New Heights in Higher Education (by John G. Craig, Jr.)

Sydney J. Harris, now deceased, was a syndicated newspaper columnist who regularly wrote about things he learned while looking up information about an entirely different subject.  It is that spirit that I call your attention to the tables below.

They came to my attention as part of research we were doing at the Regional Indicator site in preparation for a report on how Pittsburgh had changed in the past 30 years.  The news hook was the much ballyhooed G20 economic summit of which you may have heard a word of two.  It seemed to me that that the role of our institutions of higher education had changed very much during the period and in the process produced  positive things for the region.  Data confirming that new reality was important to share if it could be obtained.

Unfortunately, the information did not arrive in time to make it into the Indicator project’s pre-summit reporting.  We had to be content with data documenting the metamorphosis of UPMC between 1980 and 2008, an extraordinary story in itself. (To see that earlier report click here for my report in the fall issue of Pittsburgh Quarterly.)

The first table here concerns the  University of Pittsburgh of which UPMC is a part.  However, with the exception of some of the data on National Institute of Health grants in its last section, this report deals with different matters than the published UPMC data.  It is most particularly concerned with documenting the growth in the size and quality of the student  population at Pitt’s Oakland campus.  The changes, particularly those in the last 15 years, have been significant.

 

The second table comes from Carnegie Mellon University and concerns two areas. The first looks at changes in student enrollment and pre-admission achievement levels.  The second concerns research dollars.  CMU, like Pitt, saw significant changes -- both qualitatively and in total counts.   Particularly notable at CMU is the increase in students from outside the United States, up just over 500 percent in the last 20 years, while total enrollment during the same period was up 44 percent.

Obviously, West Virginia University and dozens of other post-secondary educational institutions in this region would have to be part of any meaningful benchmarking effort,  But this simple accounting suggests to me that this is an aspect of our regional life that should be part of a regular system of benchmarking.  It has become much more important to the region’s general welfare.

For detailed data tables please click here to download the report.

Exploring women's health issues (by Tanya Kenkre and Bernard Goldstein)

The Pittsburgh region does not compare well with benchmark regions in indicators of women’s health, both for our white and black populations.  We evaluated a variety of measures that are used to measure adult women’s health, other than those related to pregnancy.  Data from the two most recent nationwide CDC telephone surveys show that in 2006 we were last and 2008 next to last among 15 comparable regions in mammography rates for black women.  For white women we were 14th in 2006, and for 2008 we are still below average, but not as dramatically.  When we looked at another test of proven value for preventing cancer, the pap test for early cervical cancer, white women in our region also do very poorly. In 2006 we ranked 14th and in 2008 we ranked last among the 15 benchmark regions.  Pap test rates for black women are not included in this indicator because we are not satisfied that the sample size of the most recent survey leads to reliable results.  Earlier survey results, however, on Pap smears for black Pittsburghers was as negative as it is for white Pittsburghers.  

Nationwide there is no difference between white and black women over the age of 40 in mammography rates in the past two years for which data are available, both being at 75.7%, while white women in benchmark regions report somewhat higher mammography rates than black women, 77.1% vs. 74.5%.  Both white and black women in Pittsburgh are well below these averages.  Again, it is black women who have the far lower rate (57.9% vs. 72.5% in white women).  

Why do we do so poorlyin these two important measures of disease prevention?  One possible partial explanation is that women in our area have relatively low rates of health care coverage.   For white women we are third from the bottom and for black women we rank last.  This is unlikely to be the full explanation – less than 10% of white women are not covered by a health plan while close to 20% have not had a pap test within the past three years and 27.5% over the age of 40 have not had a mammogram in the past two years.  20% of black women report not having health care coverage – twice the rate of white women, but again not likely to beenough to account for the difference observed in mammography and pap smear rates.

We also compared the percent of women who reported that they did not see a doctor because of cost in the previous year.  Although indirect, this might tell us something about whether cost issues played a role in the failure to obtain mammography or a pap test.    Again, black women in the Pittsburgh MSA have a higher rate of reporting that cost was a deterrent to see a doctor than did white women (15.2% vs 12.0%); but for this indicator black women in Pittsburgh did better than the national or benchmark averages for black women, while Pittsburgh white women did somewhat worse than the benchmark average and were equal to the national average for white women. 

