Saturday, December 21, 2013

But all the jobs being created are minimum wage

One of the Pittsburgh nabobisms that is more resilient than others is that jobs being created today, especially in Pittsburgh, are just not the quality jobs that we used to have here. Quality being usually defined by wage levels. So no matter what the trends look like for job counts (see previous post) it just does not matter, we must be continuing into the vortex of recession. For some it is a remarkable article of faith that no counterargument can assuage.

It is a perception all the more remarkable for the data it lacks.

Below is a long term time series of how local personal income per capita compares to the nation's. For 2012 local personal income per capita is 9.4% over the national average. So yes, Pittsburgh's income of late is better than it has ever been in the modern era, as it were.  That includes the period before steel jobs collapsed. If there was a period in the past that we (briefly) compared favorably to the nation, though not as good as today, it was the late 1970s. To understand that period you have to unpack the experimental negotiating agreement (ENA) agreed to between the steel industry and its workers, but that is a longer story for another day.

Don't get this wrong. For the individual steelworkers who lost their jobs, their incomes went south in most cases for the remainder of their working careers, but on average across the region the wages being earned today compare better to national norms than ever before. That says a lot about the jobs, the quality of jobs if you wish, that have been created here over the last decade compared to jobs that were common here in the past. To pull up the average that fast means the marginal jobs, the new jobs, must be much better paying than was common in the past. More to the future, it sure looks like the trends are continuing upwards as well. 


Source: Compiled from Bureau of Economic Analysis, Regional Economic Information System


17 Comments:

Anonymous marketdiamond said...

Or in other words . . .

Never listen to Democrats!

This meme of "oh but all the jobs are lower paying" started in the 81-93 time frame by the liberal spinsters, and now its being brushed off again and pushed on uninformed voters cause the DNC sees it might pluck Corbett out (these stats are reflective of 7 counties of data so Corbett can't get any credit!)

Remember kiddies, the DemonRats want you to learn . . . Corbett BAAAAD,

Obamacare GOOOOOOD.

Never mind that the facts show exactly the opposite! They are really praying that the old 5 to 1 ratio of registrations will just accept what the party bosses are shoveling again.

Saturday, December 21, 2013 11:51:00 PM  
Anonymous Anonymous said...

Dear marketdiamond,

Please go back to foxnews.com and the AM radio dial. There is just way too much to unpack in your comments. For starters, you cannot extrapolate the Pittsburgh metro to the entire state or the entire nation.

Geez, next you'll be commenting that we all would have been better off had "Barry" Obama let the entire auto industry fail.

Talk about pain for individual workers.

Sunday, December 22, 2013 6:46:00 AM  
Blogger C. Briem said...

I'll keep this simple. The chart is showing how PITTSBURGH is doing relative to the US. So it has virtually nothing to do with national talking heads. I suppose you could argue the national economy has been tanking since the beginning of the century, and merely that Pittsburgh is an exception for whatever reason... but again that regional story is all you can really talk about via that graphic.

I'd also argue it has even less to do with state level machinations. I get this call every now and then to pontificate (there is a word that might be taking on a new meaning) on the state of Pennsylvania's economy. I have nothing to say, or by the time I get explaining the following, they move on to others who have pithy things to say. I really don't think there is a Pennsylvania economy. PA is collection of regions that an historic political and geographic history has cobbled together. There are few economic themes that bind us. If not for a few intrepid surveyors on Mount Welcome a couple centuries ago, Pittsburgh might well be sitting in Virginia or Ohio anyway.

Sunday, December 22, 2013 8:10:00 AM  
Anonymous BrianTH said...

Pittsburgh's recent wage trends are not a surprise when you look at them in conjunction with the industries creating most of the new jobs (lots of Business and Professional Services, Eds and Meds, and so on). And for that matter, they go along with the educational-attainment trends among our younger cohorts that Chris has long been tracking.

Interestingly, the BLS is predicting that the next decade of overall U.S. job growth will look very similar to what has been happening in Pittsburgh in recent years:

http://www.bls.gov/news.release/pdf/ecopro.pdf

I'd guess if that prediction comes true, that would be good news for the region, and in fact specifically good news for Allegheny County and the City of Pittsburgh too (along other localities).

Sunday, December 22, 2013 1:23:00 PM  
Anonymous BrianTH said...

By the way, I share the skepticism about Pennsylvania being a particularly meaningful economic unit in any fundamental sense, although (perhaps unfortunately) the state government does have an impact in terms of how it taxes and spends, regulates, and so on. But all that is still just one factor among many when looking at any given local region.

Incidentally, Chris has shown how taking out the Pittsburgh region dramatically changes the picture when it comes to the trend in statewide mining jobs. But the same is true, albeit less dramatically, if you look at jobs in general. The Pittsburgh region has really been carrying the state throughout the recovery from the Great Recession, and it will be interesting to see if that fact ever starts to penetrate the public discourse.

