Pittsburgh Shows How the Rust Belt Can Be Polished Up
Host of G-20 Summit Has Evolved

By Alexi Mostrous
Washington Post Staff Writer
Thursday, September 24, 2009

PITTSBURGH -- When President Obama announced that this Rust Belt city would host a meeting of ministers from the world's leading economies, many scoffed. "A lot of people are asking something along the lines of 'What, was downtown Baltimore booked?' " wrote the Atlantic's Derek Thompson.

But Pittsburgh has shaken off its smoky image, transformed by an industrial collapse that drove out half of the city's population in the early 1980s. As the Group of 20 gathers Thursday, members are more likely to ask what Pittsburgh can teach them than why they had to come here.

The city's unemployment rate is well below the national average. Wages and housing prices are stable or up. Nearby Cleveland has experienced rampant foreclosures, but here they are relatively uncommon.

The city's main industries -- health care and education -- are thriving. The University of Pittsburgh Medical Center, an $8 billion health-care company, employs 50,000 people in western Pennsylvania. Pittsburgh's health services business has almost tripled in size since 1979, creating more than 100,000 jobs.

It is quite a turnaround for a city that lost 120,000 jobs between 1981 and 1984, after its steel industry collapsed. Thousands of young residents fled the city to find work, and unemployment reached 17 percent among those who remained. Much as with Detroit today, many wondered whether Pittsburgh could continue to exist.

"But here we are, still a major center and doing well," said Christopher Briem, an urban studies expert at the University of Pittsburgh. "The lesson is that there's life after your defining industry dies."

Diversification has been difficult, but Pittsburgh's economy is now healthier than that of many communities flattened by recession. "Pittsburgh does show that you can't rely on one industry. You have to retrain workers and inject money into new industries through a variety of means," Briem said.

A retraining program in the 1990s steered many workers into service industries. Public-private partnerships injected millions in state money into technology research. Now more than 100 billion-dollar companies have offices here.

Luis Von Ahn moved to Pittsburgh in 2000 after graduating from Duke. Now a computer science professor at Carnegie Mellon University, he developed a Web feature called reCAPTCHA, which he sold to Google last week for an undisclosed but substantial amount.

"The fact Google has a presence in Pittsburgh definitely affected my decision to sell to them," he said. "I guess I feel like it's my home now."

In his nine years here, Von Ahn, 30, can appreciate Pittsburgh's physical changes. The waterfront area, once a dumping ground for industrial byproducts, has been given over to parks. Along the Allegheny River, factories that once made cork and steel, strollers and Heinz soup now house upscale apartments.

Even the building where the G-20 meetings are being held is the world's first convention center to be certified "green" by the U.S. Green Building Council.

"When I came here, there were three coffee shops in the whole place," he said. "Now the rivers are cleaner and the restaurants are better. Many of my students, who used to leave for California or New York when they finished their PhDs, are choosing to stay."

Residents today are more likely to spot a Hollywood movie star than a functioning steel mill. Pittsburgh played a role in 12 feature films in 2008, partly the result of a change in the city's tax laws three years ago. A TV program called "Three Rivers," which will debut next month, is also set here.

"We're crazy busy," said Dawn Keezer, director of the Pittsburgh Film Office. "Russell Crowe is coming to shoot downtown in October. Tony Scott's directing a film starring Denzel Washington. Jake Gyllenhaal's in town."

In the past, Pittsburgh doubled for other cities, but no longer, Keezer said. "We've been New York, Paris, and Washington, D.C.," she said. "But now people are setting their films in Pittsburgh. And every time you see an image of the new Pittsburgh, it helps dispel the smoky, old version."

Like other burgeoning industries here, Pittsburgh's film industry is bolstered by an emphasis on education. In 2001, Carnegie Mellon introduced a popular program focusing on entertainment technology. Point Park University downtown began offering a film studies course, swiftly followed by Alleghany County's community college.

Along with two world-class universities -- Carnegie Mellon and the University of Pittsburgh -- the city boasts three major-league sports teams, a top-rated symphony and a host of theaters. Six-bedroom houses can be bought for $500,000. The city currently has a budget surplus.

For all that, Pittsburgh still faces some major problems. The city's infrastructure has suffered from decades of underinvestment. Abandoned houses line the streets of some neighborhoods. Notwithstanding those high-priced apartments along the river, poverty abounds: Many children in city schools qualify for free or reduced-price lunches.

The population of 310,000 remains less than half what it was before the steel industry faltered, and as Briem notes, it's an aged population: "We're the only major metropolitan area with more deaths than births each year,"

Those demographics have Pittsburgh struggling to fill positions in fast-expanding industries, said Bill Flanagan, head of the Allegheny Conference, an economic development group.

"We still don't have enough restaurants or bars to attract young people," he said. "We've got 30,500 open jobs and we can't fill them."

Flanagan hopes the "boomerang effect" -- where the children of families who left Pittsburgh decades ago come back -- will bolster the workforce.

Carl Kurlander, a screenwriter who grew up in Pittsburgh but moved to Los Angeles in 1982, returned with his wife in 2001 to teach screenwriting at the University of Pittsburgh. "We were going to take a year off -- a Hollywood sabbatical -- and then come back," he said. "But then a weird thing happened. We were happy."

Kurlander has just completed a film about Pittsburgh called "My Tale of Two Cities." "It suddenly felt like I had a life," he said. "Pittsburgh can be slow to change, but it's a great place."

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