ohio, Lawrence County and its principal city of New Castle have managed to carve its own identity while still maintaining links to its neighbors to the West and South in Pittsburgh. Home to the Zambellis, the First Family of Fireworks, Lawrence County has strong community traditions dating back to the immigration of whole European villages in the 19th century. Lawrence County chose to commemorate 2008 by dedicating its Community Connections dollars to serving area children.

Fair to say that Lawrence County is closer, in many aspects, to Youngstown than it is to Pittsburgh. Any regional identity formation would naturally extend to Youngstown and intensify the links between that city and Pittsburgh. The economic reality is that a thriving Pittsburgh boosts Youngstown and therefore the rest of Northeast Ohio. But that wouldn't occur to anyone who wasn't familiar with the world outside of Cleveland. Coming from a purported booster of regional collaboration, such a parochial perspective is shameful. And once again, Cleveland is more than a few steps behind Pittsburgh.

Thursday, April 16, 2009

Blog Release: Making the Connections Book Launch

I'll write a book-related post later today. From The Sprout Fund:

Stop by tomorrow to help us wrap up Community Connections...

Happy hour and book release party: Tomorrow, April 17th from 4:00-7:00pm at the Shadow Lounge, 5972 Baum Boulevard, in the East Liberty section of Pittsburgh (map). There with friends, participants, and supporters you will be able to purchase your copy of the book, meet the author and the design team, and mingle to the sounds of DJ J.Malls-all while enjoying food and beverages generously donated by Whole Foods Market Pittsburgh and Penn Brewery.

Hot off the presses...

Starting Sunday, we launched a video preview of the book and were featured in the Pittsburgh Post-Gazette's Next Page. Throughout the week, we previewed three stories from the book: Fishermen of Men, Old Bedford Village, and Field Recordings. Yesterday, Pop City Media reviewed the book. And, today, we released a podcast with Making the Connections author Justin Hoppper, who spent the last year documenting Community Connections-through blog posts, newsletter articles, and, most especially, the tales captured in the book.

Thank you...

We appreciate all those who made Community Connections such a tremendous success: the projects, the committee and co-chairs, the funders, the decisionmakers, and the engaged citizens who used our region's 250th anniversary to do so much more in their communities than commemorate the past. With ingenuity, determination, and imagination, we've shown what we can do together, today and in the future.

We're proud of the accomplishments of our projects and confident that the stories of the people who made it happen will be told long after the anniversary year.

Please join us tomorrow to celebrate,
All of us at Sprout

Drag on Ann Arbor Innovation

Ann Arbor could be the next Madison, WI. The college town has the potential to join the ranks of Austin, TX. At least, Michigan is betting that it can. What's holding Ann Arbor back?

Ann Arbor has not yet achieved the status of entrepreneurial hotbeds like Austin, Texas, and Madison, Wis. The city lags far behind Madison in attracting young professionals, said Lou Glazer, president of Michigan Future Inc., an Ann Arbor think tank. ...

... Longer-term, [Ann Arbor SPARK (the local economic development organization)] hopes to provide small firms in the area with resources that could enable them to grow more quickly into larger companies. Like other cities in Michigan, Ann Arbor suffers from a shortage of experienced executive-level talent and its start-ups need more capital.

Ann Arbor's shortcomings remind me of one of Pittsburgh's problems. There are plenty of ideas coming out of the University of Pittsburgh and Carnegie Mellon University. But small startups often need to relocate in search of more funding and experienced entrepreneurial talent.

Where are these companies going? Primarily, to the coasts: Boston and Silicon Valley. If Rust Belt cities could collaborate more effectively, more companies might be able to grow in the mega-region. Instead, each state and each shrinking city is going after the brass ring. This dilutes the talent pool and helps to prop up the comparative advantage of established entrepreneurial centers.

Wednesday, April 15, 2009

Green Shoots in Youngstown

American Public Media's Marketplace returns to Youngstown for an update on the Mahoning Valley economy. I like what Phil Kidd has to say:

That's who's being attracted to Youngstown. People who want to search for that answer, and people who want to engage in that process of figuring this out. It's like an urban laboratory of sorts.

If I merely want to blog about Rust Belt revitalization, then Pittsburgh makes for an excellent subject. But if I actually want to do something, implement my ideas, there is Youngstown. I doubt there is another city that affords this kind of opportunity to the legions of enterprising amateurs who dabble in policy, economic development and urban planning.

Rust Wire describes a daunting problem
. I don't see decay. I see an urban frontier. I see a city that will let me, and anyone else, "figure this out."


