Pittsburgh’s city fathers may be crestfallen at the news that Toledo is more of a hotbed for advanced industries than the Steel City. But they can take comfort in the fact that a picture is worth a thousand words.
A Brookings Institution report last week ranked Pittsburgh 45th among 100 major metro areas in terms of the concentration of advanced industry jobs. Cities that have heftier proportions than Pittsburgh’s — where the jobs account for 8.8 percent of employment — include No. 1 San Jose-Sunnyvale-Santa Clara, Calif. (30 percent); No. 12 Provo-Orem, Utah (12 percent); and No. 30 Toledo (9.4 percent).
But it was Pittsburgh that was featured in the website video that the Washington think tank used to convey the importance of advanced industry jobs. The spot features Aquion Energy, a start-up company spun out of Carnegie Mellon University that makes sodium-ion batteries at the former Sony plant in Westmoreland County.
“Places like Pittsburgh, with their sophisticated technology assets and experienced work forces, epitomize the kind of synergies a city can provide to a new company,” Brookings’ Mark Muro, co-author of the report, told viewers.
The report documents the number of metro area jobs in 50 key industries, a list that covers everything from chemicals to car manufacturing, aerospace to architecture, and steel making to software. The think tank measured how much of a region’s jobs base the industries accounted for in 2013, as well as their share of a region’s output.
Pittsburgh finished in the middle of the pack by most of those measures. “Some of the rankings may not reflect all of Pittsburgh’s strengths,” said co-author Scott Andes.
In the Pittsburgh metro area, 102,880 advanced industries jobs generated $18.2 billion in output during 2013, accounting for 14.4 percent of the region’s economy, Brookings said. The average advanced industry job paid $78,380 vs. a $50,230 average for all industries.
The think tank identified architecture and engineering as the biggest advanced industry employer in the Pittsburgh region, with 18,630 jobs in 2013. That sector was followed by computer systems design, management consulting, and iron and steel products. No. 9 on the list was the oil and gas industry, which many believe is one of the region’s biggest job generators.
The ranking is misleading because of a shortcoming in the data, Mr. Andes said. Although the jobs numbers that Brookings used are the best available for the type of project it undertook, they fail to capture a good chunk of some jobs.
For the oil and gas industry, the 3,020 Pittsburgh oil and gas jobs that Brookings cited exclude contractors that energy companies hire, Mr. Andes said.
Driller Range Resources employs more than 5,000 people in southwestern Pennsylvania, but only about 400 of them are on the company’s payroll, spokesman Matt Pitzarella said. The rest are contractors in a range of industries, he said. They include trucking companies that have several hundred drivers who only work for Range, Mr. Pitzarella said.
Mr. Andes said the data flaw also resulted in auto industry employment in Tennessee being under-counted because of the number of contractors that industry uses.
Nationwide, 12.3 million people were employed in the 50 advanced industries in 2013, accounting for about 9 percent of total U.S. employment. Those jobs accounted for about 17 percent of the U.S. economy, Brookings said.
The average advanced industry worker received total compensation (wages and benefits) of $90,000 in 2013, almost twice as much as the average worker outside those industries, the think tank said.
As impressive as the numbers may sound, they are not as impressive as they used to be. Brookings found that advanced industry jobs accounted for more than 11 percent of the work force in 1980.
Brookings blames several factors, including federal tax policy, reduced private sector research and development spending, and losing ground to global competitors in terms of patents. The institution said another factor was trade policies that generate massive trade deficits in communications equipment, motor vehicles, pharmaceuticals and other advanced industry goods.
“Advanced industries power our national and regional economies, but their preeminence is in no way assured — and in fact, it’s challenged,” Mr. Muro said. “If we want to reclaim broadly shared opportunity in the United States, we are going to need to shore up the global competitiveness of our advanced industries.”
Len Boselovic: 412-263-1941 or email@example.com.