Saturday, July 30, 2011

Got kids?

Judging from some email I have been getting and other online commenting I probably need to address an interesting point out there. Looks like Eve and Co. have a graphic of the changing age distribution of the city between 2000 and 2010 with the observation that the proportion of those in their 20’s is making up a bigger share of the city of Pittsburgh’s population.

First off, it is true that the number and proportion of 20 years olds residing in the city of Pittsburgh went up between 2000 and 2010. It was one of the things that jumped out from the data dump a few months ago. (see tht Trib link, or my post at the time). If you want to look at the broader picture of why the proportion of population is changing making those younger cohorts appear bigger you can go back to what I wrote a decade ago (we’re getting younger every year). Actually that is now over 11.5 years ago. But the city has seen a huge decline in its elderly population which just mathematically makes younger cohorts a bigger piece of the pie. Still there has been a absolute increase in the number of folks in their 20’s residing within the city proper and that is the point worth looking at.

So why the overall  increase and how big is it? You can slice the age cohorts a bunch of ways, but let’s go with the groups Citylab used and decade of 20-29 year olds. That age group increased from 60,349 city residents in 2000 to 72,860 in 2010 for an increase of 12,511.

The biggest thing to consder is some other work we have looking at the increasing college enrollment at local institutions… the time series I had there was that between 1996 and 2008 the enrollment at local colleges (region wide mind you) and you get an increase of just under 16K over that period. Parse it and it is about 10K at institutions located within the city proper. The bottom line is that the bump up in 20 year olds in the city of Pittsburgh is mostly if not entirely an increase in the current enrollment at local colleges and universities. Maybe we can parse the enrollment time series to match the 2000-2010 period a bit closer to the decennial cycle in the future, but I am betting the local enrollment increases continued apace or even increased between 2008 and 2010.

We could parse and say some college enrollment is not 20 year olds, but the vast bulk of it is, especially when you consider our large and mostly itinerant graduate student population.  Also the enrollment trends I pulled together were just those in 4 year institutions.  I bet there has been an increase in itinerant students in other professional education in town over that period which would be in addition to the +16K (regional) number. 

There is a bigger corollary out there as well. 20 year olds may be increasing, but long term population trends almost always depend on trends in households with children. So even with more college students adding to the city’s population, the overall city population declined over the last decade. If you look at the children residing in the city you get an overall decline in the population under 18 going down by a remarkable 25% between 2000 and 2010. Few places will ever see growth if you don’t grow, or at lease maintain, households with children and my colleagues Bob and Caesar have put together the definitive neighborhood maps on what is happening with kids in city neighborhoods. There are local neighborhoods with declines in their child populations well beyond the city-wide 25% decline. That is inevitably the biggest driver of future population in most local neighborhoods and municipalities.


Friday, July 29, 2011

Life after default

No... I don't do macro. More micro defaults:

The city of Vallejo California is exiting out of chapter 9 bankruptcy soon, all while Jefferson County, Alabama plays hardball with its bondholders in it's bankruptcy.

As I pointed out in the past, by comparable metrics of debt per household, Pittsburgh is so far past where Vallejo was as it entered bankruptcy.. and that was before any of the latest developments were factored in.


Thursday, July 28, 2011

When good policy is defunded

Oh man, this is bad. I mean, really bad. Like one of the worst ideas to flow out of Harrisburg in a long long time.   For those who follow these things, it remains true that Pennsylvania has fared at least relatively well (or how about 'less bad') in the vast foreclosure crisis that hit most everywhere in the nation.  There is not any one explanation for why that is, but one big factor has been that Pennsylvania was remarkably ahead of the curve (how often does that happen?) in policies aimed at foreclosure prevention.  Why that is may all relate to our past economic calamities that forced us to deal with these types of things long before others.   

So one of the key programs that kept Pennsylvania stable was the state's longstanding HEMAP program, which I m just now seeing is being defunded and thus shutting down for the most part.  I am not sure anyone has ever done a cost benefit analsyis of any kind on the program, but this just has to be one of those programs that has a benefit far outweighing the costs. No matter what your political or philosophical bent it's hard to see how this makes sense.  In fact I think it had a sort of omni-political level of support.

It just ... like.... I'm speechless.  Bad. Bad. Bad.

h/t @capitol_ideas for pointing it out.  I have just been distracted or I should have caught this earlier. I see the Inky had some longer coverage earlier in the month.



Dark Matter

So I really said to myself: I really have nothing today.  Then I just scan the news and see this: Pittsburgh's fiscal overseer 'in the dark'

What Jeremy can get into in the few column inches he was given is just the tip of the iceberg.  How long has the ICA been around?  How much has its cumulative budget been? And in all that time, with a constantly rotating set of board members,  it has had one steadfast consistency in the form of its sole executive director from inception.  You would think that given the incessant financial imbroglios that are defining city politics of late, our Felix Rohatyn would be one of the most well known folks in town.. if not one of the most important.  Yet in all his tenure I do believe the only extensive interview of him has come from..  well.. he whom trouble seems to find.

My only quibble with Jeremy's piece is that in talking about the unimplemented TriData study of the city's Fire Bureau, it really deserves mention that there was even another uber-expensive previous study of the Fire Bureau commissioned by the ICA and then completely ignored by them and everyone else with no meaningful explanation in the public record. It's all just strange.


Wednesday, July 27, 2011

neither Maglev nor Southwest will get you to 30th Street anytime soon.