From a Calgary paper:

Nova Chemicals Corp., Canada’s largest chemical maker, will keep its headquarters in Pittsburgh, Pa., after its takeover by Abu Dhabi’s International Petroleum Investment Co.

Nova president Chris Pappas told shareholders at the company’s annual meeting Tuesday that Pittsburgh remains a good location to run the company because it’s close to customers.

Nova, created by the Alberta government, relocated its head office to the U.S. from Calgary a decade ago, a move that has been widely criticized for separating Nova’s decision-makers from its major operations, particularly Nova’s flagship Joffre ethylene and polyethylene complex in central Alberta.

I think this economic relationship between Pittsburgh and Alberta is representative of the transformation of the Southwestern PA workforce.

Zero-Sum Thinking in Northeast Ohio

Cleveland is not the entirety of Northeast Ohio (NEO). A better definition of Cleveland is a cul-de-sac of globalization. Team NEO's recent Cleveland show-and-tell spells out the entrenchment of parochial politics and the lip service paid regionalization. Even more distressing is the following comment:

To distinguish its red-carpet tours, Team NEO crafts attention-grabbing invitations. For the tour during the Rock Hall's induction weekend, invitees received small guitar cases with invitations tucked inside.

"We are competing for these jobs against Indianapolis, Detroit, Pittsburgh," said Team NEO's Carin Rockind, vice president of marketing and communications. "We have to break through."

Does NEO include Youngstown or not? Is the Tech Belt Initiative dead on arrival? There is considerable overlap in talent and opportunities between Cleveland and Pittsburgh. Nowhere is that more evident than in Youngstown. But Cleveland-centric Team NEO fails to understand this geography. No wonder Richard Longworth characterized Cleveland as a hopeless casualty of globalization:

In all my travels through the Midwest, Cleveland was the only place, big or small, that seemed heedless of the global challenge. Only 4 percent of its population is foreign-born, in an era that demands new blood; the city government isn’t sure it wants more. One of its leading economists told me, ‘You can’t kill manufacturing–that’s stupid,’ but manufacturing is fleeing and cities need new ways to support themselves. In an era of global connectivity, only one non-stop per day, to England, links Cleveland to the world. The first-rate Cleveland Clinic is expanding, but every Midwestern city is building up its health industry: few expect it to carry the city’s economy.

Team NEO, like Cleveland, is heedless of the global challenge. It also seems ignorant of the challenges facing its regional satellite cities. At least, that's what the comment about Pittsburgh suggests. That kind of zero-sum thinking is what will continue to kill economic development in Northeast Ohio.

Tuesday, April 14, 2009

Relocation Costs

Imagine someone or some organization offering you $2 million per year to improve the regional talent pool. How would you spend it? That's a lot of money, but rather modest when you consider how much might be thrown down the brain drain or the various marketing campaigns launched to bolster the image of the city at the center of your economy. When I consider the costs of relocation, I gain a better appreciation about the machinations to keep people tied to home:

Get financial advice on whether the move makes economic sense. Factor in not only a new salary, but also a different cost of living, moving expenses and varying real-estate markets. Moving is a sizable financial investment, with the average relocation within Canada costing about $50,000. Transporting household goods are the single biggest part of any moving expense.

Enticing a mid-career family to move to Pittsburgh doesn't make much sense. Choose your boomerang migrants carefully. Bring back entrepreneurial talent if you insist on spending your budget on this demographic. A better idea along these lines would be some sort of diaspora mentorship such as Globalscot given that many shrinking cities don't have enough of entrepreneurial executive experience.

I would do a regional audit of worker shortages and then figure out the top talent production locations in this field. College graduates can relocate on the cheap. Young adults (and immigrants) are innovative when it comes to dealing with a high cost of living. Short of direct financial remuneration to incentivize the move your region, you might fund a Bulldogs in the Bluegrass program.

I've read about a number of programs that seek to match local businesses with local graduates. The genius of Bulldogs is that it introduces new people to the charms of Louisville (among other cities). Rust Belt cities in particular need to break into new networks and establish different path dependent migrations. I could see Bruins in the Burgh or Cardinal at Carnegie placing talented interns at promising startups (e.g. PeaceMaker or Etcetera Edutainment). I could see AlphaLab or even the Pittsburgh Technology Council running this type of initiative. The hope is to establish fresh talent pipelines and increase network in-migration.

Monday, April 13, 2009

Brain Gain Pittsburgh

Update: The official release of the Michigan Future report is today. Here is some of the initial press reaction.