How good are these data?   There is always the potential for faulty sampling or misreporting on telephone survey data.  Data problems in terms of consistency across some of the possible explanatory metrics are present, so we caution against overinterpreting the findings.  The limitations of these data sources are magnified when the population size becomes too small.  For example, the pap smear rates reported for African-American women were among the lowest in comparison with benchmark areas in 2006, but in 2008 were among the highest.  This most likely represents statistical variation among surveys due to the small sample of randomly chosen women.   Mortality, which is based on all death certificates, is a much more stable measure.  Accordingly, we place more reliance on CDC’s telephone survey data for white women in the Pittsburgh area as the sample size is larger; and more reliance on mortality data than on telephone survey responses. 

One approach to check on the validity of the benchmark approach is to evaluate whether the data conforms to expectations.  In addition to data on black and white women, the CDC also reports on Hispanic women.  Because we have created few low end jobs in recent years, the Pittsburgh MSA is thought to have had a low rate of Hispanic immigrants.  The Hispanic community, although small, is on average believed to be relatively more affluent and educated than Hispanic communities in the rest of the country.  As expected, and providing some support to the overall validity of the indicator data, for both 2006 and 2008 CDC reported a much higher rate of mammography, pap smears and health plan enrollment than for Hispanic communities in other benchmark cities, and a lower rate of having not seen a doctor because of cost considerations.   Hispanic women do better than white or black women in our MSA when examining Pap tests and mammography rates; they also do better than black women when examining rates of health care coverage and not seeing a doctor due to cost.  With respect to these last two measures, they do about as well as white women in our MSA.  Nationally they do worse than white or black women in all but mammography rates which are about the same. 

Finally, and most importantly, what difference does it make that white and black women in the Pittsburgh region have lower rates for preventive activities?  One way to check is to look at breast cancer rates in our areas as compared to the benchmark areas and the rest of the country.  (We could not look at cervical cancer rates because the incidence for black women is lower than acceptable for benchmark comparisons).  Unfortunately, the breast cancer mortality rates in the Pittsburgh region are higher for both white and black women than for the rest of the US or for the benchmark areas.  In our region, the breast cancer mortality for white women in 2004, the last year for which data are available, was 27.3 per 100,000, as compared to the benchmark average of 24.9 and the national average of 23.8.  For black women, the Pittsburgh MSA mortality rate for breast cancer was 34.2 as compared to the benchmark average of 31.7 and the national average of 32.3.   In comparison to other cities we are ranked 9th for black women; but for white women only Philadelphia had a higher breast cancer mortality in 2004.  We emphasize that the data can be expected to move back and forth through the years, but the findings are consistent.   Mammography is a proven preventive measure for the early detection of breast cancer when it is far more likely to be treatable.   Low mammography rates predict that more women in our area will die of breast cancer – and that is what is happening.

What's Next, Pittsburgh? (by Harold D. Miller)

The G-20 Summit is over, and the world finally knows Pittsburgh is no longer the dirty, smoky steel town pictured in the history books. Now it’s time to stop talking about how we recovered from job losses 30 years ago and start talking about how we can accelerate job growth over the next 30 years.

The fact that we’ve lost fewer jobs than most regions during the recession doesn’t mean we’ll grow more jobs than other regions when the recovery begins. In the years following the end of the last recession, the Pittsburgh Region’s economy had the 3rd worst job growth among our benchmark regions. In fact, the region never recovered all of the jobs it lost in 2002-2003 before the current recession hit.

As a result, the Pittsburgh Region has fewer jobs now than in 1999, whereas more than half of our benchmark regions still have more, even after losing thousands of jobs this year.

The real lesson for our future doesn’t come from the past several decades, but from what happened here a century ago. Pittsburgh was once a place where entrepreneurs came to start companies, find investors, and produce products sold worldwide. Companies like Alcoa, Heinz, PPG, U.S. Steel, and Westinghouse didn’t move here because of economic development recruitment efforts. They were started here by entrepreneurs and they grew to become not only major employers themselves, but to spawn thousands of jobs in supply firms, too. The companies’ decisions about expansion and hiring were made in headquarters located in Pittsburgh, not in other cities.

