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.

Our Nagging Employment Problem, Part 1

Chris Fleisher in a weekend Pittsburgh “Tribune-Review” article [go here: http://triblive.com/business/headlines/10310205-74/growth-job-region] nails it when reporting on the surprisingly stubborn low job growth in southwestern Pennsylvania.  Job creation in our region is quite simply the most important issue the region faces.  It’s not an exaggeration to state that this is the Pittsburgh region’s existential issue.

Over the past couple years since I’ve been putting my thoughts to electronic “paper” in this blog, I think it’s clear that most of my pieces focus on jobs and income.  Both must increase if the region is to continue to provide residents with the lives they deserve.  And I admit it: I am completely stymied as to why the region continues to lag woefully behind just about every other place in the country when it comes to job creation.  For all the accolades Pittsburgh now garners, in the final analysis, those count for diddly-squat if residents can’t make a good living.

It’s been widely reported that an Uber executive publicly noted that he could “hire 100 more people tomorrow if…” he could find candidates with the right qualifications.  That’s NOT a “good problem” to have.  So here we are: Pittsburgh attracts one of the world’s hottest “new economy” companies to set up a major facility and now they have trouble staffing it.  What gives?  What about the hundreds of eager computer science grads who come out of the region’s colleges and universities?  Not qualified?  Oh but then we read that Pittsburgh is still having trouble retaining young people who are leaving for higher paying areas like the big coastal centers. Really?  Is it simply that companies like Uber can come into town paying third-world salaries because Pittsburgh has a lower cost of living than Palo Alto?  I bet not. So is it just that Pittsburgh’s college grads are so much more sophisticated than those coming out of UNC who stay in the Research Triangle, or those out of UT who then stay in Austin, or those silly grads from Stanford and Cal who triple up in $4000 a month one bedroom apartments in San Francisco?  I bet not and I’m sure I’ll win that one.

You understand my confusion?  And concern.  No region holds onto all its children.  There are a million ways in this world to make your success and there is a whole planet’s worth of locales in which to do that. But if a region is not generating enough new jobs to retain those individuals for whom staying put is the easiest path, how can we possibly expect to attract and hold new residents who will by definition expand the economic and intellectual vitality of the area?

However, having said all that, I still believe there’s a solution here.  Part 2 to follow.

Something Good and Something Getting Better

Something good – really good - is that the August Wilson house in the Hill District is finally getting the long term funding it deserves as the home of what many believe [this blogger for one] is Pittsburgh’s greatest 20^th century playwright.  This is an example of the vision of many individuals being translated, transformed really, into concrete action.  Bravo. More of this please.  The Hill District has been the too-often unacknowledged cauldron of so much creativity vis a vis its music [primarily jazz] scene, journalism [The “Pittsburgh Courier”], arts [photographer Charles ”Teenie” Harris] and theatre [Mr. Wilson’s work as well as other theatre and cabaret ventures].  Let us celebrate that history to build a new one for what some of us believe can become the living room atop downtown’s front door entrance.

Getting better is the region’s air quality.  In the latest American Lung Association “State of the Air” report on the air quality in the nation’s metro areas, Pittsburgh is still at an unacceptably low level – 14^th worst in the nation.  BUT that is better than just a few, like five, years ago when we were the second worst metro area, only outranked by either Los Angeles or Bakersfield.  More importantly, there has been steady improvement in all measurement categories year over year.  Let’s keep it going.  It’s amazing that a very small number of industrial emitters, and a couple as far away as Weirton, WV, have such a detrimental effect on Pittsburgh’s air.  Still, progress is progress.  Pittsburgh got complacent for a bit when the skies brightened after decades of grey.  Let’s continue to support those who work to get our air quality into the TOP 10.

Audrey Russo Gets It!

What an exciting thing to read in the latest NEXTPittsburgh Web site edition comments by Audrey Russo of the Pittsburgh Technology Council.

Yes, yes and more yes those of us that love Pittsburgh are thrilled with all the positive attention our city has recently received from both national and international sources, some of whom, other than those ubiquitous “best of” lists, actually matter.  But there is a discomfort about this and I suspect it comes from informed Pittsburghers realizing there remains a lot missing from those rosier views of our fair city.  Audrey Russo is one of those informed realists.