Local news snippets cover the news that Southwest is dropping its Pittsburgh to Philly flights.  It's a slightly bigger story in Philly where they seem to be losing more flights, and so their writeup is a bit longer.  They also dare write the ground(ed) truth:
Only US Airways, Philadelphia's dominant carrier, will fly to those cities. If history holds true, passengers can expect fares, now as low as $59 one-way to Pittsburgh, to creep higher.
It was not that long ago that airlines had Pittsburgh at the top of their list for express commuter shuttles to New York City.. and now we may have a hard, or at least expensive, time to get across the state.

Iconic a bit in that it comes on the day Maglev declares bankruptcy.. they say it's a temporary measure. I would bet they are correct since few organizations have the survival skills of the local Maglev folks. They have been at it a long time.   They even have continued as Transrapid, the company with the technology they intended to build here, has tried to itself go out of business. Like Maglev here, Transrapid limps along as best I can tell.

But back to the airlines.  Seriously, if the relatively minor Airtran-Southwest merger has all that bad news to dump on Pennsylvania... you just have to wonder what will happen whenever the next merger of USAirways happens.

AND.... it's even a bad day for blimps.


The Hmm Economy

Remember, the June news on jobs is relatively bleak for Pennsylvania, as it is for most other states, and even for the nation as a whole.  What is up locally?  Here is the net change in jobs between May and June in each of the last 21 years:

So if you look at the year over year change comparing successive Junes you get this:


Tuesday, July 26, 2011

Stamp no mo

Just my quick parsing of the list the Postal Service threw out there today on what postal offices they intend to close study closing.  Earlier in the year they had a short list of only 3 local closings, but looks like the list has expanded and the SW Pennsylvania ones are these:


On a side note... remember that the relatively new Postmaster General is a diasporan, and a Pitt econ major to boot.


Speaking of basis points....

... that is literally all the Sports and Exhibition is currently paying as interest on the bonds that paid for Consol Arena.  Check it out (you might need to click through the first screen you get), but this week their interest costs are 0.11%.  Note the decimal point is in the correct place. Basically it is money for (almost) nothing.

I still think both the state and the corporate owner of the Rivers Casino need to both ante up $7.5 million annually to pay for those bonds.  If only Don Barden could have negotiated that he only had to pay the interest on those bonds and not the fixed $7.5mil a year, his estate might be flush with a few more assets than they wound up with.

How do interest rates get that low? In part because it turns out the state of Pennsylvania is backing the bonds, even though I am pretty sure that was not quite clear to the market up front. They clearly think so now if you read the quotes from the article in that last link. (We make things a lot more complicated than they need to be.)  It all begs some interesting thoughts. Out in Philadelphia a growing municipal finance crisis was only averted when their Intergovernmental Cooperation Authority basically reflaoted a lot of Philadelphia debt with state backed debt at much lower rates than the city was able to get itself.  Our ICA I think is statutorily prevented from incurring any such debt which would be backed by the state.  So it is just a only thought experiment to consider that if the city were able to refloat it's debt at interest rates the SEA is getting these days, a lot of its problems would.. if not go away.. be much less problematic.  Even the pension issue would be a far smaller concern. 

I still don't quite get why they paid for bond insurance on that debt if the bonds were backed by the state, but who cares....


Monday, July 25, 2011

Basis Points

The city of Pittsburgh is refinancing some bonds. Blah, blah.  Fitch has rated the bonds that will hit the market today or tomorrow.   Given low interest rates, it is the type of thing they should at least be considering so no big deal in itself.  Still, Infy seems to be casting some aspersions on the deal, but is lacking specifics. I can't tell where he is heading with his comments. Maybe we can crowdsource this and figure what has has face down.  Here is the preliminary official statement for the new bonds.  At least in my quick look, I don't see anything too untoward, but the devil would be in the details. The whole issue of openess and transparency in municipal bond world is a big big deal these days and impending changes could portend a very different way of doing business. Would have a big impact locally as much as anywhere.

One thing I do see.. and it is not the biggest of shenanigans in context, but I take the public description is that this is entirely a refinancing and not a new debt issuance.  I guess that is mostly true, but there is a note (page 2, pdf page 8) that says they are using bond proceeds to pay the fall 2011 quarterly bond payments on a series of bonds.  That is effectively new debt to me, but hey, it's marginal enough to not be worth the argument.

So if anyone sees something I am not, I am sure they will let us know.  However, there is a fascinating section on the pension imbroglio in the verbiage of the POS. (no...  that means Preliminary Official Statement).  I was going to copy a few pages whole here, but you can read yourself.  On page 19 (page 25 per the pdf numbering) is a whole section titled 'municipal bankruptcy' that is fascinating for its existance in itself.  But it is on page 20 (page 26 of the pdf numbering) that the pension issue is discussed explicitly.  Every single sentence deserves parsing from political, financial, actuarial and legal angles, but I don't want to bore anyone.  They do seem to making a gratuitous point that the transfer of city reserves into the pension fund happened before the end of 2010, but let's not delve into the esoteric no matter how crucial it is to the big picture.

Elsewhere, all sorts of funny factoids in the ephemera.   Height doesn't matter: The US Steel building is now the 6th most valuable property in the city based on assessments and some assessment appeals I presume.  Not really talked about much, but the potential impacts of the pending county reassessments may be larger for the big building owners Downtown than most anyone else. 

On page A-10 (pdf page 50) is some demographic info I can't pass up.  There seems to have been a massive outbreak of Zombie-ism between 2009 and 2010. 

On Page A-7 is this verbatim "The County and Judge Wettick agreed to a reassessment schedule, to be complete by January 1, 2012, which is anticipated to provide a boost in future revenue".  One, do they read the newspaper coverage of changes in the reassessment progress and two, do they read the state laws on revenue neutrality??

