Monday, April 09, 2007

did you hear that the population is declining?

Did you catch the news that population in the Pittsburgh region is declining? No? You can read all about it here.. also here, here, here, here and then there is the editorializing here.

The media frenzy over the annual population estimates was a little worse this year than usual. I think it was more the impact seeing the devastating post-Katrina New Orleans numbers that prompted the media frenzy. It created a mythical analogy to Pittsburgh because we show up with the 2nd largest population decline. What perfect fodder for the uber-pessimism that we must teach in grade school. I am sure a large number of people think that we barely held our own against the greatest natural disaster (in the US that is) in recent memory. I personally think we need to give up on all regional marketing efforts and just hire an ambitious social psychologist to figure out why we fear the future so much.

but here are a few more thoughts on the numbers:

First off. Not that I think this really matters, but others often care about where Pittsburgh's population 'ranks' compared to other regions. Tony Norman spouts a myth on Friday I have head before to the effect that we will soon drop to the 50th ranked region in the country, possibly within a decade according to the column. I would give him the benefit of permissible editorial hyperbole, but I have had serious people ask serious questions based on that exact premise. It just isn't the case. Even with the population decline of recent years, we still rank #22 just as we did before. Amazing that. Even given the worst-case population trends possible, Pittsburgh will not drop that far in a ranking of MSAs in the next decade, or the next. In fact, consider the New Orleans example. The New Orleans MSA started out with only just over half the Pittsburgh population. It then lost an unprecedented 292K people and now comes in at exactly #50. So barring some Pittsburgh-centric outbreak of the plague, we will be ok and not be considered a backwater in our lifetimes. No matter what Tony says.

Pure wonkish inside baseball, but we may actually move up in rankings soon. Just to prove how meaningless such comparisons are: within a few years I am quite sure that the Pittsburgh MSA will be redefined to include Indiana County. While other MSA's could possibly grow as well, if nothing else happened, Pittsburgh+Indiana would move from #22 to #21 overnight. Does that really matter?

but here is the message that I swear I tried to explain to each and every reporter I talked to.. Yes population is declining. Between a third to a half of that decline is caused by natural population decline. That got across, but there is an important corollary to that. Because population is going down, there is an impact local job growth numbers. As a benchmark, 2/3rds of a regional economy exists to provide goods and services to the local population. For a bunch of reasons that have little to do with the current competitiveness of the region, population is going down. That means a palpable part of labor demand within the economy is going away. It is not a demographic trend caused by any inability of local industries to sell products and compete against firms across the nation. You need to interpret our employment growth numbers in that context. If you net out the job loss that has happened solely because of inexorable demographic adjustment, we compare a lot better to other regions in terms of job growth, income growth or any related measure. Does anyone ever notice that? no.

As for the future. Here is the thing. One way or another, the natural population decline can't continue forever and is already abating. As natural population abates, population loss will abate and again, the job destruction that goes along with it will also diminish. A lot of people in town like to straight line the past when predicting the future. As concisely as I can say it: the steel industry can't collapse again. Even the rapid destruction of jobs at USAirways did not cause immense ripple effects through the regional economy. You just can't say that the trend connecting 1980-1990-2000 has anything to do with the next 20 years.

We obsess over the lack of international immigrants here. It is very much the case that the only thing that really sets us apart from other regions is the flow of immigrants into the region. Maybe we ought to send some one-way bus tickets to the mayor of Hazleton to distribute. But here is the thing. If you understand the fine print of the numbers, the truth is that these annual estimates have a few well documented limitations. One is that the presumed pattern of international immigration is fixed by data that came out of the 2000 census. There is no year over year adjustment to that data at the MSA/regional level. So each year, different MSA's pretty much get allocated the same proportion of international immigrants. Even if we became a mecca for international immigration overnight, that trend would not show up in the numbers being reported annually until at least 2010. So guess what? Next year the numbers will look the same no matter what happens. When it comes to international immigration, there really is no new information being added each year, no matter what the media purports it to mean.

And for the 5 loyal readers who are still reading, I have one final point that I ought to have made the first. People often don't believe me when I point out that the employment trends in the region have not followed population trends. There are now more jobs in the regional economy than before the decline in the steel industry. There are many more jobs from he economy's nadir in the mid 1980's. How can that be given the population decline? The short answer is that women have entered the workforce where once they didn't work in Pittsburgh. Pittsburgh had long had a relatively low rate of female labor force participation compared to the rest of the country. The only way the regional economy has been able to expand employment without bringing in more people has been the entrance of women into the workforce. But the rate of female labor force participation locally has finally caught up to national trends. So even if the economy continues on its seemingly anemic path, there will be a far greater impact on migration trends than in the past.


Blogger Jonathan Potts said...

I guess you will have to count me among the five. Unless I make six.

Tuesday, April 10, 2007 8:57:00 AM  
Blogger Jonathan Potts said...

Is it also true that job growth has continued here despite population loss because the out-migration during the 1970s and 1980s took with it a lot of Baby Boomers? I seem to recall you telling me several years ago that Pittsburgh did not necessarily have a shortage of young people--it had a shortage of middle-aged people.

Tuesday, April 10, 2007 12:17:00 PM  
Anonymous Anonymous said...

It appears the hyperbolic Katrina comparisons that have put a unique twist on this year's population loss obsession have prompted the mayor to devise a program to keep every young Pittsburgher here. There's some choice quotes I'm sure you'll find entertaining... "it seems every year we bring all these bright college students in and they all end up moving on to some other city" yada yada yada... these people should read your blog or pay attention to your quotes that are buried in the monthly articles about our "hopeless" region.

Tuesday, April 10, 2007 2:50:00 PM  
Anonymous Anonymous said...

Let's create another commission to keep young people. Free cupcakes for anyone under 35!

Tuesday, April 10, 2007 5:10:00 PM  
Blogger C. Briem said...

Better yet... arm Border Guard Bob with a rapid fire non-lethal cupcake producing device.

Tuesday, April 10, 2007 5:22:00 PM  
Anonymous Anonymous said...

Slow decline just isn't very interesting, for neither the newspapers nor anyone wanting to change the situation. There isn't a future cataclysmic event to spur action - Pittsburgh's already happened.
But are there other issues? Is the region's fundamental economic underpinnings really that strong? And at what point does the region look so different from the rest of the country that it operates outside of the economic mainstream?

Thursday, April 12, 2007 11:48:00 AM  

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