Saturday, December 31, 2011

All my lawyers

Judge Wettick must be feeling a bit like Susan Lucci at this point.  In the news is his: Ruling of the day as covered in more detail in the PG.  Certain amount of entertainment in it.


Shades of the Ed Schoenenberger story from his brief tenure as the county's chief assessment officer. I really had begun to wonder if he really existed, so off-grid he has been, but it turns out Ed is still out there (though he still has a far less public online presence and schedule than everyone's friend BK). I mean really out there.  South Dakota no less.


I wonder... Has anyone ever gone and audited Ed's contract? $80K a year to rarely even be in town and he himself all but says his job was to not get stuff done. yet there is some surprise over the current machinations?  Our own denial is our biggest enemy.  Poor guy was not even effective at being a whistleblower, but there has to be some story there worthy of follow up.  Paul vO's story there was not followed up by anyone to the best of my knowledge.

Rumor has it there is a new controller just elected who might have some purview over how county funds have been expended.

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Friday, December 30, 2011

More Pittsburgh real estate trends

Lest we forget some of the bigger stories in all of this. The other day I played with the housing data  for the trends across metro areas since 1991.  I have renormalized the data to show changes over just the last 5 years.  Just fun with numbers, but this is what you get:


So we can quibble over what the Pittsburgh time series means in itself, but clearly some awful awful times in a lot of, if not most, other real estate markets over what is now a half of a decade. So we are not merely talking about a bad month, quarter or even year. Some markets out there are stabilizing, but not all are and most opining I see projects more pain elsewhere at least in the near term.

Anecdotal I know it is.. but if this is not a sign of something weird in local real estate markets I don't know what is.  It is almost done, but there is not one, but THREE  new townhomes being squeezed onto this triangle plot of land (below) in Lawrenceville that I thought for sure was undevelopable.It really is kind of remarkable. Henry George would be cheering.


(ED NOTE: I've taken down the google street view embed that was here becasue it was interacting strangely with the blog.  You can still get to the view I was referenencing here)

I honestly had imagined a drill of some kind going in on that site. A bit too small I know.  Just so Wiz does not feel forgotten: Look at those parcels. Lawrenceville was one of the first parts of the city where the Landmen started to buy up leasing rights for Marcellus shale production within the city of Pittsburgh. By all acounts they have given up for now on city development, but why they started with the densist part of the city is just a bit confusing.

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Groundhog Day Redux

Written a decade ago, net a month, this week:

Trib: Groundhog Day in the Assessment Office. Nuff said.

On occassion I have the crazy idea of writing up the history of property assessments in Allegheny County.  It really is an interesting story with an unquenchable motif that can only be described as how not to do things right.  Then in the next moment I always say to myself, why write something that at most a dozen people will ever care to read?  So no history from me, but if you want to read one seminal piece check out what was called the Jaffurs' report of 1976

I guess we may have made some progress.  That report observed that a large part of the property data then in use included WPA line drawings of properties.  The county was still working on incorporating the newfangled technology known as the Polaroid.

But their conclusions included this passage which might arguable be rewritten today verbatim (see the very last page in the scanned file):
In considering long range improvements to the Allegheny County assessment process a vital element is the development of a credible system wherein the property owner has access to information on how the assessor and/or the mechanical system arrived at the valuation.
That just about covers that...  but egads.  "mechanical system."??  I did once have a class on analog computing, but even that was in the context of electrical analog systems.  I have not seen a mechanical analog computer since I saw the vestiges of the fire control system built into the USS New Jersey.  No joke. Scary contraption.

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Thursday, December 29, 2011

"and all the folks agree that this is terrible"

We have not even begun and this is already out of hand.  Please will someone stand up and explain that your assessment increase has little to do with your expected tax increase.  No, not me.... like how many read here?  I mean maybe one pol, or our good friends in the media not waiting until the 10 paragraph to kind of get around to trying to explain that the rates might change somewhere in the process.   They will change, and they will change a lot. I do believe from what I know of the distribution of real estate values in the city at least that the majority of properties will see property taxes go down as a result.  It's just the way the math works out.

Some people are now upset even thought hey clearly are in a range of having their taxes go down.  So here is a verbatim pull from a story today:
Donna Query said she, too, will appeal the new assessment, which increased the value of her home along Chess Street in Mt. Washington by nearly 30 percent, from about $37,000 to $48,000."I don't know how they come up with these numbers," she said
So that assessment went up by 30%.  By all accounts city values went up on average much more than that.  This person is looking at a big tax cut even if the city and school district merely come close to complying with the law. I would think the immediate question for her would be what she thought of the expected tax cut she should be getting. Probably why I am not a journalist.

I hate to pick on just that one article, they are all much the same expecially in omnimedia world.  Irate taxpayer makes good copy I do realize, but hopefully not at the expense of the truth.  And who in the world thinks any municipality or school district could get away with a back door tax increase out of this.  The lawsuits would kill them if nothing else and eat up any potential revenue gain.  .

OK..  still you worry, are upset or just plain confused.  A primer on how this all works, direct from the Commonwealth of Pennsylvania and their Real Estate Assessment Process in Pennsylvania document. It has a good starting point on property taxes, assesments, anti-windfall statutes and assessment appeals.
Prior to 2004, the assessment laws31 contained provisions limiting the amount of real estate tax revenues that could be levied by a political subdivision32 in the year following a countywide reassessment or a change in the predetermined ratio. These provisions are commonly referred to as the “anti-windfall” provisions.
The laws required a political subdivision33 to reduce its millage rate so that the total amount of taxes levied on the properties in the year following a reassessment increased by no more than a specified percentage from the previous year.34

In 2004 and 2005, three bills were signed into law35 which changed the implementation of the anti-windfall procedures by political subdivisions. The assessment laws now require political subdivisions to follow a “two-step” process when increasing real property taxes by a percentage allowed by law following a countywide reassessment. The first step requires a political subdivision to establish a revenue-neutral millage rate.36 The second step is optional. By a separate vote, a political subdivision may institute a final tax rate that limits the total amount of taxes levied to no more than the maximum percentage increase permitted by the assessment laws.
In 2006, the Taxpayer Relief Act (Special Session Act 1)37 was enacted. Act 1 contains a new anti-windfall provision which applies school districts. Section 327 directs that after a countywide reassessment,38 a school district which, after July 1, 2006, for the first time levies its real estate taxes on that revised assessment or valuation must reduce its millage rate so that the total amount of taxes levied on the properties subsequent to the reassessment increases “less than or equal to the index for the preceding year.” Section 327 does not require the “two-step” process that exists in the current assessment laws. 
(Emphasis added)
This is all going to be painful.