Page A-13... 10K city residents work for Walmart? Really? I'm not disputing it, just news to me. Lots of Walmart employees in the region for sure, but just not many Walmarts in the city proper so I am fascinated by the reverse commuting angle. 


Unemployment Redux

If you missed it on Sunday, Trib looked at some of the issues with alternative measures of unemployment that is worth a read. 

If you are interested in local data on this, and apologies for the self-reference, but we compiled all the various alternative measures of underemployment for the Pittsburgh region a few months ago.


Sunday, July 24, 2011

Target Angle

The East End buzz here in Pittsburgh is mostly about the long awaited Target opening in East Liberty, otherwise known as the Eastside Annex. PG complements their coverage with a minor redux on the state of East Liberty redevelopment. Minor I say only because it is a tad shorter than the great 5 part series the PG did on East Liberty a decade ago. You really shouldn't read any current news on East Liberty redevelopment without reading through all 5 installments of that. 

How long has the new Target been in process.  It was 4 years ago I noted that local offices were finally being vacated for the demolition that had to come first, but it goes a lot longer back than that.  The target I say is really the final outcome of talks to put a K-Mart into the old AAA building, which for a time housed the city's police detectives.  Not a short story.

The talk is about how target is going to be selling food as well which confuses me a bit.  Does someone think they are ameliorating a food desert there at the corner of Penn and Highland?  We do have places in the city that could use a supermarket.  I have to admit the retail grocery business befuddles me because I can't make sense of all the investment that goes in and how much of it fails.  If anyone thinks there isn't food there, they might want to walk up a half block to the Shakespeare St. Giant Eagle which I suspect once had the largest footprint of any grocery store in the city.  Then there is the Trader Joe's another half block away... but also there was, people forget, a large Shop and Save was built right there at East Liberty Plaza also a half block away.  People forget despite it being brand new in 2005 because it only stayed open for a couple years months.  Lots of money invested in that for almost no return, probably a significant loss. I can't find any reference, but it's hard to believe that was not built with public money as well.  Then if one goes up Centre  you will quickly hit the new Whole Foods and then it is not far to another large Giant Eagle and until a few years ago yet another Giant Eagle at the corner of Center and Craig.  Add it up and over a fairly recent time period you are talking at least 6 large full scale supermarkets in a very short linear segment of town... 7 if you now count Target.  As I said, I get confused.

What Shop and Save people have asked me in the past since it really is forgotten. It really was large and brand spanking new yet DOA from a business standpoint.  It was where where once was a big mega Phar-Mor (retail pharmacy confuses me even more given their penchant for sequential bankruptcy), but is now the Staples which I really just don't get as a location decision unless they really are paying no rent at all as some sort of anchor premium. and that link reminds me. I mean, there were years there was no Staples Downtown even. It really isn't East Liberty Plaza, or East Liberty Station I guess, any more, but "Village of East Side".  Sigh.  The article also confirms the public money there, and note the obligatory job creation mention in the tag line.  Never has so much investment evaporated so quickly, but it existed.

I joked the other day that the new Target was clearly in East Liberty and not Eastside as it were.  Yet I see in the first linked article that not only is it Eastside II, but that Eastside III and IV are being planned.   I was going to leave the Eastside angst alone, but with that I will point out that if you go into the core of what actually what is East Liberty the retail looks awfully dead and deader to me of late. Even the minor retail that was there is mostly gone.  Lots of empty retain in all directions out from Penn and Highland.  The new spec building built right where the East Liberty tower was looks to be void of any of the first floor retail it was designed for.  and for sure all traces of what was to be the Hotel Indigo are gone despite the actual rent-paying residents of that section being forced to move for it some years ago.  If you are wondering where the hotel was going to go, it is right in what was called when itself a new development Friendship Square.

Does look like Chris Ivey has set up shop in what was once Bolans. So a guy doing documentaries on the lack of retail in East Liberty is now one of the core retail fronts left inside the square. Makes sense when you look at it from the right perspective. I say that the real test of of any redevelopment of East Liberty will be when anything at all opens up right at its core of Penn and Highland.  Bring back Woolworths!

Finally.  If you are into the history of East Liberty, which you must be if you voted with your eyeballs and read this far:  it is incidential to the story, but there is is a lot of neat history of East Liberty as retail bub in Hoerr's Harry, Tom, and Father Rice: Accusation and Betrayal in America's Cold War.  The reference always is that East Liberty was the state's 3rd biggest retail concentration.  While most likely qualitatively true, that is one of those things that some smart person quipped, but never came from anything quanitative... if someone has some evidence to the contrary, as in a specific cite of say largest retail concentrations in 1940 or 1950 I guess, I would love to know about it.

Bottom line..  there is indeed a lot of good news in the East Liberty story of late.  A bit of hype which always accompanies positive trends of course, or at least an overlooking of what has not done as well, but it should not be forgotten that the good parts of the story have only come with a lot of direct and indirect public investment continued over a very long time. Population in itself has continued declining in East Liberty is one big indicator that folks seem to overlook a lot.  The real success will be when there is a story on East Liberty that does not include 'redevelopment' in its theme and with that we have a way to go.


Saturday, July 23, 2011

Lumber Company Archives

From the Null Space archives actually, but seems appropriate these days: The Latent Ed Ott Fan Club.


Friday, July 22, 2011

Google celebrates the Pittsburgh Airport

Well... sort of.  It really is one of those only in Pittsburgh kind of stories.



The news statewide is that the jobs count dropped and the unemployment rate ticked up in June, just as it did for the US as a whole.