There’s an important difference between attracting facilities of companies headequartered elsewhere and starting companies that will be headquartered here. The former tend to look better on the economic development scorecard in the short run, because they bring lots of jobs all at once and make bigger newspaper headlines. But the companies founded and headquartered here may be more loyal to their home region when the going gets tough. For example, in 1996, one of the region’s biggest manufacturing firms, Mine Safety Appliances, experienced a cutback in orders for protective helmets (hard hats), and needed to close one of its plants because of overcapacity. The logical choice was the plant with the highest costs and lowest productivity. At the time, that was the Murrysville plant (just east of Pittsburgh). But thanks to CEO John Ryan's commitment to his and the company's hometown, he gave the Murrysville plant a chance to improve itself before the final decision was made. The workers themselves took on the challenge to improve productivity. Within six months, productivity had jumped from 75% to 86%. As a result of the improvement, Mine Safety closed a plant in Rhode Island rather than the Murrysville plant. The Murrysville plant continued to improve, and by 2000, it was named one of the Best Plants in North America by Industry Week magazine. It might never had the chance if Mine Safety Appliances was headquartered somewhere else.

A century ago, our economic assets were natural resources like rivers and minerals. Today, Pittsburgh’s biggest assets are technology and innovation. The transformation of Carnegie Mellon, Pitt, and UPMC over the past three decades into some of the leading centers for research in the world has given our region one of the key ingredients for successful economic development in the future.

But innovations don’t turn into jobs without a second ingredient: the entrepreneurs. Although we have some great entrepreneurs in the region today, we don’t have nearly enough modern-day Andrew Carnegies and George Westinghouses who take big risks and devote themselves to bringing an idea to life. Over time, Pittsburghers came to define success as working for someone else, rather than starting and growing a business. As a result, as PittsburghToday has reported, our region now has some of the lowest rates of entrepreneurship and new business formation in the country.

A third key ingredient is investment capital. No matter how good the idea or talented the entrepreneur, if a startup business can’t get the money it needs to grow, it will be forced to close or move elsewhere. Alcoa, for example, is here today because 120 years ago, inventor Charles Martin Hall couldn’t find capital in his home state of Ohio, but received the $20,000 in seed capital he needed from Alfred E. Hunt and a small group of investors in Pittsburgh. Similarly, many of our rapidly growing technology firms are here today because of the early stage investment they’ve received through individuals and organizations such as Blue Tree Allied Angels and Innovation Works.

Unfortunately, we don’t have nearly enough angel investors in our region to support the levels of entrepreneurship we need for the future. Here again, Pittsburgh is a victim of its own success. Most angel investors in other regions are successful entrepreneurs who have profited from the growth or sale of their companies and are looking to get involved in new entrepreneurial ventures. In contrast, many of the people in Pittsburgh today with the kinds of assets needed to make such investments have experience running large established companies, not entrepreneurial ventures. So organizations like Blue Tree, Innovation Works, and the new Pittsburgh Equity Partners provide mechanisms for individuals, corporations, and foundations in Pittsburgh to support angel investment even if they don’t have the skills or interest to become angel investors themselves. The challenge will be even harder in the year ahead if the state budget (whenever it finally is enacted) includes the 50% cuts in funding for entrepreneurship and technology development programs that have been proposed by the Governor and state legislators.

Although Pittsburghers can be justifiably proud of our high rankings on quality of life, we should be embarrassed that we rank near the bottom on lists of places to start a business. Attracting entrepreneurs and helping them find investors should be a central and visible piece of our region’s economic development strategy. It’s not enough to have our technology-based organizations working on it; it has to be a priority for all of our elected officials and civic leaders, as well as the average citizen.

There is no better time to focus on entrepreneurship than now – there are likely hundreds of potential entrepreneurs among those who’ve lost their jobs here over the past year, and thousands more across the country, as well as dozens of budding entrepreneurs each year at our colleges and universities. Let’s encourage them to start a business here as enthusiastically as we welcomed our G-20 visitors. (A shorter version of this post was published as the Regional Insights column in the October 4, 2009 Pittsburgh Post-Gazette.)

Holding Steady (by Harold D. Miller)

Jobs held steady in the region in August for the third straight month, giving even greater evidence that the recession has finally bottomed out here. The Pittsburgh Region has lost just over 32,000 jobs in the past year, or about 2.8% of our job base, and there has been essentially no change in those figures from June through August. (Although the total number of jobs in the region decreased by almost 3,000 between July and August, the number of jobs always decreases in August by a similar amount due to seasonal factors. On a seasonally adjusted basis, the number of jobs has been constant throughout the summer.)

The Pittsburgh Region continues to perform better than the U.S. as a whole; while job losses nationwide have slowed dramatically over the past several months, U.S. job losses continued to creep upward by a tenth of a percent per month over the past two months, in contrast to the stability here.

Similarly, the Pittsburgh Region continues to do better than most regions; the rate of job loss here was the 3rd lowest among our benchmark regions.

