Sunday, February 05, 2012

More Pittsburgh Jobs Boom

In 2011, Pittsburgh's economy took off like a "rocket". The jobs boom is not only exceptional for the region, but the entire United States:

This job growth was not just a national wave that Pittsburgh was lucky enough to ride. The region actually led the nation in job growth in October with the largest percentage of increases in both total jobs and private sector jobs of any major region in the country.

The job surge wasn't a temporary phenomenon, either. Preliminary figures for December indicate that another 1,400 net new jobs were added between October and December, pushing the job count to the highest level in history. Over the 12 months ending in December 2011, Pittsburgh had the fourth-highest rate of job growth of any region in the country.

Emphasis added. Despite the good news, Pittsburgh shouldn't celebrate. There is danger lurking in the data. Harold Miller rains on the parade:

This is why, even though the Pittsburgh region now has more total jobs than any time in history, 27,000 more of our residents are unemployed today than in 2007 before the recession began.

Many of those individuals likely worked in businesses such as manufacturing, construction and retail, where the jobs haven't returned, and they are having difficulty finding work because their skills don't match the needs of the hospitals, research labs and professional-services firms where job growth is occurring.

Can we just ignore the stagnation in manufacturing and other sectors and keep relying on "eds and meds," with a dash of the Marcellus Shale, to drive our economy in the years ahead? That would be a dangerous bet.

Emphasis added. Pittsburgh has too many eggs in the eds and meds basket.  What happens when Big Steel Big Health Care collapses? Exodus. Brain drain! Disaster.

Buried in the gloom and doom is an uplifting tale of migration to Pittsburgh. Miller speculates that the bulk of the unemployed is dislocated talent. One, that means the historical employment peak is a result of newcomers to the region. Two, the dislocated haven't left.

On the first point, inmigration is its own economic stimulus (see Texas). Pittsburgh is benefiting from the same positive feedback loop that is fueling such impressive growth in Dallas. More jobs will stem from people moving to Pittsburgh looking for jobs.

On the second point, better to struggle in Pittsburgh than anywhere else. The push to leave isn't that strong. Instead, talent will stick it out and retrain. Another possibility is manufacturers moving to Pittsburgh to access the spare labor capacity. There is a shortage in Milwaukee but a surplus in Pittsburgh, yet the workers aren't heading to Wisconsin. Time for the Allegheny Conference to go a-courtin'.

1 comment:

BrianTH said...

Construction employment is still way below peak, but it started growing rapidly last summer:

I think that is an indication of the migration feedback loop taking off, and hopefully will help sponge up a lot of the long-term unemployed.