Sunday, December 22, 2013 1:33:00 PM  
Anonymous marketdiamond said...

Again (as BrianTH got to) the whole "but they're all minimum wage jobs" meme is not only false but being pounded into us by the liberal Democrats (read above how they switch the message from targeting a Reagan to a Corbett).

These are the same liberal Democrats who just took over 1/6th of the American economy with Obamacare.

So even tho Chris Briem is right that Pennsylvania demographically & socioeconomically doesn't lend itself to 'one economy', when the same Dems spouting 'they're all minimum wage' are also the ones demanding a centralized top-down nanny-state socialized economy, then political borders are the economic boundaries. QED why Lt. Briem is now getting calls on exactly that, logically it is wrong but we are now entering a government run economy so state boundaries matter more and more.

To anonymous, wow I hope FoxNews is paying you a lot to shill for them, now that you added this blog as a link back to them.

I'd say more but I have to go try to apply for Obamacare for the 3,183rd time before the deadline, cause government lines have more and more to do with our local economy doncha know!

Sunday, December 22, 2013 3:20:00 PM  
Anonymous marketdiamond said...

Oh & I have often wondered about the Virginia (now West Virginia) thing CB, in fact I wonder if Pennsylvania could have annexed "western Virginia" in 1862 and changed the makeup of the whole keystone state, making Pittsburgh the center of it.

correction: Brian TH "got to that" boundaries do count with taxes etc. (and to me more and more with the increased socialization & nanny state--think congressional grants to states, and now there is more and more of them in bigger dollar amounts.)

To me the increased control of DC, the taking over of 1/6th the economy and how states are being seen as single economic entities are all one in the same, and this new normal is coming from the same peanut gallery saying "but they're only minimum wage" as a political tactic.

Well back to reading error screens on Healthcare.gov!

Sunday, December 22, 2013 3:40:00 PM  
Anonymous MH said...

If it weren't for the Republicans, I could never be a Democrat.

Sunday, December 22, 2013 4:13:00 PM  
Anonymous BrianTH said...

Please don't drag me into that nonsense.

The Pittsburgh region's recent higher-paying-jobs renaissance is mostly a product of idiosyncratic factors that say nothing at all about national trends. A lot of it actually dates back to the steel bust, which eventually helped Pittsburgh avoid the boom-and-bust housing cycle of the mid-2000s. And in a related point, I think a lot of Pittsburgh's recent gains in fields like Professional and Business Services are being driven by the ongoing cost of living, and thus cost of labor, advantage Pittsburgh has over most other major Northeast cities. That gap really exploded in the 2000s thanks in large part to housing costs, and it really did not close that much versus the key submarkets within those Northeast cities even after the housing bust.

Of course every region has its own story to tell, but Pittsburgh's recent story has to be one of the most unusual anywhere in the country. So it makes zero sense to be trying to rebut claims about national economic trends based on Pittsburgh's recent economic performance.

Sunday, December 22, 2013 8:10:00 PM  
Anonymous marketdiamond said...

Corbett isn't national but every Pennsylvanian is gonna get deluged with info on how he handled the "economy" and just like a California, Texas, Florida and New York State Corbett is going to be using Pittsburgh data to ask for re-election, and the DNC (the national guys) are going to take out-of-state contributions and funnel them not only into this metro but into the city itself to exclaim:

"But all the jobs being created are minimum wage"

so ibid all my above comments!

Sunday, December 22, 2013 8:47:00 PM  
Anonymous marketdiamond said...

should read " . . . Corbett is going to use [regional] data" ala Jerry Brown, Rick Scott, Cuomo and Rick Perry.

Sunday, December 22, 2013 8:48:00 PM  
Anonymous BrianTH said...

Corbett may well implicitly or explicitly try to rely on the Pittsburgh region's relatively good job performance in recent years as part of his re-election case (implicitly if he is citing statewide statistics dependent on Pittsburgh's performance), but that would be just as misleading as using that data for national political purposes.

For example, if you look at jobs growth in Eds and Meds, it is an incredibly steady trend going back to as far as I can easily get data, which is 1990. There is no discernable impact either way starting with Corbett's term.

Professional and Business Services first started taking off at least as earlier as the mid-1990s, but it has been more cyclical--it had an extended period of reversal after the dot-com bust, and then a shorter but sharp reversal after the housing bust. However if you hold aside these recessionary periods, the overall trend since the mid-1990s has been essentially exponential in shape, and again there is no notable change in trend associated with the beginning of Corbett's term.

Financial Activities started taking off in the early 1990s, then leveled off but didn't really reverse in the dot-com-bust era. However, it then went into an extended period of decline from 2005 to 2009 (note Financial Activities includes a lot of real estate related activities). However, since 2009 it has been rapidly increasing.

