Pittsburgh Seems Cool, But Its Numbers Aren't So Hot
Pittsburgh is where it's at. Don't take it from me, take it from Jody Rosen, who wrote in a Travel & Leisure article that went online last week:
Increasingly ... the Carnegie Mellon and Pitt students who once hightailed it out of town after graduation have been sticking around. The city has also seen an influx of “boomerangers,” Pittsburgh natives or their kids, who have returned to their ancestral turf. And new waves of transplants are arriving, from Philadelphia, New York, and beyond, lured by a quality of life that consistently earns Pittsburgh a perch in the upper reaches of the Economist’s annual Global Liveability Ranking. The selling points are considerable: affordable housing, a robust job market anchored by a thriving tech sector, those redoubtable educational and health-care institutions, and an arts community awash in foundation money.
Or Stephen Heyman, writing in Vogue in February:
In fact, Pittsburgh is not just a happening place to visit -- increasingly, people, especially New Yorkers, are toying with the idea of moving here. Last spring, Monocle published a “prospectus” about the high bohemian real estate boom in the blue-collar neighborhood of Lawrenceville, which was immediately followed by a long panegyric from Brooklyn Based: “Should We All Just Move to Pittsburgh?” The piece was riddled with alluring anecdotes, like the story of one transplanted couple who bought a three-bedroom fixer-upper with original stained-glass windows for -- “wait for it” -- $65,000.
Or my friend Jeff Gordinier, in the New York Times food section in March:
Everybody seems so young. And everybody’s talking about restaurants. If there are scholars who hope to study how a vibrant food culture can help radically transform an American city, the time to do that is right now, in real time, in the place that gave us Heinz ketchup.
That all sounds pretty great, and I'd like to check it out sometime soon. Not this weekend, when the cheapest nonstop flight from New York is $769 round trip -- about what it costs to fly to Los Angeles, 2,135 miles farther away. But one of these days!
As someone who spends a lot of time looking through data on the geography of economic growth, though, I can't help wondering if all this Pittsburgh boosterism is a little, well, exaggerated. After all, the unemployment rate in metropolitan Pittsburgh was 6.3 percent in July, compared with 5.1 percent for the country (neither of those figures is seasonally adjusted). Payroll employment in metro Pittsburgh has grown 4.6 percent since bottoming out in February 2010, compared with 11.3 percent growth nationwide. Real per-capita income in metro Pittsburgh rose just 4.5 percent from 2009 through 2014, compared with 17.8 percent nationwide. And here's the kicker: During the most recent period for which data is available, mid-2014 through mid-2015, 2,520 more people moved out of the seven-county Pittsburgh metropolitan area than moved in.
This mystery is of more than local significance because Pittsburgh has been held out for decades as an example of how an aging industrial city can reinvent itself when its main industry goes away. It has two top universities (Carnegie Mellon University and the University of Pittsburgh rank 68th and 70th, respectively, on the 2016 Academic Ranking of World Universities), great medical facilities, committed civic leaders, beautiful architecture, a spectacular setting -- plus self-driving taxis! It is the "base case" for urban reinvention, wrote Richard Florida, then a professor at Carnegie Mellon, in his 2002 book, "The Rise of the Creative Class":
If Pittsburgh, with all of its assets and its emerging human creativity, somehow can't make it in the Creative Age, I fear the future does not bode well for other older industrial communities and established cities.
What does Florida, who left Carnegie Mellon in 2004 for a job at George Mason University outside Washington and is now at the University of Toronto's Rotman School of Management, think about Pittsburgh now? This is from an e-mail he sent me this weekend:
I love Pittsburgh. It has many assets, most of all CMU. It has great neighborhoods, good cost of living. It may turn around, it may BE turning around BUT the jury is still out.
Pittsburgh may be attracting some high skill talent, some people from Brooklyn, some computer scientists from the Bay Area, but it lags badly on international migration, immigrants. For years it was dead last among large metros. Although things have improved it still lags leading regions badly on various measures of talent or human capital, from college grads to my own creative class.
One inevitable reality that a Rust Belt city such as Pittsburgh has to contend with is that the nation's population has for decades been shifting to the South and the West, and is still shifting that way. Before 2008, according to Christopher Briem, an economist at the University of Pittsburgh, more people had moved out of the Pittsburgh metropolitan area than moved in almost every year since World War II. The result is a metro area population that skews old (17.2 percent of the population was 65 or over in 2011, compared with 13.2 percent nationwide) and is among the country's least diverse.
Those airfares I cited are a problem, too. Since US Airways shut down its hub there in 2004, Pittsburgh has joined the ranks of big-league cities with minor-league air connections. It also gets pretty cold there in the winter.
With that history and those disadvantages, the seven years of positive net migration from 2008 through 2014 shown in the above chart actually marked a pretty dramatic positive turnaround. "For a region that experienced net migration losses on the order of 50K per year in the early 1980s," writes Briem, "just being net even is an accomplishment." Pittsburgh did succeed in stemming the tide of decline, and should get credit for that. But what about the mini-exodus in 2014-2015?
Well, I have a theory, and it doesn't have much to do with the tech industry or the creative class. Pittsburgh happens to be in the middle of the Marcellus Shale, the geological formation that thanks to advances in hydraulic fracturing and horizontal drilling has seen a spectacular boom in natural-gas production since 2008. Sure enough, mining and logging -- the industry category that includes oil and gas extraction -- added 7,300 jobs in metro Pittsburgh from January 2008 to its peak in November 2014, or 61 percent of all new jobs created in the area during that period. Since then, with natural gas prices down, the industry has lost 3,000 jobs.
That could explain why net migration went from positive to negative after mid-2014, as well as some of the recent weakness in the employment data. It's not that Pittsburgh is over; it's that the fracking boom is (sort of) over. Then again, if the fracking boom was responsible for much of the region's job growth from 2008 through 2014, that means the other growth drivers can't be all that impressive. An influx of young chefs, Brooklyn real-estate refugees and magazine writers is great, but it takes more than that to keep a big city growing.
This was for Saturday-departure, Sunday-return flights, as checked on Expedia. At around 9 a.m. Monday, the Los Angeles flights were about $80 cheaper, at around 10 a.m. they were about $50 more expensive.
Pittsburgh did have a milder recession than the rest of the country, but even if you date things back to when employment peaked nationwide in January 2008, Pittsburgh's employment growth is 0.9 percent and the nation's 4.3 percent.
I can't link directly to this, but the numbers are available from the Bureau of Economic Analysis' interactive data tool.
The 2010 through 2015 numbers here are taken straight from the Census Bureau; the pre-2010 were collected from the Census Bureau by the University of Pittsburgh's Christopher Bream.
I resisted using this phrase, but it just seemed inevitable. It's a reference to "The Mysteries of Pittsburgh," Michael Chabon's debut novel, which was made into a movie starring Sienna Miller and Peter Sarsgaard. Chabon's "Wonder Boys," made into a movie starring a zillion famous people, was also set in Pittsburgh, where Chabon went to college (first Carnegie Mellon, then Pitt) and spent part of his childhood. But guess where he lives now? The San Francisco Bay Area!
Pennsylvania natural gas production went from 198 billion cubic feet in 2008 to 4.8 trillion in 2015, according to the Energy Information Administration. The state is now the No. 2 producer in the U.S., after Texas.
Just to be clear, other, larger industry categories added even more jobs over that period: professional and business services, for example, added 23,300. But when you put all the job-gaining and job-losing categories together, the total job gain was just 11,900. And since the gas-employment boom sort of came out of nowhere and then faded quickly, it does seem likely that it played an outsize role in the region's economy over the past few years.
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