Michigan Future has updated its report about the state's "transition to a knowledge-based economy." Of interest to the Burgh Diaspora is the use of Pittsburgh as a key regional benchmark:

Chicago, along with Minneapolis, are the most prosperous regions among the Great Lakes states. We have added Pittsburgh as a comparison. Many find it a possible model because it is both a cold weather region as well as having gone through a restructuring (with the collapse of the steel industry) similar to what we are going through with the auto industry. ...

... Except for Hartford and New Orleans, the high prosperity metropolitan areas are places that are substantially adding to already large concentrations of college educated adults. And in most cases college educated movers account for more than half of their net in migration. In metro New York, Washington, Boston as well as Chicago and Pittsburgh – all of which did well in attracting college educated adults – there was a net out migration of non college educated adults.

Pittsburgh is a city with a growing population of brains. Not only is the population of the college educated going up, but it is concentrating in the regional core. Michigan Future corroborates the findings in the Brookings study of domestic talent migration. Pittsburgh is experiencing the opposite of brain drain and is looking demographically more and more like other hotbeds of innovation.

What's lacking is immigration (hat tip Richard Herman), but even those numbers are a bit deceiving.

The above graph (click on it to see the entire jpg) is from the Chicago Fed. The raw numbers won't impress anyone, but Pittsburgh does a good job of attracting well-educated immigrants. That's not to say the region couldn't do better.

Sunday, April 12, 2009

Asking Steeler Nation for Help

From Jim Wexell:

"Steeler Nation: A Pittsburgh Team, An American Phenomenon" is now on sale at with half the proceeds going to the sweetest little six-year-old girl you'll ever meet (

From Today's Post-Gazette: (

No one stands taller than when they stoop to help a child

"Here's something a little different for this space today. Instead of insight into the NFL or Steelers, I give you an appeal to help a little girl in Westmoreland County and, yes, the Steelers are involved.

"Fallyn McNamara, 6, of West Hempfield has a rare skin disorder known as recessive dystrophic epidermolysis bullosa (RDEB). It makes her skin as fragile as the wings of a butterfly, the reason these kids are known as "butterfly children.''

"She needs at least $200,000 to undergo treatment that includes a bone-marrow transplant. Several churches are helping raise funds, as is the Steelers basketball team, Hempfield High School and author Jim Wexell, among others. The Steelers basketball team agreed to extend its season to play a game at Hempfield May 17 at 2 p.m. with the school donating all proceeds to the cause. The Steelers have donated items for an auction that day.

"Wexell will donate half the proceeds from the sale of his wonderful book, Steeler Nation, bought at, from today through Father's Day. He's also asking Steelers fans to make donations for Fallyn's treatment at the Web site or by calling Frank McNamara at 724-864-5718."

Thanks to all who've ordered already, and thanks to Ed Bouchette and the Post-Gazette, Tom O'Malley and the Steelers' basketball team, the Steelers, and Brett Keisel, who has made plans to help us at the basketball games April 18 at Norwin and May 17 at Hempfield. Also, thanks to Stan Savran, who'll have me on his show in the coming days to talk about the upcoming draft and help us raise money.
-- jim

Saturday, April 11, 2009

Why Bloggers Could Save Buffalo

I'm ripping off the title of Sean Safford's new book because his research looks at why some Rust Belt cities succeed and others fail. Safford cautions that a community might have too much social capital. Parochial networks can be so dense as to stifle civic innovation. Another test case (Safford compared the development trajectories of Youngstown and Allentown) is Hamilton and how it might benefit from studying the recent political history of Pittsburgh and Buffalo:

While local politicians had no control over the fate of the Seaway or the steel mills, their failure to respond collaboratively compounded the problems. [Former Erie County Executive Joel Giambra] believes infighting between city and suburbs prevented a co-ordinated regional approach to planning and economic development.

Suburban communities focused on poaching businesses from the old City of Buffalo while building sprawling low-density neighbourhoods that effectively segregate upper-middle-class whites by race and income from the urban areas they fled.

High commercial taxes drove remaining businesses away, while discouraging new industries.

The hollowing out of Buffalo accelerated when they built a new university campus and an NFL football stadium in distant suburbs. They constructed an LRT/subway system, but parochial politics guaranteed its failure by dead-ending the line at the city limits, preventing it from connecting to the university and high-growth employment areas in the suburbs.

Buffalo built a waterfront expressway that undermined stable neighbourhoods and disconnected the community from the natural beauty of Lake Erie. They squabbled for years about how to improve capacity at the Peace Bridge while frustrated tourists and exporters took their business elsewhere.

