Those Who Cannot Remember the Past …

A current series of articles in the Pittsburgh “Post-Gazette” is highlighting issues around immigration to Pittsburgh in the new economy, and rightly so.  Immigration is one of this country’s seminal political issues and one that is central to the Pittsburgh region’s economic success.

But written between the lines of this and so many other pieces on Pittsburgh’s shortcomings is the subtext that, in fact, Pittsburgh’s situation is the result of some self-inflicted wounds and “the region should have known better”.  After all, look at how other regions have done it better, prima facie, their growth outstrips ours.  As usual in these pieces, there are quoted experts in the appropriate fields: everything from social sciences to economic development to corporate leadership and all of them have theories as to what Pittsburgh could have done better.

I have to question the ages and backgrounds of these people.  After reading the first two pieces in the “P-G” series I realized how old I am and how long ago was the time of Pittsburgh’s great economic upheaval – the complete death of the steel industry.  I suspect that many of the experts, especially those located in Pittsburgh, are too young to have lived through that era.  So despite the fact that I’m about to give a hint at my age, let me say I did and ….

Pittsburgh in 2014 is a modern miracle!  Detroit’s debacle in 2014 is nothing compared to the decimated economy that was Pittsburgh.  It was literally an economic collapse of “Great Depression” proportions.  I cannot exaggerate the shadow that was thrown over daily living; even the weather seemed grayer.  And yet, Pittsburgh survived.  And then it stabilized.  And now it is growing again.  The past is not prelude.  Great societies revive and renew and reinvent themselves.  Great people do as well.  As do great, truly great cities.  That’s happening in Pittsburgh now.  With acknowledgements to Santayana and exhortations from Gautama Buddha to enjoy the present moment. Peace out for now.

Finally, some sprouts from local seeds!

This week it was announced that HP Vertica, a software engineering division of Hewlett Packard, was opening a full fledged office in downtown Pittsburgh.  Previously the organization was working out of offices at Pitt.  Cited in the announcement as a reason for the standalone office by Colin Mahony, VP and general manager for HP Vertica, he notes: “We’ve found that you have to go where the talent is and we’ve had great, great partnerships with CMU and Pitt.”

That’s exactly the kind of talk we want to hear for organically growing Pittsburgh’s job market and overall future.  Enough of what I’ve heard from a couple local economists that Pittsburgh’s slowdown is related to the general slowdown in US economic growth.  Huh?  Be a leader, not a laggard.  Incite your own job growth.  It’s about time we hear of more organizations that credit Pittsburgh’s higher ed talent pool as a reason to locate here.  It’s nice when eds and meds create jobs within their enterprises.  But it’s better when jobs and wealth are created by the ecosystems eds and meds help spawn.  Good on this one!

continuing a thought ...

After too much delay, building on the previous post but moving onto the more esoteric consideration of promoting manufacturing job growth in the Pittsburgh region: government assisted jobs development and promotion.  Miller targets Pennsylvania’s high corporate tax rates as strangling job creation, especially in the competitive field of new facilities location.  And in that he makes a valid point.  But these days government assisted jobs creation largely involves government subsidies.  Texas has become the master at stealing away both facilities and headquarters offices with rich government subsidy programs.  Witness last week's announcement that Toyota North America will bring 4,000 jobs from California and Tennessee to Dallas - with the State of Texas contributing $40 million to that move.  That can be done because Texas runs a large surplus in its budgets.  Why more of a surplus than most other states and certainly more than Pennsylvania and other Northeast/Midwest states?  How about another 30,000ft view of the obvious: because the State of Texas provides less to social and education programs than most states.  Texas shifts the burden of financing these programs to other government entities such as local municipalities and school districts.  Texas residents pay no State income tax but very high real estate and sales taxes.  Corporate taxes in Texas are also lower than Pennsylvania’s.

And that’s where the government and societal philosophy comes in: do we tax at the job-holder or the job-creator level.  By shifting the burden of necessary social and educational needs to residents, especially owners of housing who tend to be older, states like Texas are taxing the users of social programs, dependent children [via their parents] and the elderly.  This frees up resources [tax money] for programs [corporate location subsidies] that benefits job creators in the form of businesses. In turn, these business entities provide jobs that attract young people in their 20s and 30s that, once established, then become essential to job creation and future growth via family formation and corporate expansion.  Subsidizing old retired people to comfortably afford their homes is not part of the Texas strategy.  Subsidizing entities like Apple and Samsung and Facebook, to name three recently subsidized firms in the Austin area, is a strategy and a successful one, for job creation at least.

So which way should Pittsburgh head?  I don’t believe growth for growth’s sake should be a goal.  A high growth rate provides bragging rights but not necessarily a high quality of life – in fact from my experience it’s quite opposite.  So it comes down to “philosophy” as well as simply working with what you’ve got.  Those beautiful green hills and valleys and rivers of western Pennsylvania need to inspire a new creativity and a new path of innovation and success.