By John G. Craig Jr.
Sunday, March 22, 2009
PITTSBURGH -- The bottom was falling out of this city's economy in 1979, but you'd never have known it from the face we presented to the world. The Pirates were singing "We. Are. Famil-ee" and winning the World Series. Three months later, the Steelers beat the Rams in Pasadena to take a fourth Super Bowl. And what had been "The Steel Capital of the World" started calling itself the "City of Champions" instead.
Yet this was also the time of Big Steel's collapse. By 1988, the industry that had made Pittsburgh, battered by competition from new producers with better technology and better products, had shed 56,000 workers, or 61 percent of its workforce. This loss would reverberate through the economy, draining an equal number of other manufacturing jobs from the region. The resulting shock would drive thousands of young people away, straining an already aging population. And the effects of that exodus are still being felt.
So when I think about the lessons the Steel City's 30-year economic transformation may hold for Detroit, another town built on an industry beaten by competition and confronting bankruptcy, I have to say that the first and hardest lesson for the Motor City is this: Fundamental change will be much longer in coming than you can imagine. You'll survive. The automakers, bailed out or not, will shrink and adapt to a new future and a new reality. The city will remake itself in whatever ways it can. But there'll be no "getting over" your past, only moving beyond it.
Organizing and managing contraction is not an activity we Americans know much about. But you're stuck with the job, Detroit, and it will go better for you if you're clear-eyed about who you are and where you've come from.
When an industry evolves in the way that metals manufacturing did in northern Appalachia starting in the 1830s, it becomes a way of life that touches every aspect of public and private activity. Its influence can be undone only after decades, if ever. This is something that the residents of the Pittsburgh area have not adequately understood. We overlook obvious evidence of decline and abandonment that still lingers from our troubled time. We ignore disturbing data on poverty, health problems and environmental risk, much of it out of sight in small towns and more rural counties.
It's only human nature, of course, to try to leave bad news behind and look to better days ahead. Pittsburgh has organized itself to do this twice since 1979. The centerpiece of the first effort was called "Renaissance II" (the first Renaissance was a widely praised urban transformation that took place from the end of World War II through the 1960s). It was characterized by major public and private investment in infrastructure. In the 1980s, six high-rise office towers, including the seminal PPG glass complex designed by Phillip Johnson, transformed the skyline of the Golden Triangle. The city replaced trolleys with light rail, built a subway connecting downtown with the southern suburbs and reconstructed Grant Street, turning the principal business and government thoroughfare into an elegant boulevard. As a result, Rand McNally's first "Places Rated Almanac" dubbed Pittsburgh "America's Most Livable City" in 1985. That same year, the Post-Gazette produced a special section chronicling all the changes and declaring that the storm had been weathered and that we were now a "corporate headquarters city" on the move.
But meanwhile, a group of Lutheran ministers, political activists and laid-off steel workers were regularly protesting the plant closings and layoffs -- tossing skunk oil downtown, disrupting church services in high-end neighborhoods and putting dead fish in bank safety-deposit boxes. Four thousand steelworkers gathered outside the Hilton Hotel on the rainy noon of April 6, 1983, to make their point to President Ronald Reagan, who'd come to town to talk up his administration's response to foreign competition. A few were even so bold as to flash the dirty digit at the president, with predictable results: They got front-page attention in Pittsburgh and elsewhere, and newspapers like mine got grief from readers for promoting bad manners and disrespect for the presidency.
Did Pittsburgh really undergo a renaissance? As the '80s came to a close, an analysis by University of Pittsburgh economics professors Frank Giarratani and David Houston concluded that despite some positive signs, "it would be very optimistic to say that the region is on the road to recovery."
The city's second, still-ongoing period of transformation started in the mid-'90s. It has featured less hyperbole and a steady conversion to a high-end service economy with an emphasis on higher education and health care. One reason for the more moderate approach is that we've lost and continue to lose too many people. Pittsburgh is a victim of "natural population loss" (deaths outnumbering births) and the only major urban region in the nation to have experienced a small but consistent population decline for three decades, now going on four.
Moreover, for every new technology company coming in, we've suffered the loss of such major employers as Gulf Oil, Westinghouse, Koppers Inc. and Dravo Corp. It wasn't until 2001 that regional employment broke out of two decades of stagnation to reach a record 1.15 million jobs. But this change was short-lived as 9/11, the Bush-era recession and the US Airways bankruptcy -- which cost the region 12,000 jobs -- took their toll. Despite these realities, Pittsburgh today is a relatively balanced and steady place. Health and higher education are the largest employers, with 232,200 jobs as of January, but there are also more than 150,000 goods-producing jobs. As for steel, well, Chicago, Detroit and Cleveland now produce more of it than Pittsburgh does, but we still retain both basic and specialty steel plants, as well as 329 metals technology service firms providing steel production equipment, engineering services, parts and supplies and raw materials.
We've kept close track of these matters for the past three years as part of the Pittsburgh Regional Indicator Project, which identifies areas that need attention by comparing us with other regions.
One of those is Detroit. Data from the last 10 years clearly suggest that the Motor City's challenge is bigger than just making better cars. The city is dealing with long-term regional contraction. Since 2000, it has lost manufacturing jobs at a rate of 42 percent, nearly identical to Pittsburgh's 44 percent loss of a quarter-century ago. And it's starting to bleed population in the manner of Pittsburgh, though not as acutely yet. But if the automobile industry goes belly-up or even contracts significantly, all bets on that score are off.
Particularly challenging is the state of affairs in the urban core, where population stood at slightly more than 900,000 in 2006, down from a 1950 high of 1.6 million. There's a critical difference here between the two cities. Even though it has only a third of Detroit's population, Pittsburgh has more people working in it every day -- 298,429 to 241,627. It also has a 1 percent county sales tax that serves as a user fee for regional entertainment and cultural institutions. Thus it's able to offer area residents more urban amenities and job opportunities than Detroit.
For all its traumas, Pittsburgh retains an urban/suburban/rural coherence. That, coupled with striking architecture and a beautiful natural setting, goes a long way toward explaining why it consistently gets better press than it might deserve, and why, after you examine the region's economic, demographic, environmental, health and local government measures, you refrain from blurting out, "Why, they've been treading water for years!"
Which is, in any case, better than sinking.
John G. Craig Jr., president of Pittsburgh Regional Indicators, was editor of the Pittsburgh Post-Gazette from 1977 to 2003.