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Regional Insights: Pittsburgh remains a good place to be in the recession
Sunday, December 07, 2008

Where's the best place to live during the recession? Pittsburgh is increasingly looking like the place to be if you want to hold on to your job or find another one. Although the United States lost nearly 1.2 million jobs between October 2007 and October 2008, the Pittsburgh Region has 7,600 more jobs than it did a year ago and more jobs than in any October in our history.

Our region now has the sixth lowest unemployment rate among the 40 largest regions in the country and we've had the ninth best job growth rate over the past year. In contrast, more than half of the other large regions have been losing jobs. Detroit has been the hardest hit, losing more than 55,000 jobs. But it's not just rust-belt regions that are suffering: Phoenix has lost more than 49,000 jobs, Atlanta has lost 45,000 and Miami has lost more than 40,000.

What's the secret to Pittsburgh's success? A big part of it is "eds and meds" -- our large health-care and higher-education sectors, which created 5,300 jobs here over the past year. Caution is in order, though: We've become very dependent on these two sectors -- 1 out of every 5 jobs in our region is in health care or higher education, the second highest percentage among the top 40 regions. Although these are the two most recession-resistant industries nationally, they can also suffer when the national economy sags. The University of Pittsburgh Medical Center and West Penn Allegheny Health System each has announced hundreds of layoffs since the October job figures were tallied.

Fortunately, the region's strengths are broader than health care and higher education. We have 3,400 more jobs in professional and business services than a year ago, the fifth highest growth rate in that sector among the top 40 regions. We've also added 1,500 construction jobs over the past year, thanks to the many building projects around the region.

The news is not all positive, however. Over the past year, we've lost 1,300 jobs in transportation and utilities -- the seventh largest loss of such jobs among the top 40 regions. We've also lost 1,300 jobs in the retail sector, 500 jobs in the information sector and 500 jobs in other services.

Consequently, it's not surprising that regional unemployment has been increasing at the same time that jobs have been growing. Moreover, some people who still have a job may be working fewer hours, taking pay cuts or paying a greater share of health-care costs, making it harder for them to make ends meet.

We also have 700 fewer people working in manufacturing than a year ago, but that's good news when you realize that 36 of the 40 largest regions lost more manufacturing jobs than we have.

Moreover, local manufacturers are complaining that they can't find qualified workers, so many of those 700 jobs may be vacant, rather than permanently gone.

Even regions that appear to be doing better than Pittsburgh may not be. For example, while Charlotte, N.C., has had slightly higher job growth than Pittsburgh over the past year, much of that growth has been in lower-wage sectors such as retail and tourism. In contrast to Pittsburgh, Charlotte has lost 2,900 manufacturing jobs in the past year, more than 3 percent of its manufacturing base.

How long can we keep bucking the national trend? It's hard for any region to fight the riptide of a global recession, but that doesn't mean we can't try.

You can help keep the regional economy afloat by:

• Spreading the word that we have jobs here as well as affordable housing. This is a unique opportunity to reverse the net outmigration that's plagued us;

• Buying local. Use Pittsburgh-region products and services whenever possible; and

• Supporting entrepreneurs. Startup businesses will be a key to rapid job growth once the economy turns around, but they need banks and investors to help them through today's tight credit markets.

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 www.PittsburghFuture.com, an Internet resource on regional economic development issues, and contributes to regional indicators at www.PittsburghToday.org.
First published on December 7, 2008 at 12:00 am