The columinist for the Hamilton newspaper promises a second piece about Pittsburgh, which I expect will mirror Safford's relatively positive account of Allentown (Buffalo and Youngstown both suffering from too much social capital). The Rust Belt challenge, as Richard Longworth has articulated in his book Caught in the Middle, is to overcome the legacy of parochial politics. How might Buffalo accomplish this feat?

Sharon Panelo might have a few ideas:

My program is in Strategic Communications at Columbia, and the course I'm taking this semester is about Communications 3.0: Best Practices in a Networked Society. My team and I are working with The Center for American Progress -- specifically, their Science Progress subdivision -- to develop a social media plan for creating a regional center of innovation . Our target region is Buffalo, NY and we're working with the mayor's office there.

As you can see, it's a sprawling project spanning many disciplines. My team and I have to struggle not to solve the problem itself (how to revive Buffalo's economy by creating regional innovation clusters) but to focus on recommendations for a social media plan that promotes these clusters.

My focus is on the blogosphere and how ordinary citizens are shaking up convention, from policymaking to entrepreneurship.

Sharon contacted me, along with who knows how many other Rust Belt bloggers and social media wonks, in hopes of learning a bit about our experiences attempting to revitalize shrinking cities. I think the shortcomings that Dr. Safford identifies can be mitigated via social media. Mike Madison is a great example of how this cause is advanced in Pittsburgh. If Hamilton wants to avoid the mistakes that Buffalo (and even Pittsburgh) made, then it should look to its own social media community as the broker of ideas.

Friday, April 10, 2009

More Rust Belt Migration Tales

If you take a gander at the county level migration data for 2000-2005, then you'll see with your own eyes how short of a distance most relocation is. The perception of the population shift from the Frost Belt to the Sun Belt is exaggerated. The move to big city includes anti-climatic destinations such as Chicago, Boston, and Minneapolis. Bill Toland ponders the economic sunshine of Pittsburgh:

That doesn't mean those leaving the Sun Belt will end up in Pittsburgh, obviously. But perhaps we can reverse the flow of regional outmigration. For every worker we've lost to sexy spots like Austin or North Carolina over the last 20 years, we've lost two to Washington, D.C., or Philadelphia. We lose just as many workers to Columbus as we do to Atlanta. Not everybody leaves for sunnier climes; many just left for sunnier job prospects, and the closer, the better.

And in many of these cities -- this year, anyway -- unemployment is higher than it is in Pittsburgh, and homes are more expensive than they are in Pittsburgh. As job prospects shrink over the next nine months, the intra-regional churn figures to grow. And maybe Pittsburgh has a chance at winning, even if, in the end, it's a zero-sum game for the Rust Belt at large.

Maybe we'll never get the droves of grads and job-seekers to leave the warmth of Atlanta for Pittsburgh. But if you can take the sunshine out of the equation, it might be an easier sell. People living in Chicago and Cleveland, after all, already own a winter coat. One less thing to worry about, ya know?

Another aspect Rust Belt cynics overlook is the out-migration from Sun Belt metros. 4-times as many migrants leave Los Angeles County than Allegheny County for Fulton County (Atlanta). The problem for Pittsburgh is that it isn't on the mental map of boomtown talent. The exception to that trend is, of course, the Burgh Diaspora.

Of course, I'd be shocked if Pittsburgh or any other Rust Belt city aggressively courted in-migration as zealously as it obsesses out-migration. If there is a talent shortage, then local wages sure don't reflect it. Like most things in Pittsburgh, current levels of in-migration are good enough.

Thursday, April 09, 2009

Geographic Mysteries of Pittsburgh

America's proposed high-speed rail network does a good job of graphically representing the Pittsburgh perspective on regional connectivity. The Chicago octopus stops in Cleveland. I'd bet that suits Cosmopolitan Pittsburgh just fine.

Northeast Ohio Talent Pipeline

According to Rick Batyko of Cleveland Plus, Northeast Ohio (NEO) retains over 79% of its graduates from public universities. Ohio does almost as well keeping 76%. Compared to Michigan, Ohio isn't suffering from brain drain. Then why do regional boosters keep saying otherwise?

Investing in our young people, those who are from Northeast Ohio as well as those who attend college in Northeast Ohio, is particularly important to our region. We have all heard about the “quiet crisis” and “brain drain” with regard to Northeast Ohio. Having the prospect of a good job in Northeast Ohio will keep our students here, and will ultimately make our region more vibrant and economically strong.