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Tortoise or Hare? Pittsburgh Real Estate

I really do suspect one could blog/comment/opine daily on assessments in Allegheny County from now until...  some undefined date long in the future, but who wants to endure that?  So to connect a bit the assessment crescendo just beginning with the bigger picture, and for a good end of the year post...  just what is going on with Pittsburgh real estate?

Some benchmarking of data from the Federal Housing Finance Agency is below.  I should add a note that this is their Purchase Only index of housing prices among the 25 largest MSAs in the nation. This is an index normalized to the beginning of 1991, so the graph is showing relative changes, not actual dollar values in any sense. 

Pittsburgh is in fact the current median in that dataset which they label as the 25 largest MSAs, but includes some Metropolitan Divisions as well.  Nonetheless, if you bought real estate in Pittsburgh in 1990 it would on average have been a better investment than in half of the other regions.  I suspect some here will just refuse to believe that. 

It is all unctuous bafflegab I tell youÜber unctuous maybe.. or is it Über bafflegab?

and for the curious, the region tracing out the north face of the Eiger is Miami.

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Wednesday, December 28, 2011

Property Assessment Dawn: Termination Shock and beyond

Assessments have entered the heliosphere and the future is upon us.  By multiple accounts, new property assessments were mailed out to City of Pittsburgh residents. Most have actually arrived by now. The folks in Mt. Oliver are along for the ride.

Folks will be chomping on this for days/weeks or longer, but clearly there is an immense amount of confusion over what it means.  Realize that since Allegheny County did this last time, state law has made it much more difficult, not quite impossible, to have an asessment result in higher revenue collection by any level of government that uses property taxes.  In other words, tax rates will be adjusted for all municipalities, school districts, and for the county itself.  The only question is by how much.

By all accounts, property values in Allegheny County, and likely for the City of Pittsburgh, went up cumulatively by 50%.  So whether your taxes go up depends solely on whether your property went up in value by more than 50% or less than 50%.  The 50% is not the final number, just what the pols have thrown out there thus far.  There is some more specific # that will be calculated, but I bet it is pretty close to 50%, at least for residential properties in the city of Pittsburgh. 

So I have a hypothesis: In the city of Pittsburgh MORE residential properties will see their property taxes go DOWN than will see their property taxes go up.  

Discuss.

That statement of course depends on a new tax rate being set close to what is notional revenue neutral rate would be.  It is not saying half the properties in the city will be going down, but that more than half will see increases than by less than the city-wide average appreciation. 

For the statisticians out there, or those who remember that statistics class way back when, it is all a question of skew.  Lots of low value properties in the city likely saw less than average appreciation.. but the higher valued properties that likely saw appreciation I am just betting add up to some much bigger cumulative increased values.  Got that?   If I am right it works out that in sheer number of parcels, more will see tax decreases than will see tax increases.  Put another way, the slower appreciating values are on average lower valued to begin with and so you need more of them to balance the higher valued properties that I am guessing appreciated by greater %'s. 

If I am right..  it will be kind of interesting how the politics of this plays out.  All the public rhetoric seems to be telling the average property owner that they should expect taxes to go up.  What if that is the other way around?  That more properties will see taxes to down?   It is not saying there will not be some very angry people since there is going to be a distribution out there.. and a lot of people will be seeing assessment increases well in excess of the city average.  I am betting those folks are likely to make themselves heard pretty clearly, while the majority that will save money will either be confused on this point, or just not know their taxes are going down until well into the future.

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"A vast industrial miracle is coming to Pittsburgh"

I know the PG has a series all week on coal, but check out the Pittsburgh Press Page 1 above the fold  headline in 1947 which leads with "The biggest story in the History of Coal".

I am not quite sure that all worked out. 

And that was just the beginning.  Seems like much of the whole issue was devoted to the story of how coal and technology was going to save Pittsburgh.  One of the secondary stories still on the front page there starts literally with this line "A vast industrial miracle is coming to Pittsburgh".

Miracles are good.  In Pittsburgh all the better.  Beatification may have been a bit premature.

Another story with the headline "Way is paved for many new plants in area" in that issue leads with this sentence: "Many industries never dreamed of in Pittsburgh can spring up here as a result of turning western Pennsylvania soft coal into gas and liquid fuels".  Quite a statement since we tend to dream up a lot here.

Somewhere out there is some media coverage that mentions in passing that the promised commerical plant would not be built.
and on an inside page is a article "How the coal cracking process will work".  Amazing what goes around, comes around.

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Tuesday, December 27, 2011

In other words.. We already said NO

I have enough attorney friends to have given me the ability to translate some legal documents and make them understandable to the public.  This from the Pennsylvania Supreme Court today says in the vernacular: Stanton Wettick is our friend.  That would be a much clearer statement than the verbose order they issued which in its entirety says:
and now, this 27th day of December 2011, the Emergency application for Extraordinary Relief is DENIED (emphasis in original)
as a result the Trib headline says: Allegheny County drops reassessment notices into the mailbox

Now while that headline may in fact be the literal truth, I still wonder just a bit whether any franked piece of mail made it to the US Postal Service by the close of business today. We will find out Wednesday I suppose.

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Most Stable Region of Pittsburgh

So in the spirit of the end of year retrospectives we will be having all week this came to mind.  In October I pointed out that for the Pittsburgh region, it was the highest employment count for an October ever.  Same for November.  Following from that, I was thinking a bit about some analysis by the folks at the parent of the business times which showed Pittsburgh among a small set of regions that are at their decade high employment peaks

That analysis might be misread a bit.  It is not that Pittsburgh is among the top employment gainers over the decade.  We are one of a few regions currently hitting their decade high peaks.  Lots of regions have had more growth over the decade, but many have dropped a lot from those peaks in recent years. In lots of ways it is a reflection of the relative stability here, not a lot of job growth. 

So I made a graphic of the employment change for the 50 largest MSAs (currently, by employment) over the last decade.  So with November 2001 as a baseline, below is what those trends looks like; Pittsburgh is in red.  It works out, and I calculated this explicitly that Pittsburgh is in a sense the single  most stable employment time series among all 50 regions.  Stable as defined by the difference in this time series between the peak and trough over the decade.  The difference between the peak and trough for Pittsburgh works out to 6.67 across the decade, which works out to the lowest range for any of the 50 regions.

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Monday, December 26, 2011

Mile High Punditry

So with the maximum likelihood analysis pointing toward a playoff game against Denver, it is hard not to remember our good friend Bill Johnson who once parachuted in from Denver to cover the last playoff game we had against Denver in 2006. 

Bill looks to have survived the demise of the Rocky Mountain News for whom he came here for back then, but moved on to the Denver Post.  Of note he appears to have only recently resigned from the Denver Post as well.   

