Pittsburgh’s Labor Market: the Future is Now

There’s been so much talk in both political and business pages about the Trans-Pacific Partnership, or TPP, that it got me to thinking about Pittsburgh’s increasingly smaller part in this larger and, for most, unsettling economic world order.

These far reaching economic partnerships are both credited with and condemned for broadening product and labor markets, with the result that both products and workers are further exposed to market forces.  But these international trade agreements are nothing new.  Trade pacts have always been concomitant with the actual trade.  Or maybe trade pacts were just realized in different guises than today.  Whether between Great Britain and China, Arabia and Africa, Portugal or Spain and the Americas – who knew if it was a trade pact or a police action or enslavement?  However characterized, contracts were drawn up and pathways of goods and people were established.

My concern here is how will Pittsburgh survive in this new global market, [same as the old global market, to paraphrase The Who]; one that shifts the rewards of income ever more quickly among producers.  We’ve all read the articles about income inequality and how higher incomes are going to better educated workers in “knowledge industries”.  One disconcerting item often noted about these industries is that they create employment in the hundreds, or low thousands at best.  The era of heavy industry or consumer goods production that employed tens of thousands with decent wage rates has moved away from America to cheaper labor continents.  And still America continues to lose at an astounding rate those types of jobs that require large number of workers, skilled or otherwise, engaged in a large production [I don’t want to limit this to “manufacturing”] enterprise.  Gone are the days when one company can supply enough jobs to build a whole town in America, Silicon Valley burgs notwithstanding.

Adding to this outlook is a piece recently featured on CNBC’s Web site where one well-regarded investor proffered that artificial intelligence will make “most” current jobs “obsolete”. Robotics has a lot to do with that and Pittsburgh will hopefully continue to develop that expertise cluster.  But more generally, I believe the only real growth in employment will come from those jobs that can only be provided by one human being to another.  Medical research, health care, education, and to a lesser extent what are known as business services such as legal, accounting and sales.  Yes, oil and gas production provided a boost to Pittsburgh’s and the nation’s economy recently, but it has also declined almost as quickly due to its cyclicality.  And jobs in software development have been a boon to a number of local economies but aside from over-developing the Bay Area, Boston and Seattle, the increase in GDP is again, so uneven, that these industries seem to be drivers of the new income inequality.

Pittsburgh needs and deserves a more well-balanced economy and one that provides employment in areas that will generate higher incomes to more workers.  Many careers that are characterized as “creative” industries, while injecting elements of excitement into the local scene, are not those on which to raise a family or build an economic engine.  I hope Pittsburgh’s leaders in education, healthcare and government see the distinctions among various job creation project in light of the larger, much larger, and very rapidly changing global economic landscape.

To echo a recurring theme of my own and so many others, and as the only idea I can think of to end this piece, I have to note that educational attainment seems to be the key to income and quality-of-life development.  More discussions on that topic to come.