The above comment is indicative of the prevalent labor market protectionism that typically drives workforce development policy. This perspective is no different than the current mood swing against hiring foreign-born talent over the domestic alternative. Keeping students in the area, something NEO already does well, is a bad practice (captive labor scenario) servicing an outdated economy. In fact, actively seeking outsiders has a number of economic benefits.

A sure way to dampen regional entrepreneurial activity is to incentivize the decreasing geographic mobility of talent. Ironically, JumpStart is attempting to accomplish this feat. The most vital talent pipeline is the one from out-of-state or even out-of-country. But the parochial mindset seems unable to grasp this opportunity.

Wednesday, April 08, 2009

From Ben at the US Department of State

Via Chelsea Green (companion article at and gateway website here):

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Michigan Cool Cities Success

Given the documented exodus of Michigan college graduates, Governor Jennifer Granholm's Cool Cities initiative is facing increasing criticism:

The [brain drain] problem is not new. The governor has tried to promote Michigan as an attractive place for recent college graduates and young professions through her “Cool Cities” initiative, which kicked off in 2003. Despite millions in investment, the initiative has been widely seen as not achieving its goals.

As one commenter on another blog unintentionally insinuates, the recent exodus might indicate a change for the better. Pittsburgh suffered through a similar gutting of its young adult population. I've come around to appreciate that brain drain is a symptom of successful investment in local human capital. I intend to prepare my children to compete in a global workforce and geographic mobility is one of the hallmarks of in-demand talent.

Coercing people to stay is foolish, but there is nothing wrong with improving the cities for the young professionals who prefer Michigan to anyplace else. The goal of Cool Cities from the start should have been attracting brains. A good example of just such an approach is IndyHub's new initiative, will feature information and news relevant to Indianapolis’ arts and culture, night life, dining, outdoor/sporting scene and much more, along with basic facts and figures about the state of Indiana. The site will contain videos, photos and an interactive map of Indianapolis, highlighting local hot spots and must-sees. will serve as a recruiting tool for businesses and HR professionals when courting out-of-state candidates.

Kudos to Indianapolis for skipping the usual rhetoric about retaining locals. I also appreciate Saskatchewan's aggressive courting of talent outside of the province. I hope Michigan doesn't make the same mistake that Pittsburgh did in obsessing the natives who left. But for all the fretting about brain drain, Pittsburgh would recover and be the better thanks to out-migration.

Tuesday, April 07, 2009

Ohio: Flushing Money Down The Brain Drain

As long as Ohio politicians keep pushing this folly, I'm going to keep pointing out how misguided the policy is:

Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio, raised concerns that the money might be diverted from housing programs for low-income residents and said he believes such a sum might be better used to prevent home foreclosures.

"The intent is solid," he said. "The problem is that it is 300 people, and we pay a greater amount based on the degree. If you're a doctor or lawyer, you're eligible for the maximum amount. I wonder whether we're really changing any behavior."

[Sen. Stephen Buehrer (R., Delta)], however, said that taxes generated for the state by those who might otherwise have fled would more than cover the program's cost.

There is no way of knowing if the brain drain initiative will pay for itself. The applicants for the home-ownership subsidy are entered into a lottery. How do we determine if the winner was on his or her way out of the state? What are the metrics for success?

Here is what Ohio should do:

  1. Determine Ohio's most pressing talent shortage that could be serviced with recent college graduates.
  2. Find the out-of-state programs that produce the most graduates in this field, say... the top-10 talent sources. Better yet, go after the talent in neighboring states. I hear everyone is leaving Michigan.
  3. Use financial incentives to target this demographic, encouraging them to move to Ohio.

Monday, April 06, 2009

Darlings of Density

(Via CEOs for Cities) Urbanophiles are fond of pointing out all the advantages of high-density geography, such as the ability to better cope with the current recession. We tend to think about density in terms of living downtown, as opposed to the suburbs. But the main issue is jobs, and just how concentrated they are in a given region:

In the total survey of 98 metropolitan areas large and small, Buffalo joins cities as large as New York City and as small as Wichita, Kan., among the 30 places labeled as suffering from “moderate decentralization.” Rochester and Poughkeepsie are also in that category, as are cities as diverse as Los Angeles, Las Vegas, Tulsa and Toledo. Albany and Syracuse, meanwhile, are among 53 metro areas labeled as being in the throes of “rapid decentralization,” as are cities from Atlanta to Chicago to Seattle.