Bill was actually not a sports beat guy, but more of an all around pundit out in Denver.  Does this mean we need to send Brian O. off to Denver if this game happens? If we are the Paris of Appalachia, certainly Denver must be the...??...  Zurich of the Denver Basin?

and since his previous employer has dropped off the DNS master index, I can't reproduce a link.. but to be fair, Mr. Johnson had a follow up column after he got back that was pretty positive on his ever more notorious experience here.

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Random mashup

Random hits while things have been slow:

Analysis from Willow looks at aggregate real estate valuation across regional markets and Pittsburgh is one of a rare few regions where the value of real estate went up last year.   I realize everyone writes this off as just some "we didn't boom, so we didn't bust" meme, but that is last years explanation and this has all gone beyond reversion to the mean for Pittsburgh. 

PG is doing a series on coal, reflecting I suspect a realization that all things are not shale.  King Coal stories would legitimately go back a century or two for Pittsburgh.  But more recently there was a point when all things energy, and especially coal, here were written off as old news.  Thus they had been relegated to obscure indicators.

Speaking of real estate value going up...  ASSESSMENT TIME IS HERE*.  Stories will be fodder for everyone for months if not the year.  There will be neverending news cycles that start with: 1) Gosh, where did values go up? 2) Gee where did values go down? 3) How much will my taxes be going up? 4) The confusion of the appeals process?  5)The scale of appeals the county needs to deal with? 6) How did this all happen?  7) What is going on with assessments in other Pennsylvania counties? 8) What are those bums in Harrisburg doing about assessments? 9) Will my municipality/school district be resetting rates and when? and 10) The epilogue: when will we be doing this whole assessment thing again?

To not repeat on the most immediate of questions I had a post last year: So you want to calculate your new property tax bill?     


and h/t to Jim Russell for this neat little snippet.  Pittsburgh needs make welcome to the Bhutanese.  I like to think I know my geography, but I had to look that one up.  I am not so good on landlocked nations. I'd give some historical stats on the local Bhutanese population, but that isn't quite possible.  It looks like a Cleveburgh story though and the Cleveland Plain Dealer was on the story earlier this month.  Who knew?

* Can we really be so sure of this?  Could there be anything else that holds this up with Judge Wettick promised that the city values will go into the mail tomorrow. I'm sure all those letters are stuffed and franked and just waiting for the post office to open Tuesday morning to go out. I'd honestly be more surprised at this point if they actually do go out.  Who knows what could go wrong in the mailing of 150K letters give or take. Maybe the franking machine breaks and the repair person is on a long weekend holiday.

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Saturday, December 24, 2011

Santa-tracking - thanks to a Pittsburgher

With the obligatory news coverage of NORAD's Santa tracker upon us, I will just repeat last year's Christmas Eve post and point out that the Santa tracker owes its start to diasporan and Westminster grad Colonel Harry Shoup.   He gets the credit always, as in the ABC post just out, but his local connection is mostly lost to the ages.  Since he strarted it somewhat accidentially, NORADs service to the world has run almost smoothly every year, except for when the Google folks almost caused a diplomatic incident recently.
I will divulge the Secret Santa path for deliveries in the United States:


Which shows Santa is not really constrained by time or fuel efficiency.  What is really shows is just how much my programming skills have atrophied at this point.   If I ever in my career teach a class in computer science (unlikely) I think I will assign the traveling Santa problem to find the shortest noncrossing path that will hit every county in the country, which is all that map really does.  That algorithms book is still on the shelf though.  

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Friday, December 23, 2011

Pigskin mythos

Obligatory history for December 23, 1972 below. 

And all those cheering fans: masses of unemployed steelworkers cheering as their jobs were being "downsized" in America's great deindustrialization?   NOT.  It would be a decade before the Cliff Stoudt economy arrived in Pittsburgh. For 1972 average manufacturing employment was 286K in the Pittsburgh region.  In fact, from this moment through moment the Steelers won Superbowl XIV (January 20, 1980), the count of jobs in Manufacturing in Pittsburgh would go up. Just a bit, but still up. The average level of manufacturing employment in the region for 1979 was 288K.

Not the mythos you care about?  On the far more important debate a to whether the whole thing was 'legal' or not at the time... I personally always defer to the physicists.  Only they can can calculate how the oblate spheroid bounces. 

On a side note, and who knows what this means in long tail philosophy, but if you do search for "Cliff Stoudt" I seem to have quite the Google rank. 


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Cleveburgh Watch: A Tale of Two Banks

So to admit upfront, this is all parasitic on some neat reporting from Bloomberg out on the Analytic Journalism frontier.  They have acquired and made available to the public (which means they want us to use it right?) data as they describe "Once secret " from the Federal Reserve on its lending to major banks during during the peak of the financial crisis. I suspect the Fed would describe this all as merely 'confidential' data.

As they describe it in detail the data:

The data reflect lending from the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Commercial Paper Funding Facility, the Primary Dealer Credit Facility, the Term Auction Facility, the Term Securities Lending Facility, the discount window and single-tranche open market operations, or ST OMO.


Got that?  I have pulled the files for PNC and National City which now are one of course.  Some may recall there was a certain bit of angst up the Turnpike that for some reason National City was denied TARP funding that might have kept it around a bit longer.  The PNC takeover followed immediately on the heels of the government's denial of TARP dollars.  Some thought it a bit less than fair since along the way PNC used some of the same money to implement the takeover.

Well.. if there is any doubt over the flawed logic of a straight one on one comparison of the financial situation of the two banks at the time, here is what the Bloomberg data has for Fed lending to the two institutions as a percentage of their market capitalizations day by day.



Yes at one point near the end, Fed lending to National City well exceeded its market capitalization. PNC's lending looked to be in itinerant blocks of a billlion.  I am speculating completely when I wonder if that was $ pushed by the Fed as it wanted to shore up confidence in the system.. not really money desperately needed by PNC at the time. 

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Thursday, December 22, 2011

Some things take time

Let's declare it a no-rant zone until the new year.  So just with escalating buzz on the North Shore Connector (relatively) soon to open I thought this would be interesting.  The excerpt below is from "Transit: Report #3 of the Pittsburgh Plan" dated 1923.  You might need to expand it to read it, but if you do you will really see how long the vision of a subway to the North Shore has been out there.  That and for everyone who got mad at the cost of doing it under the river vs. with a new or extant bridge (not that the Coast Guard was going to make that anywhere near as easy as anyone wanted to believe mind you), you will see that even that debate goes back almost a century. 

Personally I suspect that no matter the history and circuitous path to get tot his point, the spur line over to the North Shore may wind up being one of the most used parts of the Port Authority system.  We will see. 