However, this is not true in all sectors. Workers in mining, construction, wholesale and retail trade, information, finance, and professional and business services have been less likely to lose their jobs here than their counterparts in most regions. But workers in manufacturing, higher education, hospitals, leisure and hospitality, and government have been more likely to lose their jobs here than elsewhere.

Wait a minute – we’re losing jobs in higher education and hospitals? Aren’t health care and higher education growth sectors? Not exactly – they’re recession-resistant sectors, which is different. Although jobs in higher education had been growing slightly until earlier this year, that has changed in the last two months, and we had 600 fewer jobs in colleges, universities, and professional schools in August than a year ago; in fact, we were one of the only regions with a significant higher education sector to report job losses. Whether this is a temporary phenomenon remains to be seen.

Similarly, after adding jobs for 17 straight months, hospital employment has declined slightly since June, and again we were one of only a few regions to see job losses in hospitals. Ambulatory health care (e.g., doctor’s offices) continued to add jobs in August, as did nursing homes, so on the whole, health care has continued to add jobs, but that doesn’t mean that no one in healthcare has been affected.

Our biggest job losses continue to be in manufacturing, and we continue to lose additional manufacturing jobs every month. As of August, we’ve lost 11,000 manufacturing jobs in the past year, over 11% of the manufacturing jobs that were here a year ago. That’s the 6th biggest loss of manufacturing jobs among our 15 benchmark regions. While that’s only half as bad as Detroit, which has lost 22% of its manufacturing jobs in the past year, it’s twice as bad as Boston, which has lost fewer than 5% of its manufacturing jobs in the past year.

Another group that’s been disproportionately affected here are temporary workers. Employment services businesses have cut 3,400 jobs over the past year, or 17.1% of employment a year ago. That’s the biggest percentage reduction of any sector in the region. Many businesses cut temporary jobs first when a recession hits, so it’s not surprising that we’ve lost jobs in that sector; almost every region in the country has. But it’s not clear why we’ve lost more temporary employment jobs than so many other regions.

Overall, while it’s very good news that total job losses here seem to have come to a halt, there are still problems in many important sectors, particularly manufacturing, that could create ripple effects in the months to come and slow our region’s recovery.

Have We Finally Hit Bottom? (by Harold D. Miller)

There are growing signs that the recession in the Pittsburgh Region is finally hitting bottom. After four straight months of accelerating job losses between January and May, the rate of job losses in the Pittsburgh Region increased by only one-tenth of a percent in the two months between May and July and total job losses in the region now stand at 32,800, compared to 32,000 in May. (Although the preliminary figures for June that were reported last month showed a slight improvement in jobs between May and June, the revised figures showed that there was actually no net change in the net number of jobs lost in June; the preliminary figures for July show a slight increase in job losses when comparing the July 2008 – July 2009 change to the June 2008 – June 2009 change.)

It’s important to note that while the total number of jobs in the region decreased by almost 15,000 between June and July, the number of jobs always decreases in July by a similar amount due to seasonal factors. In percentage terms, the decrease this year was similar and even slightly less than it has been in each of the past 8 years, which is why the numbers indicate that the rate of job losses has flattened out.

This stabilization is not unique to Pittsburgh. Job losses nationwide also flattened out in July, and 5 of our benchmark regions saw slight reductions in job losses between May and June. On the other hand, 3 of our benchmark regions (Charlotte, Kansas City, and Philadelphia) saw increases in job losses that were 3-4 times as big in percentage terms as what we saw in the Pittsburgh Region. As a result, the overall rate of job loss in the Pittsburgh Region over the past year remains the 4th smallest (i.e., 4th best) among our benchmark regions.

What has not hit bottom in Pittsburgh is our manufacturing job losses. We lost an additional 1,200 manufacturing jobs between May and June – more than 1% of the total manufacturing jobs in the region – and 800 of those jobs were lost in June. That was the third biggest increase in loss of manufacturing jobs among our benchmark regions during that period of time. Three regions (Baltimore, Kansas City, and Richmond) actually saw small increases in manufacturing jobs over the past two months. The Pittsburgh Region’s manufacturing sector has now lost almost twice as many jobs as any other sector of our economy.

As in previous months, the only sector of our economy that has seen any significant net job growth is health care and social services, which is now 2,900 jobs ahead of last year at this time. The mining sector has also seen a small amount of job growth – 200 jobs – much of which is likely a result of the boom in drilling for gas from the Marcellus Shale.