Only three communities — Milwaukee, Wis., Chattanooga, Tenn., and the Oxnard-Thousand Oaks-Ventura, Calif., area — are seen as turning the corner toward making gains in their central core areas.

A recent World Bank report identifies economic decentralization as an impediment to development. Job density should be incentivized. That's not the recommendation Brookings makes, but the research does reveal a surprising economic geography in the United States.

I'm still trying to tease out why Pittsburgh is emerging as a Rust Belt outlier. Chattanooga's improving core is a clue given that the two cities are quite similar given the physical imposition of density:

Chattanooga, much like Pittsburgh, is bounded by mountains and hills that create a concentrated downtown area. Northeast Ohio has a very different geography, and must deal with it accordingly. We will always be more “spread out” and this will demand a different approach to both design and physical development.

Just so happens that Pittsburgh is listed as one of the most (7th among large employment centers) centralized economic geographies in the United States. Nearby Youngstown is one of the least centralized. (Only Poughkeepsie and Scranton/Wilkes-Barre are worse among small employment centers.) However, Pittsburgh is among the many metros in the process of rapidly decentralizing, while Youngstown is indicating an abatement of economic diffusion.

Given the trend, I'm delighted to read about the pending opening of the Children's Hospital in Lawrenceville:

[Real estate developer Phil Spano] said Children's is "the first development I can remember where you take a very large entity and put it in a very densely populated inner-city area. There's a lot of anxiety and apprehension, and rightfully so."

Imposing a large employer in a dense residential area has posed numerous challenges. But I expect Pittsburgh to derive great benefit from increasing the job density. Hopefully, the Children's experience hasn't soured the prospects of more developments like it in the future.

Sunday, April 05, 2009

More Boomerang Migration Tales

Update: Migration anecdote in a Nashville newspaper that might speak to the relative strength of the Pittsburgh job market:

I was talking to a soon-to-be college graduate the other day — a small-town, Southern guy — and he was not exactly embracing his upcoming move to the real world.

It seems that he had landed a job with a company based in Pittsburgh. His only trip to the Steel City was for an interview and it hadn't left a very good impression.

And before you ask, no, he's not a Titans fan. He has nothing against the Terrible Towel or those who wave it.

"It's not really where I ever saw myself living, but I'm lucky to get a job like this right out of college," he said. "If that's where my job is, I guess that's where I'll be living."

article in the Asia-Pacific Journal about the recent brain drain from the United States to countries such as India and China. And here is a story of the boomerang migration to Poland given the depth of the recession in the United Kingdom. Guess what Pittsburgh has in common with Poland and India?

As I spent some time walking around my old city, I realized Arnold wasn't alone. In Pittsburgh's Strip District — a popular neighborhood of warehouses, ethnic shops and eateries — I found Luke Wholey selling fish on the sidewalk.

"Moving back to Pittsburgh has been the best thing that's happened to me," he said.

For the last six years, Wholey had been working as a carpenter in the wilds of Montana.

"I'd work four 10-hour shifts, and then three days off — I'd either go hunting or fishing," he said. "I was living the dream for a while, until it all came to an end."

The dream ended when the contractor he was working for folded.

"I tried to stretch it out as long as I could, but when I finally, completely ran out of money, I had to come home," Wholey said.

In Pittsburgh, it certainly doesn't hurt to have Luke's last name, Wholey. The family runs the landmark Wholey's fish market in the Strip District. They've been in business almost 100 years.

The recession has brought Luke back to the family trade. He's opened his own seafood grill, and he's been making money selling plates of fish or shrimp outside the family market.

"Got this Wild Alaskan Grill started," he said. "This is my ninth day of business and we've been through 240 pounds of grilled salmon."

Not only did a twentysomething return to Pittsburgh and find gainful employment; he started a business during a recession. The dense networks of home make the boomerang migration in tough times a practical decision. It is also indicative of how difficult the move to Pittsburgh would be for an outsider looking for a relatively better labor market.

Unless there is a dramatic increase in job creation, I don't see how Pittsburgh or any other shrinking city could attract a substantial number of outsiders. Harvesting expatriates would seem to be the best bet, particularly concerning entrepreneurship. The blog cincinnati imports voices the considerable difficulty non-natives experience when trying to fit into a Rust Belt city. The migration alternative is between postindustrial regions. When Gov. Jennifer Granholm mulls over what to do about Michigan brain drain, she should consider channelling out-migration to states that have traditionally exported talent to her state. Losing graduates to Chicago is a much lesser evil than a relocation to Seattle.