To be the optimistic contrarian, I'm going to go out on a limb here and say that when we learn the comparable data for the Pittsburgh region in a little more than a week or so the jobs count will be up and the unemployment rate will drop.   What can we bet on that?

I am working on a predictive model of short term labor force changes in the region.  I should show more guts and put a more specific number on that prediction, but it isn't quite ready yet.  Maybe soon. 


Thursday, July 21, 2011

The Ride Down Mount Parnassus

It's like the Groundhog Day of economic impact reports released again yesterday. I guess this will be an annual event.

I guess I really need get back to my Marcellus Shale experiment from last week. Last week I had put up a chart, deliberately unlabeled in part with some data on employment. The horizontal/time axis was unlabeled because I had intentionally put the most recent data on the left. The purpose was to free the interpreter from some preconceptions and then see what they thought. I had said the data was the time series of ‘new hires’ in the industry which is a metric that had been in the news of late, but the data I pulled was inadvertently the total employment numbers which I then scaled incorrectly because I thought it was quarterly flow data. So I pulled the chart down to avoid confusing those who read it. At least I gave the social media gnomes on retainer something to read all weekend long.
Alas. Redone properly, and without the temporal inversion this is the trend in total employment statewide in NAICS code 21 industries (Mining, Quarrying, Oil and Gas Extraction), which should capture the direct employment resulting from new Marcellus Shale related activity.
So the questions were how big a deal is this trend?  Through 2009 the industry had not even regained the levels of employment of its recent past.  Perspective on the scale is always essential and realize Pennsylvania total employment is roughly 5.9 million currently.   Even this chart is not all Marcellus related of course. In fact you can’t even say most of it is Marcellus related since there was obviously there was employment before the first Marcellus well went in. Generously the Marcellus numbers are coming from just the delta, or change, since 2007 give or take.  Even that I wonder about a bit since there is also this little industry related to coal mining that still exists in Pennsylvania and for those watching it, coal prices have been skyrocketing in recent years. It's part of the story in there as well. 
The data there only has full year data through 2009 thus far, but other data available for 2010 and into 2011 indicate the trend in employment is picking up. The current employment in this time series may be over 30K by now, so a gain of 10K over the last couple of years. 10K is a lot of jobs no doubt, but how big we can debate.  For a ballpark comparison it is probably on par with the net gain in jobs at UPMC alone over that time. 

The numbers you read about are often higher. Economic impact analysis the study of all the indirect and induced impacts new investment and economic activity can have. For sure Marcellus has those additional impacts, just as new investment in most any industry does. So the bigger numbers are not fiction, but their meaning is not always made clear.  The report today has an oft quoted, or will be oft-quoted number of 250 thousand jobs.  That isn't an estimated impact now, but a potential (this time more clearly labeled as 'potential') total impact including all indirect and induced impacts..  The future is where this all becomes an interesting question as to what is real what is hype, a question that is being debated in a lot of places

The 250K jobs projection is a really interesting number in a lot of untalked about ways.  Even with the lingering employment recession inflating the unemployment rolls, the total unemployment count in PA right now is on the order of 470K and that includes a lot of folks in parts of the state with no palpable Marcellus Shale impact to date such as Philadelphia. Half of that state unemployment count alone comes from the Philadelphia MSA, even more if you include the Philadelphia exurban environs and then you probably then need to exclude unemployment in urban Pittsburgh since those folks have no means to get out to the jobs being created for the most part. So if that projection comes close to being true, where will those folks be coming from?  That is one of the core questions in all of this. You would think there is a lot of permanent resident migration going on.. and unless they all get here at the last minute that flow must have started in earnest by now.  Maybe that is going on, I dunno for now.... but the 'man-camps' don't count as migration into the state for the most part.

Like everything else, it's all a lot more complicated than that, and a lot more complicated than others want to make it seem.  There was a good overview of some of the business dynamics in the nation's natural gas industry in Seeking Alpha just the other day. The biggest things people are really talking about is what is going to happen with the infrastructure for all of this, the pipelines and compressor stations that are going to be needed in ever larger numbers if. That and this issue of a refinery or 'cracker' to process the gas being produced here. Keep an eye on that.


Wednesday, July 20, 2011

Real estate stream of consciousness

So we start with the Trib: East Liberty Target counts on food shoppers.  Points for mentioning Mansmann's department store.  How come nobody ever mentions any of the Autenreith's that were all around town?

Which just makes me wonder... how many residential townhomes could you fit within the footprint of the Shakespeare St. Giant Eagle? or I suppose of the entire Shady Hill Plaza where it sits is the better question. Just idle, and hypothetical mind you, questions is all.

Speaking of real estate.  Nationally the news of late has been almost universally bad with mostly accelerating declines went it comes to the state of real estate markets. See just a few headlines:

MSNBC: The housing slump is far worse than you think-Key housing market statistics point to years of stagnation

BloombergBusinessWeek: The Housing Horror Show Is Worse Than You Think

WashPo: Shiller Says U.S. Housing Market `Stuck in the Doldrums'

Yet our news today is sublimely understated. PG: Home Values Rise in Region.  Do the division and the annual % increase is really quite remarkable in absolute terms, but in light of what is happening everywhere else is another thing altogether.  Given low inflation, the 'real' real estate appreciation here continues to be unprecedented in the region's history.   Some headlines still emphasize slow transaction flow: PBT:Pittsburgh region home sales down in June (and I am not sure what the 'average median home price' is quoted in that piece means), but again I am not sure transaction flow as a metric means as much as some think.  What if transaction flows are down because the demand out there can't find a local supply of real estate it is looking for? What would you expect to see?   Rising values maybe?  Then there is this big national issue that so many folks elsewhere are trapped in underwater mortgages that they can't sell and move on which is probably a big part of what is going on. 