In addition, however, several sectors of the economy have improved significantly over the past couple of months; although they have many fewer jobs than they did a year ago, the leisure and hospitality sector, construction, and information sector account for fewer job losses now than earlier this year. Job losses in other sectors have continued to worsen slightly, however, including the financial services sector and the professional and business services sector. The biggest losses over the past few months have been in government jobs, particularly public education jobs, but this may be a temporary problem due to the state budget crisis.

So is the worst over? Although there are many positive signs, it’s still too early to say that there won’t be more bad news coming. The continuing losses in manufacturing jobs are particularly troubling, because they may be harbingers of additional job losses in supplier firms in the months ahead and they may slow the recovery in other sectors such as retail. However, the stabilization of the U.S. economy, and positive reports on many other economic indicators here and abroad, give us reason to hope that we may soon be on our way to recovery.

As We See Ourselves (by Tanya Kenkre and Bernard Goldstein)

A reasonably effective way to evaluate overall health status is to simply ask.  A question on the annual Behavioral Risk Factor Surveillance study by the US Centers for Disease Control is “Would you say in general your health is excellent; very good; good; fair; or poor?”   The data are shown by CDC as the percent reporting only fair or poor health. 

To find out how people in our MSA respond to this question, we constructed three year moving averages in which we added the data from the most recent year while subtracting the data from the fourth previous year to determine the average response.  We did this because of the relative instability of data from any one given year.  Posted are three moving averages covering 2003-2005; 2004-2006 and 2005-2007.  

Relatively speaking, in 2005-2007 blacks self-reported poorer health status than whites nationally (20.6% vs. 13.8% ); in benchmark cities (20.0% vs. 11.9%)  as well as in our region (19.9% vs. 13.8%).   Women self-report poorer health than men nationally (17.4% vs. 15.7%) and in benchmark cities (14.5% vs. 13.1%) and, by a slight margin in our area (14.5% vs. 14.1%).    

In general, people in our MSA report fair or poor health at a rate similar to the benchmark averages.  Among benchmark cities, the people in Minneapolis and Denver consistently report better health and those in Detroit worse health status. 

When the 2009 data are reported, it will be interesting to see whether winning both the Super Bowl and the Stanley Cup is associated with people in our area feeling better about their health. 

Big numbers and insightful comparisons (by John G. Craig, Jr.)

With the June job numbers now in hand (see analysis by Harold Miller), an overall look at the regional economy in the midst of recession seems appropriate.  The national downturn in housing, financial services and consumer spending, which the government dates to December 2007, hit other parts of the nation much earlier than it did Pittsburgh and in many instances much harder.  But at mid-year, it is now beyond argument that the economic consequences of the downturn are palpable. 

What follows are 10 indicators from PittsburghTODAY.org that collectively define the recent regional economic experience, though it remains to be seen whether the worst is over or yet to come.  The comparisons with other regions are offered only for purposes of context and not as measures of “good” and “bad”; there is not that much these days that is “good” for Americans when it comes to the economy.

Unemployment rate:  The regional rate in June was 7.7 percent, the lowest of any benchmark region.  The average unemployment rate for the 14 regions against which Pittsburgh measures itself was 9.8 percent and the national rate was 9.5 percent.  The highest rate of unemployment in a benchmark region in June was 17.1 percent in Detroit, followed by 12.4 percent in Charlotte.

Unemployment and Labor Force: There were 95,028 unemployed people in Pittsburgh in June, the highest June number in 10 years.  Only four regions had fewer unemployed people than Pittsburgh in June: Richmond, Milwaukee, Kansas City and Indianapolis.  The number of people working in June or looking for work was 1,239,086 - a record for the month.  The previous high was 1,230,820 in 2002. These numbers are also preliminary and subject to adjustment.

Home prices: Every three months, the Federal Housing Finance Agency updates a 12-month housing appreciation index, using average price changes in repeat sales and refinancings.   Pittsburgh was one of only three benchmark regions to experience an increase in this most recent index, up 1.08 percent.   Only Charlotte and Denver also recorded positive value changes, both under 1 percent.  The steepest declines were in Detroit, down 11.47 percent, Baltimore, minus 6.44 percent and Minneapolis, minus 4.92 percent.

