A Splash of Reality

A splash of reality might be welcome a midst the euphoria of self-congratulation and pumped up civic pride accompanying the many accolades awarded to the New Pittsburgh. While the list of beauty pageant first-places grows profusely, cold, harsh facts might cause one to pause before jumping on the “We’re the Greatest!” band wagon.

The most sobering data came two weeks ago from Doug Heuck’s Pittsburgh Today website. Heuck reports: “The Pittsburgh region added 2,200 jobs between March 2015 and March 2016, a 0.2 percent increase. That percentage was below the benchmark average of 2.1 percent and was the lowest of all benchmark regions.” [my italics]. So we must factor this dead last finish among 15 demographically similar cities among the many first prizes collected for urban chic.

This report should silence the braggarts for those even marginally concerned with the fate of nearly 6 out of 10 of the county’s workers that count as “low wage, low skilled.”  Even more alarming, the data shows:

…in the 12-month period, manufacturing jobs declined by 5.8 percent (the largest decline among benchmark regions), and transportation and utilities jobs declined by 2 percent (the second-largest decline among benchmark regions).

Sectors which gained jobs in the 12-month period include leisure and hospitality (up 5.7 percent and the third-largest increase among benchmark regions), other services (up 2.2 percent) and education and health services (up 1 percent but still the smallest increase among benchmark regions).

Even the most intoxicated cheerleader for Pittsburgh knows that the industries where job growth actually declined in the region are where the best paying jobs resided. And the industries where jobs grew most vigorously (leisure and hospitality, other services) are where poverty wages are paid. Even the region’s signature “Meds” and “Eds” sector only grew by 1%, the lowest growth of the 15 counterpart regions!

While not wanting to pee on the parade of local pundits hailing the Pittsburgh “miracle,” it seems apparent that the latest renaissance does not accrue to ordinary Pittsburghers, the proverbial masses. Their prospects seem to be worsening.

Others seem to be recognizing a counter-narrative to the happy tale eagerly sold to the natives. In the City Paper (Made in Pittsburgh?, 4-20-27/2016), staff writer Ryan Deto voices the criticism that Pittsburgh’s leadership caters to and coddles the tech sector over manufacturing. His diligent research unearths several manufacturers who sought to locate or remain in Pittsburgh while receiving no help or encouragement from local agencies. At the same time, he highlights the maniacal, fawning pursuit of technology firms, enterprises that bring neither many jobs, nor opportunities for less skilled employment.

And KDKA investigative reporter Andy Sheehan pokes a hole in the luxury housing boom that followed in the wake of the technology mania. Interviewing local residential real estate mogul, Hoddy Hanna, Sheehan confirms what many of us suspect:

KDKA’s Andy Sheehan: “You don’t think we have enough people to fill these buildings?”

Hoddy Hanna: “I don’t see where they’re going to come from.”

Hanna, of Howard Hanna Real Estate, says much of the luxury apartment boom here in Pittsburgh and in cities nationwide is being fueled by easy financing and unrealistic expectations.

Hanna says much of the job growth in the city has leveled off, and another burst of employment will be needed to sustain the boom.

There’s going to be a bubble somewhere in the rental housing market in the next year and half,” he says.

It makes sense to all but those blinded by the “We’re Number One!” eye wash: Meager job growth coupled with a massive luxury residential build-out will trip up the housing market. And if Hanna is to be believed, sooner rather than later.

Yet the cheer leading continues. The usual suspects– business leaders and foundation heads– beat the drum for the New Pittsburgh. The Pittsburgh Pet-Gazette gives generous column inches to Buhl Foundation head Frederick Theiman. Theiman characteristically piles laudatory boiler plate on top of boiler plate, citing “our incredible quality of life,” a truth he bizarrely sees brought forth as “not simply an impression but an objective reality” by the unfriendly G-20 military operation. He repeats the now familiar, tiresome Pittsburgh catechism:

Only recently has the momentum turned around. From its appearance at the top of virtually every metropolitan rating system to its national image, from the resurgence of its downtown to the growth of the tech, meds, and eds communities, Pittsburgh is now clearly on the rise.