To complete the trifecta the Trib headline is conflicted: Home sales dip, but average prices rise, but buried in it may be the true headline of it all in a quote from a local real estate professional saying "prices continue to appreciate despite fewer sales because there are fewer, low-priced foreclosed properties on the market". If true, that is the story.  I have not seen enough data to either concur or not, but in many ways I am the last to find out these things.


Tuesday, July 19, 2011

I will never again complain about the Mount Oliver doughnut hole

I could not resist making this image.  It was just incidental to a post by DNJ in her CityWalkabout blog where she wondered about the contrasting maps, and municipal histories, of the City of Pittsburgh and Columbus, Ohio.  Below is what the boundary of the City of Columbus looks like with the City of Pittsburgh and Allegheny County superimposed on it at scale.

I never really thought about it much, but Columbus must be the city with the least contiguousness in the entire nation.  It must fail one (or all) of those tests for compactness and dispersion. Talk about a tale of two cities when it comes to mergers and annexations that must have taken place, or in our case didn't take place.  The vast bulk of the City of Pittsburgh's territorial growth happened well in the past


Since before Sid meant The Kid

What is this mythical thing called a Pennant Race?  If Google couldn't explain it to me, I might not know.

Same graph below, but with last night's win the Pirates are now, and only now, ahead in the standings compared to any point this late in the season over the last 19 years.  The last time they were further ahead was the last season they went to the playoffs only to be kept from the World Series by..  well..  hey, he isn't a relation ok. Homophones not withstanding, I have closer family connections to Jim Leyland.

Anyway, the USAToday is already talking a Rust Belt series.


Monday, July 18, 2011

Express Trollies and Commuter Rail

Just more ephemera from the evacuation operation that is my office these days.  Anyone care to guess a year for this?  Note also the P&LE line still operating. 


Who needs lawyers

Not a blawg here and this is just something that got caught up in my news filters...  but can my legal beagle friends confirm this for me:  Is this opinion from the Third Circuit saying a local renter's handwritten appeal (terse as described in the opinion) was successful? In re: Chatman v City of Pittsburgh. Anyone want to go find it on pacer?

I have no idea the merits of the case, but someone needs a scholarship to law school.  I bet they now have a rare perfect record before the appeals court.


Friday, July 15, 2011

Does not compute!!

Pirates in first place is no longer an oxymoron.  Even Excel keeps telling me I have a calculation error when trying to update the graph:


A Marcellus Shale Experiment

So experiment is not quite the right word.   Let's call this a public exercise.  

A little while ago a kerfuffle erupted over some economic stats related to the job creation of Marcellus Shale related industries in Pennsylvania.   The state came out with a report that mentioned there were 72 thousand 'new hires' related to Marcellus activity.

Folks at the Keystone Research Center came out with a report that said wait a minute, the numbers don't quite add up that way .. 'new hires' is not the metric anyone uses for measuring job creation or economic impact.  At the very least you need to add in the routine job destruction to come up with the commonly used metric of net job creation. Otherwise you are just measuring the scale of churn in the labor market.

Then the Marcellus Shale Coalition responded with a press release that I guess has something to do with the topic at hand, though it's a bit hard to connect the dots. 

So what is the real answer? This may not deal with the techncial dispute over measurement of job creation, but still people need to think a lot harder than they have been about what the scale of economic impact has been of all this drilling going on across the state and causality more broadly.

So below is a graphic of annual 'new hires' in Pennsylvania, so state-wide data, in the industries sectors that should capture the direct impact of Marcellus Shale activity.  Yes, Marcellus like most other industires has indirect and induced effects as well... but it all starts with these direct jobs.

It is not a mistake; it is a bit Rawlsian and I have intentionally  left off the labels for the years on the horizontal axis.  Look at this picture and ponder 1) was there a qualitative change in trend, 2) if so, when does this chart suggest the new 'jolt' (as the state described it in the first link above) started up and 3) how big a change happened?  Was it big?  Really big?  Biggest thing ever? or maybe just some random noise? and 4) is any change in trend accelerating, decelerating or something else?

I'm going to leave that there for the moment.  I'm going to let that percolate for a few days and then come back with a slightly different graphic with some labels. I'd be cuious if anyone has any comments before then.  I'll back to it next week.


Thursday, July 14, 2011

Discounting the Singularity

If you want to read the one news article that you didn't see which covers the single most important development that will shape future of the City of Pittsburgh over the next couple of deades??  and as collateral damage a whole lot of other local public finance as well.   Then take a scan at least of this article in Bond Buyer:  GASB Unveils Pitch on Pensions.

Everything else is just kind of fluff in comparison. It is also why I am no longer going to get myself amped up over the rump debate of the parking controversy because it just does not matter.  State takes over pension system or not. Does not matter.  City finds some new revenue from the parking authority or not. Does not matter.  Take the city's current pension liability and instead of using an 8% discount rate, try recalculating using half that...  and then see what it gives you.  If you really push it to 3%, or say something close to what is used in private sector pension accounting and... 


Never has something so esoteric meant so much in the real world. 
Whatever..  just the most important thing that may shape all local public finance for decades.  Will be big news most everywhere, but we are the singularity.   Beyond anything to do with the City proper, there is another big local connection to all of this as well.


More Back to the Future

Interesting bit of competition going on in the news snippet that Giant Eagle beat out EQT with a new public natural gas fueling station in the region.  The story says it is the first.  