Foreclosures:  Pittsburgh Regional Indicators tracks both total foreclosures and foreclosures as a percentage of total housing units.   In 2008, the most recent year for data, the Pittsburgh total foreclosures was 10,013 – up 148 percent from 2007’s 4,040.   The rate of increase was higher than that of all but two benchmark regions, Boston and St.  Louis.   On the other hand, the total number of foreclosures in Pittsburgh last year was lower than those in all the benchmark regions excepting Richmond and Charlotte.   A second indicator, foreclosures as a percentage of total housing units, found Pittsburgh with the lowest rate of all benchmark regions in 2008 at 0.9 percent.

Bankruptcies:  The first quarter 2009 total for the federal district which includes Pittsburgh was 3,359.   Only two regions, Philadelphia and Charlotte, had fewer bankruptcies in the quarter.  Last year, Pittsburgh bankruptcies totaled 12,874.   That put Pittsburgh in fifth place among benchmark regions.   Three years ago it was 11th place, as only four benchmark regions had more bankruptcies than Pittsburgh.   The region’s relative position on this measure has improved as economic times have become more difficult. 

Manufacturing:  Though Mr. Miller has provided a comprehensive description of the current data on jobs, an additional word is in order on this category, because it is both a large in numbers and high paying work.  The 10,300 loss in manufacturing jobs in June was not only the highest loss recorded by any jobs category in the month, but the 11 percent reduction from the May 2008 was the largest  percentage move of any  jobs category.   Clearly, this component of the regional economy is affecting more than the businesses and workers immediately involved.  

Cost of living:  The ACCRA index measures a basket of items each quarter.   Numbers from each participating region are aggregated to get a composite average for everyone which is 100; individual regions are ranked above or below that average.  Only St. Louis and Indianapolis reported lower costs of living numbers than Pittsburgh among the benchmark regions in the quarter ending March 31.   In 2008, Pittsburgh’s indexed number was 92.2.  The only benchmark regions with a lower number than Pittsburgh were St. Louis, 90.7, Indianapolis, 91.7 and Cincinnati, 92.

Wages:  By the most recent measure, wages in Pittsburgh have been weakening.   In the 3rd quarter of 2008, the average weekly wage was $813, up from $798 in the 3rd quarter of 2007.   Only two regions, Cleveland and Indianapolis had a lower average weekly wage than Pittsburgh in the quarter.   The U.S. average was $841 and the average for 14 benchmark regions was $882.  Six months ago, the average weekly wage in Pittsburgh was higher than averages in five benchmark regions.

Venture Capital: Pittsburgh has been consistently in the top half of benchmark regions when it comes to venture capital both in dollars and number of deals.   The region is consistently in a group of four most-active regions that immediately follows Boston and the Silicon Valley, which outstrip all other regions in the United States in this activity.   Pittsburgh’s performance in 2008 held form in 2008 even as the recession arrived.  However, in the 1st Quarter of 2009, Pittsburgh dollars were down to $7.28 million, placing it in behind all but five benchmark regions.   Its deals numbered 10, relatively higher compared to other regions, but half the 20 executed in the first quarter of last year. 

Exports:  This Commerce Department measurement does not appear until well after the fact, but in the most recent report (2007) the Pittsburgh’s export total of $9.705 billion was at the mean for benchmark regions.  Detroit’s $49.2 billion more than doubled Boston and Minneapolis exports, both at $21 billion-plus.   Philadelphia, St. Louis and Cincinnati also had a higher export totals than Pittsburgh, though the region, along with Kansas City, showed the highest increase over 2006 – an 18 percent increase.

A Little Good News, At Last (by Harold D. Miller)

If you’ve been wishing for a little good economic news, the Pittsburgh Region got some in June. After four straight months of accelerating job losses from January through May, jobs actually improved by a small amount in June. The metro area’s 12 month job losses now stand at 31,200 (a 2.7% loss between June 2008 and June 2009) vs. 32,000 last month (a 2.8% loss from May 2008 and May 2009). (Note that these are twelve-month changes, not one-month changes. Due to seasonal factors, the number of jobs ALWAYS increases from May to June. However, if that May-to-June increase is smaller than in other years, it means that jobs have been lost, and if it’s bigger, it means that jobs have been gained. This year, the increase in jobs from May to June was bigger than it was last year, both in absolute and percentage terms, which means that job losses measured on an annual basis were smaller.)

The small uptick here appears to be a function of the unique structure of our region’s economy, not improvement in the national economy, since the U.S. economy did not improve in June. In fact, the twelve month rate of job loss nationally worsened from just under 4.0% in May to just over 4.2% in June, while it improved from 2.8% to 2.7% in our region.