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Wednesday, December 21, 2011

Taxing Billboards and Authority Angst

What goes around, comes around in so many ways here. 

Headline Today:  Billboard tax pushed by city councilman.

The (Pittsburgh) Gazette Times: Signboard Ordinance is Framed. October 28, 1911

Speaking of ancient history.   Who knew the Stadium(less) Authority was not only not planning its own demise, but actually expanding its portfolio by subsidizing "T" rides on the North Shore connector. Funny thing tough.  I presume the obvious that the Stadium Authority has some vested interest to do this because it will increase the value of parking lots it still owns on the North Side.  So getting people to use that parking will take away from Downtown parking, the biggest supplier of which is yet another public authority, the Pittsburgh Parking Authority.  So it's quasi-competition in the quasi free market of dueling public authorities in support of the Port Authority.   Maybe we need just one big meta-authority to make sense of all the other authorities?  

I do wonder what the PPA thinks of that deal since it can only hit their bottom line downward.  That and does this really mean the Stadium Authority is planning to exist in perpetuity?  Looks like it is working to self-justify a continuing stadium-less existence.  Can we at least rename it to something a bit less anachonistic?  It could be renamed the Authority formerly known as the Stadium Authority Authority.  Remarkably, that would probably be less confusing to the public.

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Tuesday, December 20, 2011

Creeping employment statistics

For what it is worth: highest wage and salary employment in the Pittsburgh region for a November ever.  3rd highest employment count for any month of the year ever.

as an addendum, it might be worth noting that if you look at the same data and do the division, manufacturing employment is now 7.63% of the total nonfarm wage and salary employment in the Pittsburgh region; a new all time low.

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Monday, December 19, 2011

Confusion greatest before the conclusion

There is going to be fascinating to watch.  There is a new litigant a week popping up in Judge Wettick's courtroom as he tries to prod the county to the event horizon otherwise known as property assessments.

Now it seems that the Allegheny County Board of Assessments, Appeal and Review wants to itself file motions in the case in its own right and standing.  My scan of their filing is basically is that they object to several aspects of the roadmap the Judge has laid out for how this will all play out imminently. 

Seems a bit late doesn't it? Nothing quite new in the case for them to be popping up and filing now sure seems to me to be timed to muck up the conclusion as much as possible.  And what I would think some lawyers might take up in argument, but isn't the Board of Assessment, Appeals and Review itself an extension of Allegheny County itself?  To file independently an artifice more than anything else?  The county is proscribed in how much it can really object at this point since legally they accepted the Judge's perogative to order an assessment quite some time ago.  Now if someone else objects...

My take is that this isn't over yet and the county has ever more strategem's to dig out and throw into the gears with the intention of preventing the actual implementation of new assessment values.  You have to give them credit for creativity and perseverance to this point.  That and with the incumbent moving on, would it be unsurprising to see a lot of the key actors in the play quitting their county jobs and moving on when DO leaves office.  Just speculating, but I anticipate the unanticipated over the next week. 

Next year is likely to see greater level of tragicomic machinations in the case.  I kind of expected the County Executive elect to back off his campaign pledges to go to jail before sending out new and different property assessment values, but that sure seems to not be the case as of this week.  The Venn diagram of the intentions of Judge Wettick and Rich Fitzgerald have no intersection as best I can tell.  How does it go when the immovable object meets the irresistable force? 

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Sunday, December 18, 2011

Can we at least agree on an order of magnitude?

Well, in Ohio there is certainly more debate over the economic impact of shale gas development. No, that isn't right, there is debate here, but I can't say I've seen a headline this blunt in Pennsylvania.

See the Cleveland Plain Dealer over the weekend: Shale gas will not create 200,000 Ohio jobs by 2015, Ohio State University says of industry.  Not only that, but here is what it says about the jobs created in Pennsylvania:
"We estimate that Pennsylvania gained about 20,000 direct, indirect and induced jobs in the natural gas industry between 2004-2010, which is a far cry fewer than the over 100,000 jobs reported in industry-funded studies (and the 200,000 expected in Ohio by 2015),"  
Hmm...  I guess if I had to start to judge which numbers are closer to reality, I would first look at what backgrounds the various authors have in regional economics and employment research. 

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Saturday, December 17, 2011

Messages in the sky

Just reading the Trib's story today: Pittsburgh International Airport eyes Ohio market with ad blitz

It just gets me pondering the airport's recent history.  A decade ago USAirways' economic impact on the Pittsburgh region was arguably at apogee.  It was at or near peak employment here, in number of flights and just sheer Schlitz. There was angst, but also potential, over the potential merger of USAirways with United, a deal that would be disallowed.  The high level of angst probably lead to the brief groupthink that allowed even a moment of credulity to the Mystery buyer of USAirways that would be shown to be a hoax. Remember when one Emil Bernard was supposedly planning an $8bil offer to buy USAirways in the fall of 2001 despite having no known assets other than a house in NJ. I know leveraged buyouts were once all the rage, but that would have been a greater leverage ratio than even LTCM. 

How long is a decade?  Today the wikipedia entry for USAirways starts out with the description the company as a Tempe, AZ based firm.  Like.. ouch.  If you read through it in more detail you really have a hard time finding much of the Pittsburgh history that we all associate with the name "USAirways".  There is but a brief wiki entry for Allegheny Airlines that barely fills in the gaps.

What's it mean?  We have parsed that by some measures the October 2011 employment in the region was an all time high for an October ever.  The all time all time employment high in the region by the same data was actually June of 2001, not coincidentially contemporaneous with that peak USAirways employment.  So to consider the region's growth trend over the next decade, or lack of growth more honestly, you have to look at it in context to the freefall of what was at a point in time the region's largest private sector employer.  We could parse the "largest" or "private sector" in that statement some other time, it was clearly a large local employer that would shed a lot of jobs quickly.

Beyond the direct impact of the USAirways jobs here, did it matter?  It was a few years later in 2004 I tried to make the point that the economic research does not bear any clear connection between airline service and regional competitiveness.  Economists study literally everything somewhere, but you will be hard pressed to find someone who finds causality between expanded air connectivity and future growth.  It falls into that category of so often repeated things it takes on self-referential type of credibility.  There is correlation between air service and growth, for sure, but can you really not say that causality the other way around? i.e that growth increases service and not vice versa.  Which way it works makes a big difference for policy of course.  For Pittsburgh you have have to ask if we are typical or counterexample since clearly recent employment growth and population gains have correlated pretty strongly with ever decreasing airline service, certainly less connectivity that there was a decade ago.

