Harold Miller on Slow Job Growth

Harold Miller has a very interesting post up today about job growth in the Pittsburgh region. The thesis: "[W]e’re not creating the jobs needed to attract new residents to the region. In fact, there are over 16,000 fewer jobs in the Pittsburgh Region today than there were six years ago."

Harold argues that job losses across the board can be traced to an "uncompetitive business climate." He also notes that Pittsburgh's growing dependence on jobs in health care poses risks, given the likelihood of future regulation of that sector. A question: Where should job growth be occurring -- that is, in what sectors of the regional economy?

Comments

7 Responses to "Harold Miller on Slow Job Growth"

Harold D. Miller said... 5/06/2007 4:33 PM

Ideally, we should be creating jobs in a wide range of sectors, as we were in the late 90s, rather than in just a few, as we are now.

We can't expect to have dramatic job growth in what I call the "population-dependent" sectors -- retail, personal services, public schools, etc. Even job growth in health care is inherently affected by whether the population is growing, although it is also affected by whether the population is aging, which is what has contributed to the growth in health care here.

Ideally, what we want is growth in the so-called "traded sectors," businesses whose customers come predominantly from outside the region. Manufacturing is the prime example of that. In the late 90s, the Pittsburgh Region was the only part of Pennsylvania that was growing manufacturing jobs, and more importantly, it was one of the only regions in the entire country outside of the south/southwest that was growing manufacturing jobs. Every part of the country lost manufacturing jobs during the recession, and most parts of the country have been slow to recover manufacturing jobs, too.

Other sectors, like finance, professional services, etc. have both a local and traded component to them, but we should be able to achieve higher growth in these sectors than we have been experiencing recently -- we had greater growth in these sectors in the 90s, even though we were also losing population then.

Mark Rauterkus said... 5/06/2007 5:36 PM

We should be playing to our strengths, of course. And, we should be working to boost our weaknesses.

Evolution takes small steps.

The biggest thing is government. And, that sector (government) can't do the work of business.

We do need 'competition' -- and competition must flourish. We need competition in government.

But, to your Q. Let's think about exporting and importing medicine.

Anonymous said... 5/06/2007 9:40 PM

Which sector should we look for growth?

I believe you need to stop looking at the old definitions of sectors. They will take you to places the region can't win. Take a look at the intersection of:

- growth in multiple traded-sectors
- this region's strengths

...and you'll find our region's R&D and engineering competencies and capacities. We have a rich past in this area with the Mellon Institute of Industrial Research, Westinghouse and the other corporate and university R&D labs. We have a rich present and future with top-notch computer science, robotics and medical research/engineering capabilities. We have a continuous supply of great talent in and out of the universities at CMU and Pitt, and UPMC.

We need to stop looking at the way the rest of the world wants us to look at them, and create our own way. Growth comes from innovation -including innovative ways at looking at yourself. This region has a very, very compelling story to tell regarding our capability that is second to none. Plus, it connects our past to our future. Make Pittsburgh the place to go for "off-shoring" R&D and engineering. Talented (and highly paid) scientists, engineers and researchers will come here to be with like-minds...just like what UPMC has done...and what Mellon Institute did in the early 1900s...and Google is doing in Pittsburgh today. Companies will send their R&D&E work here because it's the best (and at prices they can't get in the big cities.)

The region's 'leaders' need to change their lenses first, and then invest their efforts and our tax money appropriately.

Anonymous said... 5/07/2007 10:33 AM

The solution to this never ending problem is actually quite simple: make this region the most attractive place for business in the country. Reduce regulations, kill the union preferences, drop the taxes, and we’ll start seeing things improve across the board, not just in select pockets. Per usual though, the challenge comes from finding the will to bite the bullet just once to tip the scales towards a more business friendly environment. Of course with knuckleheads like Rendell, Onorato, and Ravenstahl calling the shots, the chances of any of these guys rising up beyond their petty parochial interests is as likely as the wife and I winning the lottery. It just ain’t gonna happen. Until the populace rises up and demands accountability and results, nothing will change here.

Mark Rauterkus said... 5/07/2007 8:01 PM

It was posted, in part,
The region's 'leaders' need to change their lenses first, and then invest their efforts and our tax money appropriately.

-- well --

I say, change the region's elected leaders first. Then, perhaps, you'll have a change in their lenses. Don't change for a typical new politician with the same party and priorities.

I'm worried about the efforts. And, I'm less driven to 'invest' tax monies into hardware elements.

Schultz said... 5/07/2007 11:40 PM

Is it the jobs? Chris "sid" Bream doesn't think so but I agree with Mr. Miller. Is it the jobs and the types of jobs that are being created in the Pittsburgh region.

Below is a list of the destinations that Tepper School of Business grads left Pittsburgh for full time employment. Note that Pittsburgh was 13% of the full time grads (around 150 students). I am pretty sure that at least half of the 13% were students who already lived and worked in the burgh prior to b-school. What does this tell us? Well, for one thing, the high paying jobs with career potential are in the northeastern and mid-atlantic US. Without knowing for sure who went where I can name the firms that hired 10 of that 13%, the other 3% started their own businesses or joined a small company or startup.

Another thing it tells me, and this is also coming from the mouths of my former classmates, is that Pittsburgh doesn't have enough to offer to keep these students in the burgh once they finish school. The students come for two years but we can't keep them, why? Weather is a factor but in the end it is the jobs.

Pittsburgh companies - are you listening? We know the cost of living here is low but if you want to keep graduates here in town then you have to pay them. Its about competition and when an MBA graduate has to decide between staying here for $70,000 or moving to Philadelphia or New Jersey for $110,000, regardless of COL it is going to be an easy decision unless Pittsburgh companies start paying better.


Carnegie Mellon University - Tepper School of Business
Class of 2006 % of Full-time MBA graduates accepting offers in following regions:



Northeast 25.38%
(New York City 15.38%)
Mid-Atlantic 23.85%
(Pittsburgh 13.08%)
Southeast 5.36%
Southwest 6.15%
Midwest 15.38%
West 13.08%
International 10.77%

C. Briem said... 5/08/2007 1:05 AM

huh? I don't think it's about jobs? where did that come from?

Sid spells his name wrong.

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