First in the modern era that is.  There were natural gas stations around town open to the public in the not too distant past.  I take they all went away over the last decade or so.  So.. how many non-fleet natural gas vehicles are there actually in the Pittsburgh region these days I wonder?  Anyone? The news story was constrained to quote how many natural gas Honda's there are in the entire US, no mention of the local number.  I knew one person who had a personal natural gas car in town once. 

There was some other news story I can't find about folks are pushing a cross-Pennsylvania network of natural gas fueling stations.  Out in Washington State they have a similar plan just announced for a network of electric charging stations for cars. 

Random neuron...   Ten years ago this week:  US average regular conventional gasoline cost $1.35 a gallon at retail. With those fuelperks gasoline probably felt like it was free, or would if it ever came back down to that. 


World Wide Welcome

Mine may be a singular indignation, or so it seems, but let’s go back to Allegheny County Council’s exercise in immigration policy last week. I already pointed out that the Pittsburgh region in comparison may be the place least impacted by immigrants in the entire nation. 

But what about comparing today with the past. We can argue over decimal points, but let’s say the region is 3% foreign born today, and most of that is comprised of folks who actually came here decades ago or who are students or young professionals that I speculate are not the intended focus of this new law. As I calculated it's 1% or so of the population foreign born and who arrived in the last decade and I suspect the bulk of those are students or related folks.  Take those out and the basis point that is left seems to be who is targeted by this new law.

What I don’t get is why is this an issue now? Put another way, what did they do in the past when there actually were real immigration flows into the region. 

So here is a page of data from the 1910 Census for Allegheny County.  What does it say? Basically it shows that of the county’s  1.02 million population at the time (which is not that much below what the population is today), literally 26.7% were foreign born. Ponder that a moment. 26.7%.  They also used to track what was called “foreign stock”, which you would be classified as if you were born here, but had a parent born elsewhere. This seems to have been intended to capture the children who might have just been born here but were in families of first generation immigrants.  Foreign stock made up another 33.7% of the population.   So at the time, folks observing their neighbors would count over 60% of them as foreign born or foreign stock. 
Basically at the time the  foreign born population was an order of magnitude or more greater than today.  When it comes to flows of new workers into the regional economy, my SWAG is that flows back then I bet are 20-30 or more times whatever the flow is today and I am being extremely conservative in that guess. 
Those numbers actually only reflect the foreign born white population.  There not being much consideration at the time for foreign born black population.  Asians had their own tabulation and the 1910 Census did count 333 Chinese, 32 Indian and 37 Japanese residents here. I guess all were presumed to be foreign born since there was no attempt to distinguish among native and foreign born Asians.   I really want to know what the story was with the 37 Japanese residents at the time, but I have no clue.  That is a history paper for someone.

You can dig further.  At the time if you look at the citizen status of the foreign born population in the county in 1910.. Just under 67K were classified as 'alien', while over 14K were considered 'unknown'.  Hmm, I wonder what paperwork they had?

Could it be that economic conditions are so much worse now to heighten concern over job displacement caused by so many immigrants here today?  There were many recessions, some nearly called depressions, in that period and I am pretty sure there were local workers impacted by the immigration flows that did not abate. Yet we survived. 

Gotta have a picture.  This was a graphic produced by the census at the time and is at least proof that maps pre-date GIS.  Here is a map of the county by county incidence of the foreign born, and foreign stock, populations in Pennsylvania by county.    


Wednesday, July 13, 2011

Custard* Collapse Disorder

There is a lot more to this great cupcake fiasco than meets the eye. Whatever happened to the Krispy Kreme's in town?!  Can Pittsburgh be that bad a market for Krispy Kreme donuts?  I think all the actual Krispy Kreme retail outlets in town are closed. It was probably bad karma since the first Krispy Kreme in the region opened up in Cranberry on Sept 11, 2001 I recall.  They were then said to be expanding in town, but then the corporate hit big potholes and I am not sure any are KK retail stores still open in town here are there?   I mean, what is our problem?  Even Erie has a Krispy Kreme! I feel like Dr. Strangelove with a TIF joke erupting..  Down, down.

I also don't think we have made it up to the 105 Dunkin Donuts outlets we were expecting.  There seemed to be room to grow in that I once did calculate the bakeries per capita metric. That is no joke, or at least the data that I used to generate it is real. I am not sure updated data is out yet that would allow me to update that chart.  I'll have to look into that. 

I still remember when it was a Krispy Kreme that was supposedly going to open up alongside the Whole Foods in East Liberty.  That is one of those only in Pittsburgh things that it even appears to make sense to somebody, but it really was talked about; didn't happen.  So now what?  Rumors that Tim Hortons might be moving into the Burgh, but I don't think they have a beachhead yet.  Still, what is going to save the retail bakery industry?

Just one word. Are you listening?     


 (Update: Mike points out the correct spelling, 'cannoli' is the plural, though I may not be the only one getting it wrong...  I still want to know, is it stadiums or stadia? and if you are perplexed by his title, here's a hint. I''d be curious who gets the origin of the title here?)

* and for those of you who read too many blogs, you know I mean only custard-flavored custard since we never allowed 'other' flavored custards.


Tuesday, July 12, 2011

Sir, please step back from the camera!

It takes a lot to leave me comment-less, but what do you say to these? Some know I am in the process of moving physical offices and all sorts of priceless things are surfacing under layers of wonkish artifacts and ephemera.  I guess I can't critique these since I am always saying folks don't even know who their local legislators are... so anything that can help can't be bad right? Still, who thinks of these things?   If your Civics Quotient is low then I give you the trading cards of the decade.  Maybe I should put them up on ebay for sale? Taking offers in any tradeable currency or most any other fungible asset for that matter*.