So rereading the that 2004 PG article got me thinking of what is up with former PG biz writer Dan F. who's local stuff was always insightful and who left for the WSJ's Atlanta office.  Looks like he is now in New York City still working for the WSJ.  I suspect for a biz/finance writer, I would think covering Wall Street for the Wall Street Journal is a big step up.

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Friday, December 16, 2011

Searching for Godot

So the PG is highlighting that it tops some metric Google is putting out of top 10 searches by region. Post-Gazette.com tops Google searches for Western Pa.

The Google list there is curious. So I get that a newspaper would top the list, font of information it ought to be.  But at number 8, and not all that far behind is "Duquesne Light".  Do people have such troubles paying their electric bill, or otherwise having problems with their service?  I clearly am missing something. 

But on a meta-news topic.  You would think on this topic at least, the PG's online coverage would embed at least one link to the source of the story in the first place.  Hypertext is a novel idea and all. So here is Googles Regional Zeitgeist 2011 for Pittsburgh fwiw. 

You notice also this must be the only online-anything list about anything in Pittsburgh that does not have a single 'Steelers' entry there anywhere.

and if you look at other regions, the modal to entry is typically a large local newspaper or news organization, it isn't always so.  Check out Washington, DC where the to entry by far is for the transit agency there WMATA. Weirder is that for DC the number 6 entry is for SEPTA, which comes up as Philly's transit agency. Has DC commuting extended that far?   No Port Authority on our search list of course.  The Yin to our Yang:  In Philadelphia SEPTA is by long measure the top seach there and the Philadelphia Inquirer only comes in at number 8.   

In Chicago, the CTA Bus tracker is coming in at number 2.  The CTA bus tracker is pretty cool and has real time, REAL TIME as in where is the bus right now, bus tracking information.  Not where the schedule says it ought to be.  Would be useful here eh?  I know we are lacking in programmers in town and all, but still. 

Number one in Chicago is METRA which comes up as something called commuter rail. Not quite sure what that even means? I'll have to ask Wikipedia what this thing called Pittsburgh Commuter Rail is.

.

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Thursday, December 15, 2011

Anecdote vs. Data

Let me make some introductions.  Data meet news, news meet data.

I just caught this headline.. but the Patriot News had article over the weekend: Marcellus Shale industry brings 'tsunami of jobs' to Pa.. which really was more of an anecdotal story focused on a woman getting a job in the drilling industry here in Pennsylvania.

Yet below is what the state's own data days about women working in Pennsylvania in these industries.  I've seen virtually no news that really looks into just how one sided this looks.  Given the coverage like above, you might think it was a tsunami of jobs for women.  Maybe someone wants to go the next step and work out similar gender breakdowns for new hiring in the same industries in say Texas and Oklahoma and see how Pennsylvania compares.

New Hires by Gender in Mining, Quarrying, Oil and Gas Extraction Industries

Pennsylvania, 1st Half of 2010

Source: LEHD, which is a collaboration of state labor agencies and BLS.

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The Day, strike that, the half century after

Pardon the moment of philosophy......

So I keep getting into a conversation that boils down to me disagreeing with some idea that today everything is as bad and as scary as it has ever been.  Like the world is ending. Ususally starts with some discussion on the economy, but becomes much broader. 

I honestly just don't get it.  I really don't.  Below was routine news content back in the days when all was so perfect. This wasn't in some beatnik version of the National Enquirer, but the Pittsburgh Press and written by he who would become it's editor the late John Troan, by all accounts an eminently sensible guy.  There was also this little war in a far off place called Korea at the same moment in time.  I can't even imagine how the work order off to the graphics department went?? "Please draw a landscape showing an atomic bomb over Brookline by noon".  Think the editor came back on the initial drafts with a "get a few more mushroom clouds in there".  All routine.

Go read it yourself if you wish.  Every single paragraph is astonishing.  Just in passing it points out "Those French bathing suits probably will go out of style" followed soon by "You can't encase yourself in a six foot suit of concrete and a foot thick steel helmet. That would kill you sooner than the atom bomb." Might be a bit of gallows humor in that, but I really don't think that was written tongue in cheek!  How is an entire generation not completely neurotic if these were daily concerns?


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Wednesday, December 14, 2011

Risk of depletion: the vacation from pension angst is over before it began

Yunz thought I forgot.  That or lost interest?  Boiler has been building up steam is all.  That and there seems to be quite a confluence of news in the nexus here: pensions, assessments, redistricting even migration. Damage Control teams being spread thin just trying to keep up. But let's poke in on pensions for a minute. 

Let's recap:  we all declared victory just a few months ago it seemed.  We 'solved this for the city' was one quote.


So last week we learn that the city pension funding is down to 54%,  Note that is 54% with the notional asset of pledged future parking revenues that is still hard to define and as council is learning even harder yet to extract from the Pittsburgh Parking Authority.  Let's just agree that it is not cash on hand in any form, nor fungible in any extant market.  I still want to know what the real cash horizon is for the pension fund.  You think others would care as well.


What really ups my distemper over the whole notional asset is how if confused the public.  Maybe the asset makes sense, maybe it doesn't.  But read the news coverage and tell me if you walk away with any appreciation for how much in $$ is really there to pay pension bills? No real appreciation that a large part (soon to be the majority) of all pension assets are no more than a promise from the city to itself to pay money in the future to the pension account.  It is a promise that I am pretty sure existed long before last December mind you.


So it is coincidence that Governing had a column last week on the public pension problems everywhere to a degree.  Will pension plans run out of money?  It talks of the "risk of depletion" for pension funds.  "depletion" isn't quite a euphemism, but sure sounds a lot tamer than the what it would mean if it were to come true.


So what does it all mean here?   Here is what we know as to the state of the city's collective pension fund. Forgive me for any errors in the decimal points, the city does not mail me the detailed pension accounting.

Total liability Jan 1, 2011                $1,012,027,241               
Funding as of Jan 1, 2011  said to be 62% which gives me   $627 mil
Funding as of Sept 30, 2011 said to be 54%  so $549 mil
Value of notional asset said to be valued at $239 million which gives a net value of $307 mil
That in itself would give you 30% funding ratio.  It has been worse.    Still,, after all the extra $$ piled in and all the other machinations, in reality we are in my calculation below the 32% we were just about two years ago. No thanks to some big losses due to massive market timing bets.  I really wonder if they have really gotten all the cash back into the market in a portfolio that make sense.  Something tugging at me makes me wonder what is up with the investment. Anyone know more?   

