Some may not realize just how fundamentally Pittsburgh has changed in the last 20 years. The perception that economic conditions are always worse here than everywhere else is no longer valid.
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| | | Christopher Briem is an economist at the University of Pittsburgh's Center for Social and Urban Research (cbriem@pitt.edu). | |
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Consider that the local unemployment rate has not been above the national unemployment rate for the last two years. Total employment and average income in the region is higher now than before the decline in the steel industry. It is true that many of the better paying manufacturing jobs have gone away, but many other opportunities have expanded.
Few would trade the state of the region now with what it was in February 1983.
Surprisingly, Pittsburgh has fared relatively well through a national recession that began in 2001. In a sense, Pittsburgh has looked better as regional conditions elsewhere deteriorated. That does not diminish the significance of current positive signs. That the region can weather a recession without the magnified local impacts typical of the past is an accomplishment in itself.
Contrast current conditions to those exactly 20 years ago. Some of the largest plant closings were still years away, yet economic conditions were already bleak. A national recession had slowed job growth locally, but was viewed by most as just another business cycle that the region would dip and rebound through, as it had many times before.
The reality was that the region was facing an unprecedented abyss. National Guard units were being mobilized not to face an external threat, but to deal with domestic discord due to the dire economic conditions. Before it was over, the region would lose over 130,000 manufacturing jobs, taking with them the additional jobs that were indirectly supported by the mills and the earnings of their workers. Compounded job destruction affected nearly every firm and worker. The regional unemployment rate had doubled over the previous year to 18 percent. Even harder hit was Beaver County, which would reach 28 percent unemployment, a level that most of the country escaped during the Depression.
The uniqueness of the Pittsburgh experience was not just the scale of the decline but the speed at which it happened. As the regional economy could not transform itself fast enough, many laid-off workers were forced to leave the region in search of employment elsewhere. What was arguably one of the largest regional exoduses in the peacetime history of the nation left an enduring mark on all who remained.
Why was the downturn in the region's economy so severe? Two decades ago was quite literally another era in Pittsburgh's history. Through the 1970s the local economy was not significantly different from what it had been a century earlier: dominated entirely by heavy industries and a core of steel mills along the rivers. The transformation that Pittsburgh had long delayed was made all the more difficult by the depth of tradition that steel had built here. Generations spent careers in the mills. Pittsburgh was a center of steel and metalworking industries decades before automobiles were being mass-produced in Detroit. There was no memory left of any other dominant industry, and thus nothing to take steel's place when it declined.
That history is not meant to dwell on a painful past -- but to highlight how far Pittsburgh has come.
We have not yet settled on what core industry will define the region into the future. The potential of growth in biotechnology, robotics, advanced manufacturing and other industries is real. Some industries will flourish and others will not, as is necessary for capitalism to work.
The pace of technological change means there never again will be any one industry that will remain in one place, or even exist, for as long as steel was in Pittsburgh. Transformation will not be a temporary state but a perpetual part of the regional economy. Because of the diversification that was forced upon it, Pittsburgh is now more than capable of evolving and changing in a way it didn't need to, nor could, in the past.
One secret to Pittsburgh's transformation is that it was not done by abandoning manufacturing workers and firms. Steel mills still employ more people in the region than almost any other private sector industry. Those plants that survive are far more productive than they were 20 years ago. More important, manufacturing in Pittsburgh now means more than steel. The region is a leader in manufacturing televisions, transportation systems and advanced medical devices as well. If you get lost looking for Dave & Busters at The Waterfront. you may come across the still-under-construction Siemens fuel cell manufacturing plant. It may sound like futuristic science fiction, but that future is under construction here.
It is not just the firms that have changed but so have the people. Most residents of Pittsburgh's South Side have no memory at all of the towering J&L plant that once defined the neighborhood's skyline. Those who think our brightest minds continue to flee the region should take note that Pittsburgh has a higher percentage of college and post-graduate educated workers among those aged 25-34 than most comparable regions. People are moving to Pittsburgh for work and education opportunities. Even international immigrants are coming to Pittsburgh in increasing numbers.
Though it seems like a long time, history will consider the period between the trough in the local economy and its unfinished resurgence to be relatively short. In an era when technology appears to evolve overnight the tendency is to expect all change to happen instantaneously. Ideas take time to form, business plans take longer to implement and regions evolve far more slowly than any individual firm or industry.
The Pittsburgh region was hit harder yet rebounded faster than many similar industrial regions around the world. In both Europe and Japan, local recessions have persisted for decades, some with no sign of abating.
The story of Pittsburgh has never been one of continuous decline, but one of resilience in the face of unprecedented economic shocks. Regional and national trends will continue to cycle through positive and negative periods and greater prosperity will remain a goal. What should not be forgotten is that an immense transformation has taken place. It is difficult to imagine the miasma of the 1980s being repeated.
Prognosticators in the past likely questioned whether Pittsburgh would exist as a major metropolitan region at the beginning of the 21st century. It does.
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