Monday, October 25, 2010

Jobs, Please?

A Pittsblog reader and a student at an elite MBA program in an Eastern city, wants to relocate to Pittsburgh and work in a management position that has the kind of upside that, this person reports, is offered by firms from peer cities (Cleveland, Cincinnati) that are recruiting on campus.  But this person is finding that the doors here are mostly closed to outsiders; there are zero Pittsburgh firms coming to look for graduates of this particular school.  My correspondent writes:
I actually tried looking for an internship last summer but did not find the recruiting infrastructure where it should be - not just compensation but also in terms of communication, role, vision, and timeline.  I had thought, and hoped, that I would be able to find management opportunities [in the Pittsburgh region] with significant growth potential and immediate responsibilities, but I sometimes wonder if being a geographic outsider hurts considering the extremely local business culture that seems to exist.
The short answer is, of course, "yes."  And this is entirely consistent with my current operating premise that the Pittsburghers who are in charge of Pittsburgh cannot change Pittsburgh -- cannot grow Pittsburgh -- cannot evolve Pittsburgh.  Social patterns here are just way too entrenched.  Those of you who are building Pittsburgh 2.0 -- tech entrepreneurs, neighborhood entrepreneurs, social entrepreneurs -- be sure to build "social APIs" into your thinking:  ways that you and your team can connect with folks outside of Western PA and they can connect with you. 

A project for the ExPat Network, perhaps?


C. Briem said...

If we could really come up with an explanation for why the prospective graduate can not get a job here... I would place a large bet that local employers know what the salary range is for graduates of an 'elite MBA program in an Eastern city' and are just unwilling to even consider it. What is the average starting salary for say a Harvard MBA these days? $120K? more? I bet even those going into nonprofit sectors approach $100K. Just not salaries supported locally. Why that is we could debate, but it is what it is when it comes to hiring.

Mike Madison said...

Maybe true re: what the salary scale actually is. But why would Cincy and Cleveland recruit at Harvard? Are the salary scales in those cities so different? Plus, I can't imagine that a Harvard MBA would look at Pittsburgh and expect the same money that would be available even in Philly or Chicago. At that age and that stage of a career, you relocate to Pittsburgh for the mission and the promise, not the near-term cash.

Jim Russell said...

But why would Cincy and Cleveland recruit at Harvard?

My guess is that both cities don't have the local supply of talent that Pittsburgh has. Among its Rust Belt peer group, Pittsburgh growth in per capita income and educational attainment is remarkable. It is even impressive nationally.

Also, Cincinnati and Cleveland might have more trouble retaining local talent. Or, cooperations in both cities are used to going to Harvard. At some point there was a need and its proved to be worth the trip.

MH said...

Among its Rust Belt peer group, Pittsburgh growth in per capita income and educational attainment is remarkable.

Per Wikipedia, Allegheny County and Hamilton County had a per household media income of about $39k and a per capita income of about $22k. Hamilton County was a bit higher. Comparing only the cities shows much the same picture, thought a bit higher per capita income in all cases. Nothing that comes near the $45k figure for the U.S. as a whole.

I suppose Pittsburgh might be growing faster, but is it still much more like the rest of the Rust Belt that the parts of the country where the fix the bridge instead of fixing the netting that catches the cement chunks that drop from the bridge to the interstate.

Jim Russell said...

I'm comparing metro to metro. Last I read, Pittsburgh is above the national average in per capita income.

Primary metals and all of manufacturing continued to decline as a share of metro Pittsburgh’s employment earnings. But it didn’t consign the region to permanent low- prosperity status. By the 1990s Pittsburgh was at or above the national average in per capita income even though primary metals accounted for only 4 to 5 percent of employment earnings and 17 to 19 percent for all of manufacturing. In 2008 Pittsburgh returned to its previous peak compared to the nation—104 percent of the national average. Of the 55 metropolitan areas with populations of a million or more, it ranked 16th and was more prosperous than Dallas, Raleigh/Durham, Austin, Portland, and Atlanta.

C. Briem said...

As with all such questions, it really isn't a binary thing. Meta-reasons or not, there is a breaking point in terms of a "pittsburgh discount" that folks would not accept to work here. So the first question is how much is that and how does it compare to other places. Not an easy question to answer, but it can be done. and it will be different for different folks. Some folks out there probably want to be paid more to work in Pittsburgh. So let's forget them. You kind of have to ignore the outliers (the Pittsburgh-you-must-be-joking crowd, but also the Pittsburgh Uber Alles crowd)... On average is the wage premium.. or negative premium.. of working in Pittsburgh to much for the average East Coast MBA grad to accept.

That gets a bit Floridian to focus the question like that.. but be that as it may... the really really interesting question is why the premium is as big as we all think it is. Does it say something about our lack of openess to outsiders.. or does it say the supply of workers into those niches is strong enough to depress wages.

Maybe it would be more practical to discuss a more specific profession.. I've never quite figured out what MBA's do anyway. Might be interesting to hear how it all works for lawyers. :-)

Jim Russell said...

