Pittsburgh's Job Growth Isn’t Helping the Unemployed
The fact that Pittsburgh lost fewer jobs during the recession than other regions means that even with slower job growth, Pittsburgh is still ahead of other regions compared to the immediate pre-recession days. Indeed, Pittsburgh is one of only 8 major regions with more jobs today than in July 2008. (The only other regions that have seen positive net job growth over the past four years are Austin, Boston, Dallas, Houston, New Orleans, San Antonio, and Washington DC.)
Most of the recent job growth we’ve experienced has been in industries other than those which lost the bulk of the jobs during the recession. Our two biggest job creators over the past three years have been the professional and business services industry and the leisure and hospitality industry; those two sectors created more than half of our net new jobs since 2009.
But when jobs are created in different industries than where they were lost, many of the people who lost jobs will have serious problems finding work. Jobs in law firms and accounting firms require different training and skills than jobs in manufacturing and construction, so new jobs in the former don’t necessarily reduce unemployment in the latter. This is not just a Pittsburgh problem, but a national problem. The U.S. Bureau of Labor Statistics looked at long-tenured workers (those who had worked for an employer for more than three years) who had been laid off during the recession, and determined that only 56% had found work by January 2012. Of those who had, 14% were only working part time, and another 21% were earning 80% or less of what they made in their previous job.
What do we need to do?
First of all, regional economic development efforts need to concentrate on manufacturing, where most of our jobs were lost during the recession. Although manufacturing has been one of the leaders in national growth, it has lagged behind in Pittsburgh. We won’t make up this gap with one or two new plants; we need to encourage more entrepreneurship and help our existing manufacturing firms to expand by creating a more competitive business climate and ensuring manufacturing businesses can get the capital they need for growth.
Second, job training efforts need to focus on preparing individuals for jobs in sectors where job growth is likely to occur. In many manufacturing firms, jobs aren’t increasing simply because there aren’t qualified workers to fill them. We can’t count on higher education and health care continuing to drive our economy, because the unaffordably high costs of both will likely result in slower growth or even cutbacks over the next few years. In fact, many high school graduates would be better off pursuing careers in manufacturing than immediately going off to college.
Although it’s great that Pittsburgh continues to get high national rankings for quality of life, it doesn’t mean much if people who want to live here can’t find good jobs. Regional leaders should commit themselves to getting the unemployment rate back down to pre-recession levels by Labor Day 2013.
(A version of this post appeared as the "Regional Insights" column in the Sunday, September 2, 2012 Pittsburgh Post-Gazette.)