If this is how we define success, you have to wonder what failure looks like?  The only thing different today than a year ago is that an IOU was passed from one part of city government to another.  The truth is that IOU existed legally, morally, and in the accounting long before the latest accounting trick.  So what really is any different? 
It really is worse than that. Realize also that there was what by definition was a one time transfer of the cash that was sitting in the not so locked 'lock box' built up from past budget surpluses. So just before the end of the year.. or so everyone is agreeing to even if the banks were closed, was the transfer of $45 million I believe it was to the pension fund. When thinking about trends, you really have to think about that as the one-time opportunity it was. No such surplus will be there for a long time again.  If you were to net that out the city would most likely have been at ~$262 mil or less, or just under 26% funding ratio.
I won't pile on and say another year has gone by and while the rate of increase in the calculated total liability has slowed a bit, it would still seem an obvious projection that the total liability is higher as well which would push that % lower. That or that parts of the system are less well funded than these cumulative averages would imply.  But success.. keep saying it.. it all succeeded last year.

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Tuesday, December 13, 2011

Financial Times hearts Pittsburgh

Financial Times is all over Pittsburgh with an article and multimedia coverage of, for lack of a better term, the Pittsburgh Story.  The text is in: 'Steel City' Discovers a Softer Side.

FT is behind a paywall, if that link does not work, use the Google News trick and plug the title into the search engine and you should be able to read it.  It has an interesting play on past and present if you take the time to read it. 

Note they also have a multimedia treatment you will get to if you scoll to the bottom of that article.  Some picture, but also a new  video segment.  All quite positive.  We really do have friends over the pond. Remember past articles: "No longer 'hell with the lid off'", or "A Pattern Emerges" or even "Obama's exemplar: from depressed steel town to diversified economy".   and not to forget the full FT G-20 special, which may have been sponsored a bit if I recall correctly. Also the look at Lawrenceville: Diamond in the Rust.

But on the current article.. How much can I clip under fair use?  I just find this middle section rather fascinating on a lot of levels:
“Folks from Cleveland have come to Pittsburgh. People from Lexington, Kentucky, have come,’’ Mr Ravenstahl says. “They ask the same question: how did you do it? Well, this didn’t happen overnight. This was strategic and this took time.”
and then in a following paragraph:
Enter Tom Murphy, the son of a steelworker who ran for mayor in 1993 and promised to create jobs and end city centre blight. Union pickets turned out to jeer “Mr Technology’’ for ignoring the empty mills.

I suspect LR and TM have met more in print than in person at this point.

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Monday, December 12, 2011

Further fallout for us?

If you are not paying attention to the niche news about what is happening within the Nuclear Regulatory Commission (NRC), you probably should be.

There is a bit of mixing different geographies in this, but here is data I pull when I extract data by occupation across all regions in the US with measurable employment in two of the most specialized occuptions out there:  Nuclear Engineers and Nuclear Technicians.  Added together and ranked by absolute employment counts the graph below is what I get.  In sheer numbers these are not huge anywhere, but they are the core  and proxies for the far larger establishments that rely on these workers. So you see why any hiccup in the nuclear industry will have impacts here as much as anywere. 

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Midatlantic UFC - Pennsylvania-New Jersey migration flows

Just some more gratuitous wonking with the most recent IRS migration data.  Playing off some media and online buzz (granted some of that is a bit of an echo chamber) coming from the apparent net migration from New Jersey to Pennsylvania, below are two maps showing what the spatial patterns are for the population migration between the two states. 

The top map shows the county to county flows that have a net migration FROM a Pennsylvania county TO a New Jersey county.The bottom map shows the same for flows FROM New Jersey TO Pennsylvania.  So these maps isolate the inter-state migration flows between just the two states and are separated into two maps for the flows that are net into NJ or net into PA respectively. Note the flows are weighted in the width of the line symbols to the size of the net migration flow and the two maps are scaled the same for comparison.  So at least for the moment Killer Keystone is stomping on Golden Garden.

by request.. the full resolution PDF of image below is online here.


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Sunday, December 11, 2011

Net New Yunzers

So if you think it is hard to define a Yunzer, what in the world is a Net Yunzer?  Maybe a Yunzer working at Google?  Also, maybe a Yunzer is the same as a Yinzer, but I still say it is spelled with a 'u'!  Modernisms be damned.

Can I borrow content from myself?  I suppose.  Same as I had on the Pittsburgh Urban Blog, but here is a bit more parsing of the migration data you may have read about already.
Here is a comparison of two maps, each of which show only those metropolitan and micropolitan areas which are generating net migration into the Pittsburgh region.  So these are depicting only regions which have more people moving into Pittsburgh than are destinations of people moving from Pittsburgh. Note it is a different set of maps showing regions that attract more people from Pittsburgh than are sending people here. Got that? 

The top map is for the most recent period, migration between 2009 and 2010 generally.  The bottom map shows the same data for 5 years prior: migration between 2004 and 2005. Both are made to the same scale. What a difference 5 years makes.

And a coincidence I just realized...  2004 would also be the year when Ariba bought out Freemarkets fwiw.

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Saturday, December 10, 2011

Investing like it's 1999

The weekend includes an anniversary for what some thought was  Pittsburgh's great windfall,  Freemarkets 1999 IPO could come and for a brief golden moment was valued with a notional market capitalization of $8.42 billion dollars.  The intraday high would place the value more like $9.7 billion.   The firms last complete fiscal year reported $7.8 million in revenue and 234K in profit would nonetheless be worth more than a $billion more than the still combined hybrid of the entire USX corporation which I think had revenues that year of $30 billion.  Probably a bigger order of magnitude disparity between the two in employee counts at the time.

For sure some would make a fortune, but they would have had to sell pretty quickly.   When Ariba bought Freemarkets in 2004, the price paid would be the equivalent of $493 million, roughly 5% of it's peak market capitalization. Some early investors made out. In particular those folks at Goldman Sachs are not dumb. But if you bought stock on that IPO day or most any time soon thereafter I am not sure you could have avoided taking a bath.  If one did what common investing wisdom says to do and bought and held= not good.

It is not a bad story in a sense.  Lack of dot.com boom would mean less of the dot.com bust for Pittsburgh that soon followed in many regions. One of Freemarkets problems was that it came into this near the end of the dot.com frenzy.  So the IPO pop was bigger and the period before the burst was shorter.  This was all another era ago really.  So long ago that even as big a deal it was, it seems to me that Freemarkets does not have its own Wikipedia page today. Even the Pittsburgh Chair once had a Wikipedia entry :-). Still I once said that the dot.com bust could be Pittsburgh's boom.  You know..  it may have worked out.


So the irony to me in the whole Freemarkets story if you followed it at the time.  Despite its name, and its "B2B" focus at the time..the B being business..  the real buzz for Freemarkets was when earlier in 1999 it conducted a reverse auction of sorts and facilitated the purchased of just under a million pound load of road salt of all things for the Commonwealth of Pennsylvania.  That and some coal even (remember CoalHUB?!). Talk about old economy meeting new!  Pennsylvania state government and Freemarkets were way ahead of the curve in getting the public sector thinking about e-commerce and the Freemarkets IPO was in many ways a direct result of that apparent success.  So it was a public sector client spending public money that vaulted Freemarkets to initial fame and itinerant fortune.