Does it say something about our lack of openess to outsiders.. or does it say the supply of workers into those niches is strong enough to depress wages.

I'm skeptical about "the lack of openness to outsiders" explanation. I wouldn't call either Cleveland or Cincinnati relatively tolerant. Also, the two stated scenarios are likely related. (i.e. one leads to the other)

Finally, who says Cleveland or Cincinnati is recruiting an outsider from Harvard?

Mike Madison said...

Finally, who says Cleveland or Cincinnati is recruiting an outsider from Harvard?

That would be my correspondent, whose message kicked off this post and thread. Whether HBS grads are going to Cincinnati or Cleveland is a different question, of course.

Might be interesting to hear how it all works for lawyers.

Indeed it would. The historical case is that big law firms in Pittsburgh offered a wage discount vis Philly firms (to pick a "bigger city" comparable), on the theory that the cost of living here is lower (for the lawyers) and the demand for highest priced legal services here is also lower (i.e, client won't pay as much for similar services). But the discount wasn't too great, because the labor market for these people is a national one, and larger firms in each city largely marched in lock-step with one another. If a market paid too little, and lawyers would decamp for the coasts. A few national firms used to pay their associates the same salaries regardless of their locations.

That overall structure was essentially identical in large city/regional city economies around the US. But the recession has hit law firms hard, and the result is less hiring overall and much more heterogeneity across cities and within cities than there used to be.

Jim Russell said...

Whether HBS grads are going to Cincinnati or Cleveland is a different question, of course.

I'm thinking along the lines that the HBS grads who do go to the mentioned Rust Belt cities are from those Rust Belt cities.

Mike Madison said...

It's an empirical question, of course, so I'm guessing. But my guess is that historically, companies like P&G were attractive enough that they could recruit non-Cincy natives to start their careers down there. Today (guessing again), that may be more difficult. Then again, some of our law students have taken first jobs in Cincinnati -- and not only are they not from Cincinnati; they aren't Ohio River Valley natives. Why Cincinnati? The legal market there seems to be a bit brighter than Pittsburgh's.

Jim Russell said...

I'm always looking for some established connection when thinking about a certain pathway of talent migration. Usually, the guess turns out to be correct:

C. Briem said...

I was going to mention P&G with regards to Cincinnati.. There is an argument out there that size matters in firm recruitment and you need larger firms to engage in that type of national recruiting.

I should extend my thought on how wages impact this. It is not just current conditions that impact this..but past conditions. Over the last couple decades at this part I think local employers have had such low need to hire coupled with weak labor market conditions that they didnt need to recruit nationally.. or they forgot how to. If you go back in time.. places like Westinghouse recruited plenty of people into Pittsburgh from elsewhere.. natioanally and internationally. When the big W imploded, the region lost one of the main employers drawing folks into the region. Other big larger firms in the region I suspect had gotten used to recruiting from local sources more so than comparable big firms elsewhere.

MH said...

I looked and I think maybe I was looking at the local figures for year 2000 and recent national figures. But, I still didn't see anything with the Pittsburgh MSA being above the national average, though it got close.

Jim Russell said...


The url I provided does show Pittsburgh above the national average. However, some (e.g. Harold Miller) have poked holes in the celebration of the per capita income number given the dearth of young dependents and substantial retirement income in the region.

So, Pittsburgh may look relatively rosy (and non-Rust Belt) for the wrong reasons.

Jim Russell said...


I forgot about the PTC sending out Justin Driscoll to a number of universities in order to recruit "outsider" talent:

During the month of September I was on 12 different flights visiting 10 different college and universities. At these events we came across some great talent from universities like Georgia Tech, Duke, MIT, Penn State, and many more which are looking for internships or full time jobs. Many of these students were not aware of the technology opportunities that are available in the Pittsburgh region.

MH said...


I'm not sure I buy that report's figure for US per capital GDP (which is, if I got the right figure, $40,166). We have roughly a $14 trillion dollar economy and a 300 million people. That's not exact, of course, but it does roughly match with the $46k figure I am used to seeing.

MH said...

The difference could be an adjustment for portions of national income that can't easily be regionalized or something.

Jim Russell said...

A comment over at Null Space once posted the following:

According to a custom chart I generated at the BEA, we also caught up with the average per capita personal income for the U.S. Metropolitan Portion in 2008, closing a gap that had persisted since the very early 1980s. And in 2009 we moved out well ahead.

I see significant disparity with what Michigan Futures is reporting, but both have Pittsburgh above the national average in 2008.

The Wall Street Journal recently reported PCI data for 2008 and 2009.

US Metro Avg. 2008: $41,930
US Metro Avg. 2009: $40,757

Pittsburgh Metro 2008: $42,104
Pittsburgh Metro 2009: $42,216

There are enough independent references to satisfy me. Furthermore, it matches up with the educational attainment data. I'm confident that Pittsburgh is above the national average for per capital income.