Our Employment Problem, Part 2

OK let’s start out with this: it has nothing to do with the weather.  Or even the perception of the weather. One person’s chaff is another’s wheat, you might say.  So to all those regional crepe-hangers who claim Pittsburgh’s growth is held back by its weather, I say “you need to get out more”.  Do you think higher growth locales like Chicago, Minneapolis or Boston have better weather?  Really?  OK. Now let’s get serious.

I still believe Pittsburgh and the Tri-State region’s job creation woes can be helped with more, better, increased, and improved education of its citizens.  For this piece allow me to present empirical evidence based on anecdotal reports, with a nod to a couple statistics.

In Part 1 of this commentary I referenced the “Tribune Review” article that featured a Fayette County resident working as a part-time supermarket cashier.  The gentleman is 20 years old and has already moved back to Fayette County after trying his job luck in Orlando, FL where he found he couldn’t make ends meet even in that high growth market.  But now he’s thinking of moving back to Orlando.  Let’s not “pile on” when analyzing this young man’s path however, at age 20, with no defined job skills and what would seem to be no post high school degree, his prospects in Fayette County or Orlando or just about any other economically integrated area on planet Earth are severely limited.  Changing locations will solve little if anything long term.

Also as mentioned in Part 1, the Uber Advanced Technology Center’s Director, John Bares, is seeking dozens more staff members and is recruiting candidates from California’s Bay Area.  I imagine there will be some resistance by residents of weather-perfect northern California over a move to a less benign Great Lakes climate.  But notwithstanding the list of positive traits that Pittsburgh can offer aside from climate, why, with over two dozen major colleges and universities in the region producing thousands of graduates annually, does Mr. Bares need to turn to California for staff?  The only answer is a disparity of skill levels but more specifically it is clear Pittsburgh’s institutions are not educating enough residents with skills needed in this economy.

My final anecdote comes from Austin, TX, a city that Pittsburgh is getting a lot of comparison with these days.  In the past year, Austin has seen thousands of high tech jobs created from companies as diverse as Apple (which has over 1,000 employees and has announced another 2,300 more to be hired in the next 18 months), Home Depot [financial security software development], General Motors (software jobs, not manufacturing), Athena Health [medical software] and Conde Nast (again, software programming for the publisher’s digital media).  And the reason cited by all these new entrants into Austin’s job market: the availability of talent.  Austin has a fifth the number of higher education institutions that Pittsburgh does.  But the University of Texas is a powerhouse school with large programs in engineering, computer science and artificial intelligence.  And to say UT constantly churns out graduates in those fields is putting it mildly.

So here’s the statistical comparison set, and pardon that it’s a bit dated from the 2010 US Census, specific to educational attainment for Pittsburgh’s and Austin’s Metropolitan Statistical Areas (a large city and its surrounds that are connected by employment numbers).  In 2010 Pittsburgh’s MSA had 28.8% of its population with a bachelor’s degree or higher.  Austin’s MSA had 46.6% of its population with bachelor degrees or higher.  Does education translate into economic success? I believe so.  Using per capita income as one countermeasure, US Census statistics for samples taken in 2013 have Austin’s MSA pegged at 21st in the country with per capita income at $24,500.  Pittsburgh is 90th with per capita income at $20,900.  In absolute dollar terms, not huge, but as measured on the overall ranking, and when you account for the nearly $4,000 per person difference across similarly sized metro areas of 2 million plus people, the comparison of income levels is striking.

It’s education.  Period.  As I finished this piece I had trouble developing a summary paragraph.  But later in the day I read the following in the May/June 2016 issue of “Foreign Affairs” magazine.  With credit to Jacob S. Hacker and Paul Pierson in their excellent article “Making America Great Again: The Case for the Mixed Economy”, allow me to quote verbatim.  “the most important thing that big states [defined in their piece as “countries” not US “States”] started doing was educating their citizens.  More growth commenced when people rapidly increased their ability to do more with less.  They were able to do more, in part, because they knew more, and they knew more, in part, because they were taught more.”  QED.