Here’s the money shot quote from NEXTPittsburgh’s piece with the cumbersome title “What We Love And Don’t Love About All The National Press Pittsburgh Is Getting”:

“Despite the significant press, new Census Bureau estimates show the Pittsburgh metropolitan area lost 5,051 people last year. It’s down 3,240 overall since the 2010 census, the only one of the nation’s 30 largest metro areas to have lost population.

That worries Audrey Russo, president and CEO of the Pittsburgh Technology Council, who works to cultivate relationships with investors outside the region, because telling the city’s story isn’t enough.

“There’s not real investment happening here and let’s face it, that’s what matters,” says Russo, who acknowledges she’s “the biggest fan” of cool things happening in Pittsburgh but she’s troubled by the population loss.

Pittsburgh doesn’t need to grow as quickly or as much as Raleigh, N.C., but it needs to keep up, Russo says. “It’s not a marketing campaign—it’s not the days of New York saying, ‘We’re the Big Apple.’ The world is a different place and you can’t fool people. It’s a campaign to get investment here. It’s a matter of designing public policy to be attractive, and making sure the relationships are cultivated.””

Here’s the link to the whole article.  And thank you Audrey Russo.  There’s still a lot of hard, fun, rewarding, frustrating work to be done on building a better Pittsburgh.  Long may Ms. Russo and people like her work in and for Pittsburgh.

http://www.nextpittsburgh.com/

Local Pride and Commitment

With Jamie Dixon demonstrating that his heart has always been in Fort Worth despite all these years of telling Pittsburghers how much he loved being here and at Pitt, I found it heartening to read that local high tech success story Duolingo is showing real commitment to staying in Pittsburgh.

Even more than the fickle world of college athletics [and who can blame players or staff for chasing gold, given their limited life spans within that ecosystem] the high tech game is one where start ups have to seek environments conducive to their success.  In other words, go to where the money, personnel and support resources will do the most to ensure an enterprise’s longevity.

It was reported last week that Shadyside-located Duolingo is taking 15,000 square feet of office space in East Liberty and plans to almost double its employee count within the next year.  That’s all great news but what caught my eye in the company’s announcement was the founders’ statement: “We’re proud to be a Pittsburgh-based company and to stick to our roots despite having been advised by leaders in the space to move elsewhere.”

Moving to greener pastures of funding is absolutely the norm in the high tech start-up world. But it has all too often been the path taken by many promising new companies started and fed in Pittsburgh’s nurturing environment as soon as they bring in some Boston or Silicon Valley or Research Triangle funding.  As I’ve railed against many times in this blog, the bleeding of local talent has to stop.

Duolingo is one company proving it can make itself a success right here in Pittsburgh. They may be the billion dollar public “hit” that our high tech scene has been waiting for and finally breaks the dam to where a succession of large high tech enterprises call Pittsburgh home.

Happy 200th Birthday Pittsburgh!

And it’s a monumental event that demands recognition, especially in this blog.

Two hundred years is a long incorporation, especially in our relatively young nation.  The sweep of history not only witnessed by but also made where the three rivers converge is rarely seen by other metropolises.  So everyone who now lives in Pittsburgh, or within Pittsburgh’s orbit, or has at one time lived in Pittsburgh, or visited Pittsburgh, or is simply aware and concerned that Pittsburgh and places like it prosper and grow, let them raise their glass to the next 200 years. We’ve seen so many great things come about recently. The best is yet to come.

Here’s to Pittsburgh, the essential American city.

Where's the Commitment?

Today brought news that Cohera Medical, a growing medical device company headquartered on Pittsburgh’s North Side, is leaving town for Raleigh, North Carolina. Raleigh is the biggest city in the Research Triangle Park area which has an established base of medical and biology centered companies.  It’s where a lot of Philadelphia based pharmaceutical firms established offices when looking for a sunnier clime and friendlier tax environment.  So while this makes sense on a number of business levels, I have to say that this sort of outmigration happening once a local company is nurtured to a sustainable phase has got to stop if Pittsburgh is to economically progress in any meaningful way.

The galling element of this story is that Cohera Medical is a spin out of the University of Pittsburgh.  The company had just received a $50 million investment by New York investors KKR and I have no doubt is under much pressure to now produce on a scale proportionate to that investment.  But I must point a finger at Pitt and ask how much of a role they could have played in helping this bio-med company maintain its Pittsburgh base?  Did Pitt even try?  What of Pitt’s vaunted efforts to build enterprises in the region as an outgrowth of their medical research?

Where’s the commitment Pitt?