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Friday, December 09, 2011

Water under the bridge

Since the PWSA is looking at a rate increase...

This would probably take a Public Finance 103 Class to ever sort out...  maybe even an entire dissertation... but I would love to see someone try and go and forensically look at thie 2008 bond deal the PWSA put out there and see if anyone could figure out how much of the $300+ million floated from that ever made it into actual infrastructure investment... as in something actually resembling pipe. It really needs to be written up as a case study somehow. It's way way to convoluted to get into again here, but it was pretty clear long ago problems would be hard to avoid.

But I am all for investment in core infrastucture, so as long as this rate increase does not wind up in Malaysia, I'm good.

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The Paris of Cleveburgh

OK. the game is over and we are Cleveburgh again.

So this is interesting in lots of ways.  The Cleveland Plain Dealer is just now reporting on developments at the Pittsburgh International Airport. See:  Pittsburgh airport says regional strategy and shale can propel air traffic.   So to begin, points for connecting shale to everything.  How many folks from Bradford are going to be filling seats to Paris I am a bit dubious of, but still.  With apologies to Brian O it gives another whole  meaning to the Paris of Appalachia meme. 

Why is the article really interesting?  It's funny when folks talk about promoting Cleveburgh you also see the head on competition for air traffic going on between folks here and folks in Pittsburgh.  Kind of anti-Cleveburgh thinking in all of that. But the amount of ink the Plain Dealer is spending on reporting on the Pittsburgh airport is a bit seminal fwiw.

and I really thought I was watching for local coverage of this pretty closely.. and it is possible I missed it.  Note that the PD article is giving a number for the amount of subsidy Delta got for year 2 of their Pittsburgh to Paris flight.  It says the 2nd year's subsidy was "less that (sic) $2 million", well down from the maximum $5 million for the first year of the flight.  We knew the $5 million number some time ago.   Did we really have to learn the (pseudo) $2 million number from the PD??  That would be fascinating. 

I will stand corrected if someone can find a public record of the 2nd year number.  I only note I did not see any data on this as of this July 2011 post.

and I'll add one other thing on the general airport strategy of building up a regional flight network.  Don't you think that reads verbatim as the business plan for Allegheny Airlines at some point in the past.  I was recently told there is an Allegheny Airlines Historical Society.  Maybe we have that actual plan out there somewhere?

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Thursday, December 08, 2011

Browns Insider

I find this rather odd if you watch it.  From Cleveland is this video segement for their Browns Insider:

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Wednesday, December 07, 2011

Nonflation Non-story

There is a PG story on a McKeesport councilperson upset that some cash in the city budget there was deposited in an account with a ZERO PERCENT INTEREST RATE.

The caps are just my channeling of the anger the local councilperson seems to be exhibiting if this has been raised to an actual news story. 

I really hate to say that this may rank as the non-story of the day.  I presume that any cash on hand in McKeesport is really a short term holding based on the timing of revenue and expenditure, not some long term investment they are investing with a multi-year horizon.   Anyone can look at the short term interest rates these days.   The one month t-bill is actually showing up as ZERO percent.

The 3 month interest rate is .01..  Not as in 1% but 0.01%, and for those who don't realize it those are annual rates.  So for the $14 mil in question, a 3 month CD of some sort would earn $1,400 annually.  Over 3 months we are talking $467.   Now let's talk about fees associated with all of this or maybe just the opportunity cost of the time spent debating this on their council. 

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Tuesday, December 06, 2011

Jersey Shore voting with their feet

It's going to be a migration story week.   Via the AP and the New Jersey Star Ledger is the story of the day.   It says that more and more residents of New Jersey are fleeing....   to Pennsylvania?

I thought we were a tax hell or something like that?  Everyone should be fleeing Pennsylvania I thought.  I know I read that somewhere???

Note that the New Jersey folks are probably not heading into the state for the shale gas jobs. Will have to look a bit more closely at this data myself to see if there is anything to be said about migration of shale workers into the state.

The parsing has only begun actually.  Pittsburgh (city, region or pick your county) has always ranked near the top in a metric of what percentage of householders have lived in their current place of residence the longest.  I will have to look at the data the folks are reporting on to see if that is still generally true or if we have budged out of the top spots.

and I have updated my regional migration report on the UCSUR publications page fwiw. 

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Monday, December 05, 2011

A Custard Too Varied

So do we storm the ramparts to bring him back, or give him an award for sheer endurance? Pittsblog: Eight Years is Enough.

To connect the epicurean and the existential, I will point out that Mike's Pittsblog blogging tenure lasted longer than the entire cupcake craze in town.   That has to count for something.

For the obligatory non-sequitur.. and ever more proof that truth is so much stranger than fiction.  The author/creator of Eight is Enough, Tom Braden, has one of the strangest bios in modern American history.  You just know that bio is only  half written. If only I could find a connection to Cyril in there somewhere.

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Still Mendoza Salary #s

Average salary of Pittsburgh Pirates rises to 27th.   $1.73 mil per player on average.  AP: MLB Avg Salary Up 2.7 Pct To $3.1M

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Appraising the 'Burgh

So various news on the economy and real estate out there.  The PG's Mark R. had a story yesterday on that place far far away: Las Vegas is Gound Zero for the America's Housing Collapse.  There is a telling quote in there that says it all in a way: "Homes never should have been appraised at this value....".  In the perfection of retrospection it is an obvious statement. 

There has been a major change in housing policy and law. Specifically the Dodd-Frank reforms have required compliance with strengthened Regulation Z (Truth in Lending) requirements put out by the Federal Reserve.  The results has been that that theregenerally must be a completely independent third party appraisal in real estate transactions. That often means an appraiser who is not as familiar with the hyper-local trends impacting real estate prices in a specific neighborhood.  That and general reaction of appraisers in a lot of places has been to flip from the overly optimistic valuations that were the norm before, to generally conservative appraisals now.  In lots of ways the new lower paradigm for appraised values has had a real impact on local real estate markets around the country

So it all is clearly a good thing given the excesses that it all is intended to prevent from happening again. Too much system-wide risk unaccounted for in the way things used to work.  But Pittsburgh may be impacted more than a lot of places by the change in appraisal norms. Given how low housing values have been here in the past, a straight up appraisal for a lot of our appreciating neighborhoods is really going to come in way too low compared to what current values are.  That or say you are looking at a home newly rehabbed by Eve Picker yet have an appriaser using as a comparable valuation a nearby parcel without any investment in it in decades.  The different values may be way too much to be encapsulated by a generic appraisal methodology even if those differences really reflect what are differences in market valuations.  There is a sort of reversion to the mean going on.