Moreover, among our benchmark regions, Pittsburgh was one of only 5 which did better in June than in May. A number of other regions did much worse, including Charlotte, St. Louis, Cleveland, and Detroit. Overall, our region remains well below average in job losses during the recession. The Pittsburgh Region has the 3rd lowest rate of job loss among our benchmark regions. Detroit has the worst rate of job loss – it has now lost 175,000 jobs in the past year – 1 out of every 11 jobs. Cleveland has lost 63,000 jobs, more than twice as many as Pittsburgh. Charlotte has lost 54,000 jobs, which is twice as many in percentage terms as our region.

Although the news in Pittsburgh overall is good, it’s still bad in some important economic sectors in the region. The region’s manufacturing sector continued to lose jobs at an accelerating rate in June. We have now lost over 10% of the region’s manufacturing jobs in the past year. That’s the 12th biggest drop in manufacturing jobs among the top 40 regions. Job losses in both the financial sector and in wholesale trade also increased in June, and while the healthcare sector continued to add jobs, the rate of job creation slowed, which reduced its ability to offset losses in other sectors. The rate of job creation in the natural resources and mining sector also slowed significantly in June, although this represents only about a hundred jobs.

On the other hand, jobs in the leisure and hospitality sector, which had been a major contributor to overall job losses in the region, recovered slightly in June. Although jobs in this sector always increase in June, the growth between May and June was actually larger here than in the previous two years, whereas nationally, it was smaller. However, even with this small improvement, our leisure and hospitality workers have experienced the 3rd worst loss of jobs among our benchmark regions over the past year.

Jobs in Pittsburgh’s retail sector also improved in June. Retail workers here have not suffered nearly as much as those in other parts of the country in the past year. We’ve lost 2.2% of our retail jobs (2,800 out of 130,000 a year ago), compared to losses of 5% or more in places like Milwaukee, Charlotte, Denver, and Baltimore.

It’s too early to call this the beginning of a recovery for the region. It’s only a small improvement – one-tenth of a percent. It’s only one month, which is not enough to declare a trend; in fact, job losses also reversed slightly back in January before they headed downward in the following four months. And the data are still preliminary and subject to revision next month. However, there’s a possibility that the revisions may make things look even better -- the revised data for May were slightly better than the preliminary data reported for May a month ago (the revised figures show our region lost 32,000 jobs from May 2008 to May 2009, compared to the preliminary figure of 33,600 reported previously), so hopefully any revisions to the June figure will also make things look better here, not worse. And hopefully, July will confirm that job losses have actually stabilized.

More Bad News for Pittsburgh Region Workers (by Harold D. Miller)

Although everyone has been looking for some good economic news, there is, unfortunately, no sign that the recession is abating locally. Indeed, May was the worst month so far in terms of job losses in the Pittsburgh Region. Between May 2008 and May 2009, the Pittsburgh metro area lost 33,600 jobs, a 2.9% drop. For the second month in a row, the region has fewer jobs than it did in 1999, i.e., an entire decade’s economic growth has been lost.

Don’t be confused if you hear reports saying that the region added jobs in May. It’s true that there were 5,700 more jobs here in May than there were in April. But there are always more jobs in May than there are in April due to seasonal hiring patterns. The key fact that is that the increase in jobs between April and May this year was smaller than in any year since 1995, and as a result of that and the losses in previous months, there are 33,600 fewer jobs in May this year than there were in May of 2008.

We’ve still lost fewer jobs than most major regions in the country, but we’ve been slowly slipping behind some regions that were previously doing worse than we were. As of May, among our benchmark regions, Boston and Kansas City had lost fewer jobs on a percentage basis in the past year than the Pittsburgh Region did.

The most troubling news continues to be the significant and accelerating loss of manufacturing jobs in the region. In just twelve months, the Pittsburgh Region has lost over 9,000 manufacturing jobs – 1 out of every 11 manufacturing jobs that were here last year. Manufacturing jobs are among the highest paid jobs in the region and typically have some of the best health and retirement benefits, so losing a manufacturing job has a particularly large negative impact on the regional economy.

Up through the beginning of the year, Pittsburgh’s manufacturing sector was one of our strengths – even though we were losing manufacturing jobs, we were losing them at the 5th smallest rate among the 40 largest regions. But in May, Pittsburgh had the 7th highest rate of manufacturing job loss among our benchmark regions. The manufacturing sector is now the biggest contributor to job losses in the region.

The second biggest contributor to job losses continues to be the leisure and hospitality industry. Over 7,000 jobs have been lost in that sector over the past year. This is not only a large jobs loss relative to other sectors here, it's the 2nd biggest percentage loss in that sector among our benchmark regions.

