Tuesday, August 14, 2012

Is Downtown dying?

Got your attention?

Relax.

So there are times when you really need to understand your data before jumping to conclusions. Generally speaking a lot of us are loathe to ever use data reported by zip code. Zip code areas are a bit arbitrary and don't really align to anything else. Data collected by zip code has some issues you really have to think about before overinterpreting. Still, you wind up being forced to look at some data by zip code because there sometimes is just no other data available on small geographic areas.

Which is all a disclaimer before looking at the latest data out from the Census Bureau's Zip Code Business patterns program. One perpetual question here is what is happening Downtown? The Zip Code data is for jobs by place of work, but that is what you want to look at Downtown.   Most often when you see employment data reported in the news it is a count by place of residence. For places like Downtown, the difference between a count of jobs by place of residence and jobs by place of work are completely different numbers. Soooo....When I add together the job counts for zip codes 15222 and 15219 (the main Zip Codes covering Downtown and some environs into the Hill District and the Strip District) over the last decade the trend looks like this.


Here is the thing. I don't believe there is any real trend obvious in that data. If you have ever looked at what the raw data looks like you will notice some important things. If you go back a decade or so you will have seen there were a lot of establishments being reported as located Downtown that likely were not really located there. My take is a lot of smaller businesses were winding up being reported in the location of their main branches or even for their accountants on occassion. I believe the data gnomes at the state have worked hard over the last decade to clean up that particular data issue and you see the results early in the last decade. So what appears as a decline in jobs roughly a decade ago is really data cleaining IMHO. Then there has been a general cleaning resulting from establishment reclassifications. If you are not careful a HQ location can have more employment attributed to it than is really ground truth. That has been cleaned up as well. So I think that a number between 90K and 95K has been the consistent number of jobs located in Downtown between the rivers for quite some time even if it appeared higher 10-15 years ago.

If there has been any decline in jobs it likely is mostly attributable to retail sector jobs. One decline in Downtown employment has likely been in retail since there are now significantly fewer large department stores than in the past. The large department stores were significant concentrations of jobs. These job counts mostly will not differentiate between part-time and full-time, or high pay or low paying jobs. Department stores being big concentrations of part time work means they really can add a significant number of jobs.

So yes there are big things going on Downtown as there are in all dynamic places. Some jobs have moved out of the "Golden Triangle" proper yet remained close. Alcoa's jobs moved over the river. Ongoing dispersal from the old Regional Economic Tower will have an impact. Not that long ago the legacy of Kaufmann's kept a decent sized back office staff Downtown. All while the banks have all had big expansions Downtown. I think there are more lawyers Downtown than ever and all sorts of other things churning. In jobs or migration, churn isn't bad. Anyway.

If anyone really thinks jobs located Downtown have shrunk much over the decade... what are parking rates these days? More importantly, has anyone pegged the over/under for what percentage Downtown parking rates will go up as bus routes keep getting cut. I have been thinking about this some. A lot of commuters Downtown will find alternative ways to get to work... but there will not be any real escape for those who pay for parking.

So what do the jobs downtown pay. The same ZBP data also has good data on payrolls. So here is the total payroll at the two Downtown zips going back a few years. So even with a big decline in job counts, the total payroll has generally been pushing up at a rate above that of inflation.



So now put the two together and you get an average payroll $ per job.



This gets more interesting. So the average payroll Downtown peaked at over $66K per job Downtown in 2008.  Finance and law both took disproportionate hits in the recession and are likely the cause of the decline in subsequent years. Again that is just the average which includes the retail that still exists there. So the non-retail average is higher for sure. What was that about parking costs?

  Now.. the real question is how competitive Downtown is compared to other areas of the city/county/region. Clearly Downtown has higher paying jobs than most anywhere else, but is it likely to remain so in the future. So I computed the same average payroll per job for the county over the same years. The MSA average is unsurprisingly significantly lower than for Downtown... but here is where the rubber meets the road. How has the ratio of pay been trending. Here is what I get for the average payroll per job Downtown compared to the Pittsburgh MSA as a whole.. Generally a trend up and inthe future we will see if the downdraft between 2008 and 2010 has turned around.


So if anything... the concentration of higher paying jobs in the county, which itself has a disproportionate concentration of the higher paying jobs in the region, is trending up pretty clearly. So the next time you hear anyone even suggest that jobs are fleeing the city or Downtown.. or have ever fled the city in the past... ask to see their data they are basing that conclusion on...

Finally... for the history buffs or those who think all numbers in the past were higher.  On this question of how stable Downtown has employment has been... here is something from p7 of the Mass Transportation Study of Pittsburgh and Allegheny County, Part 2 that the ACCD commissioned in 1951.  Read and compare the reference there for the jobs count in the 'Golden Triangle'. You might need to click on the image to read the precise number.

1 Comments:

Anonymous BrianTH said...

And all that helps explain why these days you can rent out upscale apartments in Uptown.

Tuesday, August 14, 2012 9:01:00 PM  

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