Tasty Kool Aid, but nothing here for the 60% of the local work force stuck in low-wage, deadend jobs, retirees, the handicapped, or disadvantaged. Nothing here for the homeless or those dislocated by playgrounds for the new elites. Nothing here for the college graduates saddled with huge debt while working for tips in Pittsburgh’s heralded restaurant renaissance or in minimum wage call centers.

Venture capitalist Sean Sebastian and tech guru Paul Graham have recently urged their thoughts on Pittsburgh’s future. Both see more and more investment in the tech sector as the way forward. Graham, who fancies himself the Socrates of Silicon Valley, counts the acclaimed Pittsburgh restaurant renaissance as the first step of a hopeful progression towards a three-rivers tech hub. All we need is more and more investment capital thrown at the feet of local start ups. Oddly enough local banks have been parsimonious towards this program, while our local political leaders have bent over backwards to smooth the way with public funds.

Graham is somewhat notorious for his quirky, self-serving defense of economic inequality, a defense that engages philosophical pretension, special pleading, and logical howlers. But in the end it comes down to the fact that inequality can’t be bad because Paul Graham and his colleague’s interests increases it:

You can’t prevent great variations in wealth without preventing people from getting rich, and you can’t do that without preventing them from starting startups.

So let’s be clear about that. Eliminating great variations in wealth would mean eliminating startups. And that doesn’t seem a wise move.

It’s hard to imagine an “argument” more full of broken logic or full of itself.

Graham is only one tiresome voice of many touting the process of “turning rustbelts into brainbelts.” In The Smartest Places on Earth, economist Antoine van Agtmael and journalist Fred Baker extol the virtues of old industrial cities reinventing themselves as technology centers. In the words of a recent book reviewer, “[t]he authors assert that close cooperation between government, academia, and the private sector” will end up “generating innovations and helping troubled communities thrive.”

But reviewer Marc Levinson (Turning Rustbelts Into Brainbelts, The Wall Street Journal, April 15, 2016) is skeptical of the tech miracles. In fact, he is down right dubious. He cites the once touted “Massachusetts Miracle,” a science and technology vision dating to the 1980’s. Today, “Gov. Dukakis’s centers of excellence are long gone.”

Levinson shows that even the examples of success stories cited in The Smartest Places on Earth are suspect at best. Akron, Ohio, for example, now hails itself as the “Polymer Valley.” It is a strange success story, however, that leaves the majority of the population untouched (perhaps like Pittsburgh?). Levinson recounts that the surrounding county is aged, with wages below the national average and employment peaking over a decade ago. Some success story.

And consider Albany, NY, another area heralded as a hub of nanoscience. Levinson points out that the title was won by offering “one of the biggest taxpayer handouts ever offered to a private enterprise in the United States.” To achieve that lofty title, local taxpayers had to shell out $1.2 billion– the equivalent of nearly $1 million per job. Levinson suggests that the money could have been better spent on “plant worker’s wages.”

While rust belt mayors, consultants, local elites, and academics continue to sell a tech makeover as the magic elixir for economic recovery, the evidence is questionable, at best, that their programs will approach their promised goals. But far more troubling is the fact that these costly experiments in urban prospecting offer nothing more than slim pickings to those abandoned earlier by profit-seeking manufacturing corporations. The low wage, low skilled majority have no role in the technology economy embraced by urban planners. Surely, there’s a better way to lead a city forward rather than kicking it’s long suffering residents to the curb.

Greg Godels

 

 

 

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One thought on “A Splash of Reality

  1. In a capitalist system the “low skilled majority” will always be at the bottom of the income pyramid. The decline in the standard of living for our workers was inevitable once our free trade policies eliminated the barriers that used to offer some protection for our workforce from competition against the rest of the world’s “low skilled majority”. We have two options; ameliorate the impact of this competition on our workforce via public policies that improve the quality of life for the working poor, and supporting our populous in gaining valued skills. We need to do much more of both.

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