Regional Insights: Students and seniors make city seem poor

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A new report from the Census Bureau says the City of Pittsburgh is one of the poorest large cities in the United States. Median household income in Pittsburgh in 2007 was $32,263, the fourth lowest level among the central cities in the top 40 regions. By comparison, median income in Charlotte, N.C., was $52,690, more than 60 percent higher.

Why are incomes in Pittsburgh so low? Surprisingly, part of the answer is that Pittsburgh has so many colleges and universities. Most college students don't earn much money while they're in school, and so cities that have more college students will have lower overall income. And that's exactly what's happening in Pittsburgh.

Pittsburgh has a higher proportion of college students than almost any other major city in the country. In 2006, the Census Bureau estimated that more than one of every seven (15.5 percent) residents of Pittsburgh area was in college or graduate school, the second-highest percentage among the central cities in the top 40 regions. By comparison, fewer than half as many (6.8 percent) of the residents of Charlotte were in college.

As a result, nearly one of every 10 (9.3 percent) households in Pittsburgh is headed by someone under the age of 25, the second highest percentage among the central cities in the top 40 regions. Only Austin, Texas -- another big college town -- has a higher percentage of young households.

Not surprisingly, households headed by people under age 25 have lower income than older households do. Nationally, median income for households under 25 is $26,747, a little more than half of the overall median household income of $50,740. So cities such as Pittsburgh that have more young households will have lower overall median income. And in college towns, the households under age 25 are even poorer, because more of them are in school and not working. In Pittsburgh, their income is unusually low, though -- median income for households under age 25 is only $13,342, the lowest level by far for that age group of any city in the top 40 regions. This may be due to unemployment and low wages among young people not in college.

It's not just young people in college that make Pittsburgh look poor. It's also senior citizens. One out of every four households (24.4 percent) in Pittsburgh is headed by someone age 65 or older, the second highest percentage among the top 40 regions. Only Miami has more senior households. In contrast, only half as many (12.2 percent) of the households in Charlotte are 65 or over. Since households 65 years or older have lower incomes than others, Pittsburgh's overall income will be lower than other regions simply because it has more households in that age group.

If you look at households in the 25 to 44 age range, the median income in Pittsburgh is much better -- $43,369 in 2007, ranking 27th among the central cities in the top 40 regions. That's still low, but hardly the worst in the country. Unfortunately, Pittsburgh has the second-lowest percentage of 25- to 44-year-old households among the top 40 regions. Some of that is likely a legacy of the region's economic collapse in the 1980s -- the 18- to 22-year-olds who left the region in search of jobs then would have been in the 25 to 44 age group today.

Although Pittsburgh's unique age distribution contributes to its low ranking on income, it's not the only factor. The city's small physical size makes it easier than in other regions for upper-income workers to live outside the city but still work in the city. But even at the regional level, income levels within each age group here are below most other regions. Some of this reflects the lower cost of living in the Pittsburgh region, but it's also due to relatively low salary and wage levels for many types of jobs. More on that in a future column.

Harold D. Miller is president of Future Strategies LLC, a management and policy consulting firm based in Pittsburgh, and adjunct professor of public policy and management at Carnegie Mellon University. He publishes , an Internet resource on regional economic development issues, and contributes to regional indicators at .


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