Report: Pittsburgh's economy 'prosperous' but leaving some behind
March 2, 2017 8:00 AM
Workers walk on top of the Birmingham Bridge with the Gulf Tower in the background.
By Daniel Moore / Pittsburgh Post-Gazette
As the country healed from the Great Recession, the Pittsburgh region’s economy exhibited clear signs of economic prosperity not seen in most other metro areas.
From 2010 to 2015, worker productivity shot up 10 percent, average annual wages increased 9 percent and the overall standard of living rose 13 percent in the Pittsburgh region, according to new data released Thursday by The Brookings Institution.
Those three benchmarks helped earn Pittsburgh a third-place ranking out of 100 metro areas — behind only San Jose and Houston — in the Washington, D.C.-based research organization’s annual look at how the largest American cities stack up on a variety of economic measures.
But, while the value generated by Pittsburgh’s economy has outpaced others, the growth has not necessarily translated into new jobs or rising incomes for the region’s middle class, particularly for African-American residents.
Chad Shearer, a lead author on the report, said Pittsburgh’s economic engine was powered by industries that are high-value and productive work: Energy, manufacturing, technology and professional services fed into the region’s gross metropolitan product — a local measure of GDP — during the five years studied.
In particular, the boom in shale gas drilling seen across southwestern Pennsylvania accounted for the bulk of the economic progress.
“To me, looking at the numbers, Pittsburgh’s in a pretty good situation,” Mr. Shearer said. “A lot of its growth is coming from productive, high-paying sectors. Those gains are being shared by a broad swath of the region’s residents.”
Payroll positions grew by just 3.2 percent, which ranked Pittsburgh 95th in the country.
“Not every place has to be posting huge job gains,” Mr. Shearer added, saying that Pittsburgh’s economic recovery following the recession in 2008 has been “slow and steady,” starting from a much better place than other metro areas.
Pittsburgh made progress on median wages and saw declining poverty rates throughout the entire recovery, while most metropolitan areas caught up all at once, Mr. Shearer said.
The Brookings numbers do not account for a sharp downturn in oil and gas production, which fell when fuel prices dropped in 2015. The value of those businesses lies largely within their massive capital investments in machinery and the profits those companies earned, Mr. Shearer explained.
While Pittsburgh produced the seventh-fastest growth rate for average annual wages in the Brookings data, the report suggested the middle class grew at a slower rate.
The median wage grew 7 percent overall, but it was uneven for various sectors. The median wage among African-American residents in Pittsburgh plummeted by 20 percent, putting the region near the bottom of all metro areas reviewed.
The discrepancy in wages and employment opportunities among minority groups in Pittsburgh comes as no surprise, said Melanie Harrington, president and CEO of Vibrant Pittsburgh, a nonprofit economic development organization.
“That lack of critical mass in terms of various different diverse groups really creates a challenge, and contributes to isolation from opportunity,” she said.
Mr. Shearer echoed that thought. With Pittsburgh’s slow and steady job growth, it has not seemed to attract new populations of people to give it a significant boost.
Overall, the Brookings report’s findings “illustrate the challenge that national and local leaders face in building a more advanced economy that works for all,” the authors concluded. They suggest that economic growth alone, “even growth that produces rising living standards, does not reliably assure better outcomes for all groups in a metropolitan area.”
While all but two metro areas in the report saw the value of their economies rise, just 53 saw a rise in median wages.
Daniel Moore: email@example.com, 412-263-2743 and Twitter @PGdanielmoore.
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