Construction is the fourth largest contributor to local job losses – we have 4,900 fewer construction jobs in May than a year ago – but unlike in the manufacturing sector and the leisure and hospitality sector, construction workers have fared better here than in most regions. Although our 8.2% loss of construction jobs is high, it's only half as big as the losses of 15% in Milwaukee, 16% in Boston, and 19% in Indianapolis.

Health care and higher education still have more jobs than last year, but even there, the rate of growth has slowed significantly from where it was last year, particularly in higher education, likely reflecting the impacts of smaller endowment earnings.

If you saw the recent news stories about a Brookings Institution report saying that Pittsburgh’s economy ranked 18th best out of 100 regions, it’s important to recognize that the data used in that report were old news – they only measured employment and unemployment changes through March, whereas Pittsburgh’s job losses have accelerated rapidly in April and May. Also, little noticed was the fact that the Brookings report also ranked the region only 59th (42nd worst) over the past year in the change in gross metropolitan product, i.e., the value of goods and services produced in the region. That is probably a reflection of the accelerating job losses in high-wage sectors such as manufacturing that began here early in 2009.

It’s not likely that Pittsburgh’s economy will experience any significant turnaround before the U.S. economy recovers, and national job losses continued to worsen in May. Moreover, even when the U.S. economy turns around, Pittsburgh may lag behind as it has in past recessions.

Job Losses Accelerate (by Harold D. Miller)

Unfortunately, the latest regional job numbers released just before the start of the Memorial Day Weekend aren't anything to celebrate.  The Pittsburgh Region lost nearly 28,000 jobs between April 2008 and April 2009 (1 out of every 40 jobs in the region).  The most depressing news is that the total number of jobs in the region has now fallen below 1999 levels for the first time since 2003; in other words, all of the net job gains the region has made in the past decade have been lost.

The rate of job loss here is still lower than the U.S. as a whole and lower than all but one of our benchmark regions.  However, our rate of job loss increased significantly in April; if that keeps up, we will stop looking so good relative to other regions. 

In particular, one of the reasons our economy had been doing well relative to others was that we had been losing manufacturing jobs at a much lower rate. Unfortunately, that is no longer true; in April, our rate of manufacturing job loss was higher than 7 of our benchmark regions.

Our health care and higher education sectors continue to be the only significant net job generators.  In addition to manufacturing, our region is being hurt by large job losses in the leisure and hospitality sector relative to other regions (particularly among arts and entertainment organizations) and large job losses in professional and business services and construction (although those losses are still lower in percentage terms than most regions).

Since the U.S. as a whole has now been losing jobs for a full year, we're lucky that we've only been losing jobs for seven months and at much lower rates.  But since the U.S. is continuing to lose jobs, it seems likely that things will get worse here before they get better.

Salute of Jeff Lantz and fellow photographers

In December 2007, Pittsburgh Today introduced a new home page design that featured as a centerpiece images from our 22-county region.  Jeff Lantz of Springdale has been one of our community contributors from the very first week.  In recognition of the excellence of his work, for the next two weeks we will be running five photos of his that poignantly capture the tragic April 4 events that cut short the lives of three Pittsburgh police officers.

 
(Jeff Lantz at home with his dog)

Lantz heard the news report and hopped in his car to record the events in Stanton Heights.  On his own initiative, he stuck with story through the week until the officers were laid to rest following a moving service on the campus of the University of Pittsburgh.  You will notice three other Lantz photos on the site that were part of our most recent sequence which will continue until mid-June.  You may also see more of Lantz’s photography at www.flickr.com/fuzzzy.

In the Pittsburgh Today photo viewer you’ll find a ‘Where is it?’ button that includes a county map and information about the subject of the photo.  It is designed to reinforce the idea of Pittsburgh: a major, beautiful, vibrant and diverse region of the United States that involves parts of three states.  This viewer is also a communal enterprise and Lantz has not been alone in making contributions, but has as associates individuals and organizations also involved in activities with a regional reach. 

We are very appreciative of the regular contributions of Pittsburgh History and Landmarks Foundation, under the leadership of Arthur Ziegler and Ethan Raup; the Port of Pittsburgh, Jim McCarville and Mike Brinza; Rivers of Steel Heritage Area, Jeff Leber; and the Pittsburgh Filmmakers, Charlie Humphrey and Sue Abramson.

Thank you all very much,

Region Indicators Organizing Committee