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