A new report from the Journal of Urban Affairs addresses prevalent narratives around Pittsburgh's economic rebound, and provides data to detail just exactly how the Steel City has bounced back.
Written by Colby King (assistant professor of sociology at the University of South Carolina-Upstate) and Laura Crommelin (research lecturer at the City University of New South Wales Sydney in Australia), the paper is titled, “A different perspective on post-industrial labor market restructuring in Detroit and Pittsburgh," offering a deep dive into the employment figures of Pittsburgh since the Great Recession of 2008.
King is a Butler County native whose father worked at a steel mill. The paper compares the economic rebounds of Detroit and Pittsburgh, two former industrial cities that have been deemed rebounds by the media. In short, the paper indicates that Pittsburgh's economy has almost fully shifted away from its industrial roots. Economically speaking, Pittsburgh is no longer a post-industrial city.
“Of course, there is some truth to the idea that Pittsburgh has managed the process of postindustrial transition successfully, while even the most enthusiastic Detroit boosters cannot ignore its serious ongoing challenges,” King and Crommelin write. “But in both cases, these narratives of post-industrial transition inadequately convey the nuanced labor market changes occurring in the two metro areas, and their significance for workers’ circumstances.”
The paper breaks down changes in employment through five categories that were popularized by former Carnegie Mellon University professor Richard Florida: super creative core (executives, administrators, and managers related to a professional specialty), creative class (technicians, clerics, and sales staff), working-class (mechanics, construction trades, extractive jobs, laborers, and machine operators), service workers (home care, security, restaurant works) and agriculture.
One of the biggest revelations of the paper is that Detroit actually has added jobs at a higher rate than Pittsburgh has from 2009-2016. Both regions gained jobs lower than the national rate of increase of 8.5 percent, but Detroit grew employment at a 7.5 percent and Pittsburgh only at 3.5 percent.
When looking at the industries that increased in Pittsburgh, the super creative core positions led the way. From 2009-2016, Pittsburgh gained more than 26,000 positions in this category, growing at a rate of more than 21 percent. According to the paper, “Florida’s super-creative core and creative professionals occupation categories roughly reflect common understandings of ‘new economy’ jobs." For Pittsburgh, this mostly means jobs in tech and corporate headquarters.
But during this same time, Pittsburgh's working-class employment fell by 13,000 positions (a 6 percent decline) which was caused by large losses in manufacturing and public utilities. Despite the region’s natural gas growth over this time period, the losses of manufacturing and public utilities couldn't be overcome. Extraction employment grew by 7,000 jobs, but manufacturing decreased by 10,000 positions and public utilities lost 4,000 jobs.
“Pittsburgh saw a dramatic decline in working-class employment between 2009 and 2016, while Detroit saw a substantial increase,” reads the paper. “For creative workers, Pittsburgh did see much greater job increases, but Detroit’s growth levels were still on a par with the U.S. overall.”
Detroit’s success in growing working-class jobs, a 19 percent increase, was due in large part to jumps in manufacturing employment.
The paper argues that Detroit's boost in manufacturing was helped by large-scale federal investments, while Pittsburgh's growth in creative class jobs was more organic.
After the steel industry collapsed in the 1980s, Pittsburgh was pretty much left to its own devices, economically speaking, and didn't received many federal investments. But when Detroit’s auto industry was struggling in the late 2000s, many manufacturers received federal bailouts. According to the paper, much of Detroit's industry growth was driven by "industry shift,” when employment responds to investment in certain industries.
“With all three components contributing substantially to working-class growth in Detroit, we see evidence of the impact of the federal bailout and subsequent ‘bounce back’ of the region’s auto industry after the 2008 Recession.”
Pittsburgh, without any steel bailout, charted its own path to create growth. The paper notes Pittsburgh wasn’t hit as hard by the recession as Detroit, but it also didn’t see the same post-recession rebound in working-class jobs.
Pittsburgh’s growth was mostly driven by “occupational shift,” when new employment opportunities arose as disruption and change came to industries. (For example, when bank tellers are replaced by ATM machines, there is a corresponding growth in ATM repair jobs.) According to the paper, “Pittsburgh’s higher growth rate for the super creative core was driven largely by an occupational mix component of almost 85 percent.”
This distinction between Pittsburgh and Detroit hints that Pittsburgh’s economy has fully crested past being reliant on heavy industry.
“This suggests that the Pittsburgh region saw much higher demand for super creative core workers across industries, implying that it has indeed shifted to a ‘post-industrial’ economy more quickly than Detroit or the U.S. [as a whole]. In other words, the Pittsburgh region became more 'new economy' over this period, at a comparably faster rate.”
Pittsburgh easily outpaced the U.S. average in terms of growth in super creative core employment but fell behind in every other category. (Coincidentally, the Pittsburgh region is one of the most unequal in the whole country, economically speaking.) However, Pittsburgh does more closely resemble national employment growth than Detroit, as the super creative core and creative class employment makes up larger shares of national employment growth than the growth in working-class, service and agricultural employment combined. Service jobs in the Pittsburgh region still make up that largest share of jobs, but they stayed relatively the same from 2009-2016.
This doesn’t mean regional and state leaders don’t want to grow working-class jobs. Construction of the Beaver County cracker plant started after 2016, so those numbers are not figured into the paper, but proponents say about 6,000 temporary jobs have been created to build the plant. Another 600 permanent jobs will run the plant after construction.
Even if these working-class jobs were added to the paper’s figures, construction employment would have increased by 12 percent (about how much Detroit’s grew), but it still results in a net loss of working-class job growth overall.
Left to its own devices, aka reliant on the decisions and investment of the state and private enterprise (the Beaver County cracker received $1.6 billion in state tax breaks), Pittsburgh appears poised to grow its working-class employment through construction of cracker plants and possible manufacturing plants that create plastic parts made from pellets supplied by cracker plants.
But this effort runs in the face of larger economic forces the Pittsburgh region is up against. Regional manufacturing jobs have only decreased since 2016. In fact, the sector is at risk of dropping below 7 percent of the region’s overall employment. Pittsburgh’s manufacturing share of overall regional employment is at its lowest point ever.
All of this adds context to the current disagreement over the future of Pittsburgh's regional economy. Pittsburgh Mayor Bill Peduto and a small group of progressive state reps and local elected officials are opposed to any new build out of future cracker plants. Peduto has said the pollution the plants will bring could jeopardize the current economic growth the region is seeing, which is being driven by creative core jobs in tech and other fields. Tech workers are very vocal in their desire to address climate change.
For contrast, manufacturing jobs were ~40% of all regional jobs in early 1950s.— chris briem (@chrisbriem) May 17, 2019
Gov. Tom Wolf (D-York) and Allegheny County Executive Rich Fitzgerald (D-Squirrel Hill) support the future cracker plants, saying they are essential to the overall economic vitality of the entire metro area, not just the city.
But recent history shows the promise of growing manufacturing through the natural gas industry might not be a sure bet. In June 2016, pro-fracking research group EnergyInDepth published a post highlighting several stories that promised natural-gas production was leading to a resurgence in manufacturing employment in the Marcellus and Utica shale regions, which encompass Southwestern Pennsylvania.
Since June 2016, manufacturing employment in the Pittsburgh region has lost about 2,400 jobs.