Given that the appraisal is a key to getting a mortgage this all becomes a real issue in local real estate markets.  How big a problem this is locally I can't quantify, but I'll bet this is becoming a big and bigger issue with folks trying to get legitimate mortgages for fair market value properties in certain neighborhoods.. say the South Side Flats or parts of Lawrenceville or other places.  That may be the real latent real estate story for the region these days... i.e. what has the appraisal reform meant since it was fully implemented only earlier this year.   Probably a bit more relevant to us at least than what happens in the distant land known as Las Vegas.

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Sunday, December 04, 2011

Hidden mandates not terribly hidden

Just in passing I note the PG article parsing possible defense industry cutbacks on Allegheny County.   The neuron it sparks is one of the ignored vestiges hidden in the City of Pittsburgh Code of Ordinances where in section 204 - Powers and Duty of the Mayor you can find this perpetually ignored mandate:

The mayor shall present an annual report on the tax monies paid per capita and the citizens of the City of Pittsburgh to the federal government that is allocated to military spending. The report shall include an analysis of the impact of the military budget on the City's economy in relation to jobs and social services. The mayor shall advertise this analysis in two prominent daily newspapers in the City
.
Yes, it was once complied with.

But the bigger point it always gets me wondering is whether it is possible for a bottoms up revision of Pittsburgh's Home Rule Charter and code? A Constitutional convention of a sort.  It there were student lawyers out there needing a project like this, could one calculate what percentage of the verbiage in the entire city code are really effective these days?

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Saturday, December 03, 2011

A Tale of Two Recessions

So I wind up often getting into an argument that boils down to me disagreeing with a common belief that the recent recession for Pittsburgh is a slighly milder, but still very similar experience to the recession of the early 1980's.  Nationally it was actually two recessions officially (January to July 1980 followed by the longer period July 1981 to November 1982), though I think most would agree that the two recessions really were one big recession for the Pittsburgh region.

So as the national news parses the good unemployment numbers yesterday, the nabob version focuses on the drop in the labor force participation the numbers seem to show.  It lead me to making the graph below.  I took the labor force trends in Pittsburgh and made a comparable index from a period early in the two recessions.   So from January 1982 and from January 2008 forward, the graph shows what happened to the national and Pittsburgh region labor forces over the subsequent 4 years.  The graph shows the change from those baseline months.  Lot's to parse from it, but just take a look:





The extreme differences for Pittsburgh in the two recession (1980s vs recently) go way beyond what that graph shows. That decline in labor force in Pittsburgh actually masks the decline in the male labor force a bit as women entered the workforce in record numbers to replace the men who were out of work. The drop in the labor force clearly correlate with the net migration that spiked from the region and the drop in population it caused. The folks who were leaving both the regional labor force and leaving the region period were predominantly younger workers who were the folks most capable of adapting and changing to new jobs in new industries.  Those who stayed were far more likely to be older workers who had been displaced from the occupations they had had for decades and for many would never find new employment.  Today we know that in recent years we have seen the first net migration into the Pittsburgh region in decades and changes in migration patterns almost entirely reflect changing migration patterns of young workers.   It is folks in their 20's who dominate migration flows with rates of migration dropping as folks get into their 30's, 40's and older.. until there is a bit of a spike in early retirement years. So if net migration for the Pittsburgh region flipped from net negative to net positive just a few years ago, it has to reflect changes in the flow of younger workers into the region. 

So, just as the incredibly high unemployment rates of Pittsburgh in the early 1980's persisted even though so many workers were leaving the region which would have taken a lot of potentially unemployed folks out of the regional labor force...  masking how bad the employment situation really was; today the regional unemployment rates are being impacted by more workers, or those seeking work, flowing into the region and potentially making local labor force metrics look worse than they appear otherwise.

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Friday, December 02, 2011

Manufactured Numbers

So I really wonder if I surveyed folks in town and asked them what percentage of jobs were still in manufacturing I wonder what the modal answer would be? 

The actual answer.. by one measure, is a speck under 7.7%.   Within a very insignificant significant digit of the lowest percentage since..  well, I can't quite say ever in the same sense of ever ever. Pre-columbian paleoeconomic employment taxonomies are not quite my field.  Lowest for an October though... Maybe ever is fair in that context though since I am pretty sure October was not a pre-Columbian concept.  Not all because of the loss of existing manufacturing jobs of course.  Remember October employment for the Pittsburgh region is at at all time high, so even stable employment counts in any one industry would be declining in percentage within the region.


The less flippant point is that there is a myth out there that the local manufacturing decline is all ancient history.  As trend the last 5 years have not been kind; the last decade has not been kind. There was a bit of stability in the mid to latter 1990's, but what that was masking was continuing decline in most of the legacy manufacturing sectors in the region while there was a decent chunk of new manufacturing jobs being created at the Sony Plant in Westmoreland County.  Take that one establishment out of the mix, and the trend has been mostly unabated.

How long has the trend been going on in some form?  Pittsburgh, the region, employed the largest percentange of the US manufacturing workforce in 1909.  So a bit more than a century ago.

Looking forward there are some announced hits coming that have not shown up in the data yet. You might have worried more when  you saw the headlines that Heinz is soon to be closing 5 plants, but that actually does not matter in this context since Heinz actually does not have any manufacturing plants in the MSA any longer.

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Thursday, December 01, 2011

ditto

Pittsburgh region's unemployment rate down another 4/10ths of a percent between September and October.  The another is the important piece since it was a 4/10ths of a percent decline between August and September.  Not a surprise here of course, but still it seems beyond what anyone can write off as less than good news.  The trend is not done yet given what I see in the CPS data, but we will see.  Gets to whether this is really news.  It really isn't.  Not much really changed over the last two months to justify 8/10ths of a percentage point drop.  I actually just don't think some or even most of the increase in the unemployment rate earlier in the year really reflected what was happening, so the data might be just catching up.

Allegheny County's unemployment rate ought to be noted as well.  Down a full half a percentage point to 6.3% for October.  Can it go lower?  Of course, but by an absolute measure close to 6% unemployment is actually just plain low.. not low compared to the nation.  The average unemployment rate in the Pittsburgh region over the last 40 years, which includes some good and some very bad times of course, is a tad over 6.6%. 

Let's update my graphic of the relative unemployment rate.  Not quite the absolute record, but still rare territory for the region. Important because relative measures like this are often strong indicators of regional migration patterns.  More data on that hopefully coming this month.  So hang on.

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