Yet despite that vibrant impression of economic reality, official statistics also indicate that the number of persons in the labor force with jobs fell imperceptibly last year (0.1 percent or 1,600 fewer working) and the region’s labor force fell 0.6 percent (6,400 persons). Why is Pittsburgh’s labor force shrinking and why are fewer people working when the economy is growing?

Paradox 2: Anecdotal evidence flies fast and furious from the mouths of politicians, policy wonks and the public at large that Pittsburgh’s youth can’t find good jobs upon graduation - that we are losing our future to faster growing regions which offer more job opportunities and are arguably perceived as more dynamic places to live. Meanwhile anecdotes are swapped just as widely of the general difficulty among many regional employers to find suitably skilled workers. How can Pittsburgh be facing a lack of job opportunities and a dearth of capable workers, simultaneously?

What explains these apparent contradictions?

a) The statistics are wrong. When asked about paradox 1, economists expressed disbelief, especially of the labor force numbers. Mark Zandi, RFA’s chief economist, pointed out that the data draws on a pretty small sample of the population and that its accuracy erodes with distance from the last census year.

Furthermore, PNC Bank’s Stuart Hoffman points out that while trends in the labor force and payroll jobs measures agree when examined over many years, they can be out of sync and appear contradictory for short periods. Given the growth of payroll jobs and the falling unemployment rate, we should expect some labor force growth. And already, data for March 1999 shows a 1.1 percent growth in the labor force over March 1998.

b) The rhetoric of anecdotes misleads and exaggerates the truth. Emotional tales of our sons’ and daughters’ flight to greener pastures resonate in the retelling. But ignored are the stories of those who remain gainfully employed and of other new hires who bring fresh ideas and energy from beyond the region’s borders.

Anecdotes offer powerful messages, but rigorous analysis and accurate statistical measures are critical to sort fact from fiction.

c) Demographics I - The labor market’s task of replacing its retirees is hampered by the fewer workers of the baby bust generation, according to Zandi. Since Pittsburgh’s population tends to be older than other regions, the problem is amplified here. So the labor force shrinks even though jobs are being created.

The baby boom echo will soon reverse one side of this trend, though its full impact is nearly 10 years away. Until then, these demographics are likely to aggravate labor shortages. Generally, demographic trends can not be altered significantly, if at all, with local policies. However, it is necessary to be aware of the extent of their impact. And in some cases, policies may help on the margin, for example, by encouraging hiring or retaining older employees.

d) Demographics II & III - Low rates of foreign in-migration into Pittsburgh is cited by Roberta Wilson, a Pennsylvania labor market analyst, as a hindrance to faster labor force growth. Also, she points to a national slowing in the trend of rising labor force participation by women. Both trends impair labor force growth in the region.

Foreign immigrants follow friends and relatives. Pittsburgh could seriously consider a policy of establishing new or reintroducing old pipelines of migratory flows from other countries. Not on ly could it begin to ease the tightening labor market, but it could increase demand for the region’s older housing stock.

e) Labor mismatch - Jobs offered by local companies and the skills available from local workers do not correspond. In a dynamic economy, the types of jobs available are constantly changing. Anticipating and communicating employers’ needs can speed local responses for job switches and timely retraining, but when all else fails, labor mobility will send local residents packing and local employers searching outside the region.

f) Information disconnect I - Searching for jobs and employees is a costly process for both workers and business. If it is poorly managed, it reduces the success for both parties. Improving the flow of information around the job search process can be facilitated by local policy efforts that take advantage of centralized information bases that no one individual or company could create or access on their own.

Recent efforts in Pittsburgh and Allegheny County are considered a model for the state in developing a one-stop center for its career link effort, accord ing to Rob Rogers, executive director of the Commission for Workforce Excellence.

g) Information disconnect II - Although individuals have strong incentives to learn valuable skills for the work place and employers have strong incentives to ensure their own supply of trained labor, arguably their most crucial factor of production, the necessary connections sometimes fail to be made.

Ralph Bangs, a University of Pittsburgh researcher, suggests employers need to take more initiative to anticipate their own needs and work with area training schools and organizations. Wilson points out the need for mentoring of younger workers to help them establish goals, to establish realistic expectations of a job and to learn the value of temporary jobs for gaining work experience.

h) Poor quality jobs do not attract workers. In a 1997 study by the University Center for Social and Urban Research at the University of Pittsburgh, 64 percent of employed Allegheny County residents worked full time, full year and earned at least $6.10 per hour in 1997 dollars. The other 36 percent of jobs were considered "poor quality." These are not the kind of jobs likely to attract people to enter the labor force or move to the region.

The PG Benchmarks data, using a different measure, show Pittsburgh with the lowest rate of growth in "good jobs" at 1.1 percent. The region does better when comparing the share of good jobs created to total jobs created from 1993 through 1998 - 35.3 percent for 11^th place.

i) Recruitment efforts of employers are sometimes inadequate in times of tight labor markets and their problems are sometimes overstated. A 1991 Pitt study found that some employers fail to broaden recruitment efforts and raise wages as labor market conditions demand, that they exaggerate their job openings in public statements and harbor unrealistic skill expectations.

Employers’ false expectations and recruitment mishaps spawn misleading anecdotes and fuel the labor mis match.

j) Economic competition I - Rapidly growing regions sport more job openings and the appearance of more opportunity. However the odds of actually getting a job may be lower since far more people are competing for the jobs in the hyped markets. Still, the relative differences in numerical opportunities create images that detract from Pittsburgh and fuel the contradictions.

Pittsburgh’s annual job growth rate was 1.1 percent from 1993 through 1998 - the lowest among the 15 metro areas. Most local policy makers would have us change both the reality and the hype, creating faster job growth and improving the region’s image. But theory suggests that these changes would increase competition in the labor market and reduce opportunities for home-grown talent - highlighting a contradiction in goals that is routinely overlooked. Do we want to help local businesses or help local residents?

k) Economic competition II - Real disadvantages for skilled workers exist with other areas that offer some combination of higher wages, lower cost of living or nicer amenities. This form of competition becomes more widespread and more difficult to overcome when labor markets are tight. For while Pittsburgh’s unemployment rate is low, other metropolitan regions are experiencing extremely tight labor markets which drives salary packages higher.

Pittsburgh’s 4.5 percent annual unemployment rate compares unfavorably to the other 14 metro areas based on preliminary data. The unemployment rate in Minneapolis-St. Paul fell to 1.9 percent in 1998; only Miami with 5.8 percent had a higher rate than Pittsburgh’s.

l) All of the above. Unraveling the layers of complex relationships that form these two basic contradictions is not simple. All of these factors play some part; none should be held out as the definitive answer and no response the definitive solution.