* Except gift certificates for anything involving cupcakes that is.


Pennsylvania setting the standard

Platts is discussing the lack of women in energy extraction energies.   I thought it was interesting because they quoted the percentage of women working nationally in energy as being between 20-26% and that being abysmally low.  As I pointed out recently, for Pennsylvania that factoid looks to be much smaller at more like 7.6% when it comes to new hires in the oil and gas industries across the state.

Gotta be a leader in something I guess.


Who knew the baseball season went on until the fall?

I really thought the baseball season ended with the All-Star Game. Can someone confirm they actually schedule games in August and September?


Monday, July 11, 2011

Border Guard Bob Pivots 180

Border Guard Bob really is our Rosetta Stone.  Years and years ago when Bob was just a glint in the eyes of some folks Downtown I got to see the storyboards of the whole campaign before they were introduced to the public.  I really was aghast.  The whole 'Border Guard' meme is just such an unwelcoming image.  My direct comment to the folks was that only in immigrant-less Pittsburgh would anyone even consider such a character for what the goal was.  The verbatim and immediate response was probably the ultimate example of the groupthink we often have going on here: "But the focus groups loved him".  I have always wondered who comprised those focus groups, but it seems that one could have been today's Allegheny County Council.  (not that Allegheny County Council had even been formed back at the time)

That all just came to mind reading another little news item that all but goes unnoticed on a Saturday in the summer: County works to bar illegal alien workers.   Agree with it, or disagree, it is one of those things that deserves a few orders of magnitude more discussion then again our notorious cupcakes... but likely will not be noticed much at all. It is good to see that Allegheny County council is being proactive in solving a problem that may not be our problem at all.

Again.. agree with the idea or not, at least understand where the Pittsburgh region stands with regards to immigration.  By any metric you want to come up with, among large metro areas we are about immigrant-free as you get.  Not zero, but in terms of sheer immigrant flows we rank last. Period.  If you think something has changed with that factoid for us over the last decade, the graph at the bottom is a comparison of foreign born immigration by metro areas, but is limited to just to those who entered the US since 2000.  That gives us a metric of comparison for recent international immigration and yes, we are unmoved from the bottom position.

That ranking does not even take into account the consistent finding that among the immigrants that do come to Pittsburgh are among the most highly educated in the nation.  That or the international  students who are here and part of that foreign born population and are also most likely here on perfectly valid student visas. You have to believe the higher educated groups are far less likely to be here without proper visas and documentation than the group of folks that new law is intended to target. In any ranking of immigrants with less than a bachelors degree for example and we will compare even lower relative to all the other metro areas.. We obviously can't rank lower than last..  we will just be an even further outlier on the bottom end of that graph.    If you really consider who that law is aiming to impact, we rank not just lowest, but lowest among the lowest in terms of immigrant flows into the region.  The point is that if needed to pick the one place in the entire country least impacted by foreign workers it is likely us..  and there is no sign the trend is really about to shift in any qualitatively significant way.

So what impact can a law like this have?  All this really does is place us in a group with regions like Altoona which rated a New York Times article a while ago: Altoona with no immigrant problem, decides to solve it.

If county council really thinks they have time to address problems that don't exist, you think they might want to occasionally address some real looming problems they generally ignore.

Anyway, the graphic:


Saturday, July 09, 2011

Missing the cake for the frosting

See...  even now the hold of the cupcake distorts my view of the economic landscape.  All that typing and I overlook what was fundamentally was a much bigger story yesterday. 

In an earlier post I had said the governor had signed the bill that would have effectively prevented a mass reassessment in Washington County.  I had it from a couple sources that all indications were the governor would indeed sign the bill.  Turns out that was wrong and the governor vetoed the bill. I think there must be an interesting story in whatever transpired.  Either the governor changed his mind, or both branches of the legislature pushed ahead with a bill without checking whether the governor would sign it.  It seems unlikely that they would want to have the governor look bad by having to veto a bill that passed by such a large margin in both chambers. Some folks in Washington County certainly went from a feeling of elation, to probably being a bit upset and confused. 

So does the legislature try to overturn the veto?  They certainly have the votes necessary given the initial votes for the bill.  It would be interesting if they try.. or even more interesting if they don't.  Of course, at this point they might need to return from vacation if anyone expects that to happen anytime before September. 


Friday, July 08, 2011

The Influence of Cupcakes Upon Pittsburgh: 2003-2011

Judging from the email I am getting I have to comment on the ‘news’ that the cupcake stores in town are closing.  Where do you begin to comment on such a big event in Pittsburgh history?  I am waiting for Mike’s take, but we clearly are doomed if we do not find a new path for a post-cupcake Pittsburgh. 
Where to begin??  First off, why does the closure of a relatively small cupcake shop rate news in a major metro area?  Breaking news no less!! Where else can something like this be raised to a metaphysical level? That in itself tells the tale of how overblown the story of the cupcake is here.
The whole story goes quite a way back.  It probably is all Mike’s fault when you think about it.
(Pittsblog: Rise of the the Cupcake Class 

No matter that the business model of the cupcake stores could not be sustained, the folks behind the biz really ought to be in advertising.  Never has such a level of ‘earned’ media been generated for something that mattered so little.  For years the rise of the cupcake shop was hailed as the future of the Pittsburgh.  News articles, magazine covers and idle chat all around was all about the cupcakes as if they were just invented.  You may think the coverage was all tongue in cheek, but it really wasn’t.   There were seriously people in town who attributed the existence of these newfangled cupcakeries as somehow causal to Pittsburgh’s economic growth.

Some years ago when this was only beginning out of hand there was a whole news story on the economic development impact it would have on the region.  (Trib: City Welcomes Pair of Trendy Cupcake Cafes).  It must have been the 'trendy' part that got us all excited; there can't possibly be anything 'trendy' in town here.   The story that exists online is not the original story as it made print.  You will see in it some references to a few wise pundits in town and the positive impact of cupcakes on Pittsburgh.  Nobody talked to us, or at least nobody talked to me for that story and the quote was really a lifting of some comments made here and over on Pittsblog.  However the words “Semi-seriously” or "joking" were not in the original story at all.  The revisions made clear what really ought to have been clear at the time that satire was the point.  It was funny that anyone could even have thought for a second they were serious.  Says a lot about how serious people are about economic development in town I hate say.  Read mikes reaction at the time to the curious news item (Pittsblog: Truthiness about the Cupcake Class).
How big a deal was this whole kerfuffle?  I mean, even Rich Florida weighed in.  That’s how serious a debate this all was here and around the world.   (Creative Class Blog:  Do we ever need a better press corps).

I guess I have to share a small bit of blame along with MIke.  This all had gotten so out of hand that with the nudging of our friend John A. at the PG his “Next Page” feature in the Post-Gazette went all-Cupcake for April Fools Day 2007.  Three articles that day addressed Pittsburgh's cupcake craze.  Mike:  The Cupcake Class and its Contentment,  Me: Cupcake Econometrics 101.  For my part I am quite proud to point out that every single factoid referenced was a real statistics you can look up yourself.  The trifecta of articles also included one article by honorary Pittsburgher Rachel Kramer Bussel who wrote Why Cupcakes are Hot.   As is described in her byline, Rachel had been the sex columnist for the Village Voice which makes my own contribution that day about as close as my writing will ever get to the carnal. 

So where does it all leave us?  We had better hope the emergence of cupcakeries was not a correlate of a new Pittsburgh or else today’s news may mean some dire times are ahead.  Maybe that angst is why it is such a newsworthy event?  Don’t worry Pittsburgh, you can still get cupcakes at Paddy Cake Bakery if you are really Jonesing .  If that fails, there are always the Ho-Ho's that Pittsburghers eat aplenty.  


sept douzièmes complète

The obligatory comment of the day goes with the extension of Delta's direct Pittsburgh to Paris flight.

Yay!  We won.

or 7/12ths won. Like the Pirates, everything is in this nether world these days where anything that can be considered not losing feels great. Still, it's better than if they canceled the flight outright.  The question is whether this is going to be a permanent seasonal flight, or if this is more a transition year. We will be back to that question next year I suppose.

So the flight is being extended, except for the winter season.  Pittsburghers it seems don't make it very far from home when the snow and ice set in. So we keep the extended summer season (7 months of the year) of direct flights to Paris.  I'd be curious what percentage of the seats are filled with folks originating in Pittsburgh, but save that thought for another day.

The newspapers have already asked my question, which is whether or not Delta will be paid for their 2nd year of contract service.  They received the maximum subsidy for their first year, which was obvious to me at the time it would be the case. but we have not learned what is, or isn't owed for the 2nd year. Seems like it is taking longer to get that answer this year.

Now they will continue for the summer season without subsidy.  A good thing, but not that remarkable.  Summer season has a lot more demand than the rest of the year and I suspect their was always enough demand for a summer service out of Pittsburgh.  USAir actually started their Frankfurt service as seasonal and remember we once also had Gatwick service during summer as well.  TWO international flights simultaneously!!  Must have been boom times for the Burgh?!

Does it matter?  Less than you think.  There is a clear image and pride with the 'international' moniker at the airport meaning something more than flights to Montreal (are there still direct flights to Montreal?).  And don't get me wrong, it can be cool arriving in the US and landing in Pittsburgh and being home all at the same time.  I think I will earn my own gold star on the flight later in the month.  Still, I have to admit it is usually for civic pride that I pick the flight over many other choices. That or it has usually been the cheapest choice as well.  The advantage of landing in Pittsburgh is clear, but that is just because the hassle of landing at a port of entry with a single international flight is just so much easier than landing in a place where you could easily find yourself in queue with passengers from a half dozen full 747's.  Still, nobody has ever measured meaningful rates of corporate relocations based on changes in regional air service.  If I'm wrong on that, I would love to read the cite.

So economically it just is not clear there is any advantage no matter what frequent travellers tell you.  As I pointed out long ago, there just isn't any accepted economic research finding increased air service a cause of region-wide economic growth; certainly not for a large metro region such as Pittsburgh, and their are tomes of research trying to find the causes of growth.  Causality may go the other way I am sure, but that means something else altogether. That and of course there are sub-regional impacts as airports are big enterprises.  This is the whole 'aerotropolis' meme... but that as a regional impact dilutes out for anything beyond small regions. 

The airport isn't entirely a dismal story for other reasons as well.  The other under-reported news out in Findlay is that Airport Traffic is up for the14th straight month.  Good for the airport's finances all around I am sure.  Is it up because of the Paris flight?  Probably not, unless we are now importing natural gas workers from Marseilles.

Speaking of Delta and regional growth.  Cincinnati is feeling its own airport pain.  It was once a Delta hub, but as airline mergers continue, they have found their terminal becoming more ghost-like as time goes by.  No schadenfreude here, we know that pain. 

Which reminds me of a question still bouncing around...  who will USAirways merge with next?  and what will that mean for the number of flights still at the airport?