Mining and Logging, although it has attracted a lot of press, actually isn't as big a contributor in gross terms as some of these other industries. In any event, it started taking off around 2008, hit its most rapid pace around 2011, and since then has actually settled down into a slower (but fairly steady) trend. Of course as Chris has pointed out, the experience in the rest of the state is quite different.

And so on. Not only is the region idiosyncratic, but each individual industry has its own story to tell. For almost none of them, however, is there a notable correlation between the observable trends and Corbett becoming governor.

The only major exception is government employment. The Pittsburgh region actually has a relatively low percentage of direct government employment--which is good, because it has been one of the major sour notes in recent years. Usually government employment roughly tracks population, so unsurprisingly government employment in the region was more or less wavering up and down within a relatively narrow, flat band from 1990 to 2011.

In the last couple years, however, government employment has sharply declined, even as it appears the region has gotten onto a more positive population track. In fact the region has lost many more government jobs since 2010 (minus 9500 as of November) than it has gained in Mining and Logging (plus 3900 as of November).

Now a lot of that is federal, where national austerity policies have had a local impact. But a lot of it is state and local too, and the local is influenced by state policy, particularly in the very large area of public education. So the state's austerity policies under Corbett have had a direct, negative impact on regional employment through both the state and local channels.

And that is about as much as you can say either way about Corbett--to the extent his policies have had any discernable impact on regional employment, the employment impact has been negative. Of course whether or not those are good policies on the whole notwithstanding their immediate disemployment effect is a much broader debate, but I do think people should understand these basic facts about the timing of various employment trends when assessing claims relating to Corbett's time as governor.

Monday, December 23, 2013 10:02:00 AM  
Anonymous BrianTH said...

If anyone is wondering, the data I am citing is all available here (click on the dinosaurs for historic data, then you can reset the start date if necessary--often you can go back to 1990):

http://www.bls.gov/eag/eag.pa_pittsburgh_msa.htm

If anyone can spot a local employment trend that seems to correlate with Corbett's term aside from government jobs, I think that would be very interesting. So far I have not personally seen another, but I haven't looked at every possible trend.

Monday, December 23, 2013 10:50:00 AM  
Anonymous marketdiamond said...

Excellent analysis BrianTH.

But Govs Casey, Ridge and Rendell (as well as the powers that be at RIDC, Allegheny Conference, Pittsburgh SuperComputer Center, RAD et. al.) aren't on the ballot or airwaves in 11 months.

Big pols can pay to have their message beat into us, and the "But they are all minimum wage jobs" is one the Dems dust off every time they are going against a Republican, one has to wonder why it is people are chatting about this meme 11 months prior to Corbett trying to sell himself and the national DNC (which just took over 1/6th the national economy) is pouring out of state funds into Pittsburgh and elsewhere to have us all focused on "but they're minimum wage".

National political spending dwarfs almost every promotional campaign, and they spend to turn the truth on its head, it is great we have blogs like these to set it straight but where those false paradigms are coming from to me is just as important as proving them false. False paradigms are usually "means to an end" so considering the source and motive behind them tells a lot of where & why massive amounts of money are going to be used in a battle of state policies that do end up effecting Pittsburgh in a world where both parties have allowed a takeover of 1/6th the economy.

Monday, December 23, 2013 12:34:00 PM  
Anonymous BrianTH said...

I've been participating in discussions about Pittsburgh's economy for many years now, and this notion that new jobs these days are disproportionately low-paying has been used as a kneejerk response to positive news about Pittsburgh's job count since long before Corbett was elected, long before the ACA was passed, and so on.

I don't think this dynamic needs a fancy/conspiratorial explanation. If you are a naysayer about the Pittsburgh economy who finds himself confronted with statistics suggesting decent jobs growth, one obvious response is to explain away those statistics by claiming the jobs in question are poor quality. In fact it is such an obvious response, I'd be pretty surprised if this notion wasn't invented until 1981.

"Critics of the Soderini era have alleged that jobs growth was stronger under Lorenzo de' Medici. Spokesman for the Florentine Republic N. Machiavelli, however, claimed that the jobs created under the Medicis were generally low paying."

Monday, December 23, 2013 1:30:00 PM  
Anonymous marketdiamond said...

As I said waayyy above the 5 to 1 registrants inside the city proper have been hearing this meme from the DNC from at least 1981, it goes back as far as Reagan & Gov. Thornburgh as I can see.

The fact it is still being dusted off all these years later proves not only how the national DNC is involved in this but also how your excellent analysis BrianTH and others here are somehow falling short of disproving it for the only matrix of truly measurable public opinion, election day.

Nothing conspiratorial about it, I agree with all the conclusions stated on this thread, and yet somehow this alluring fallacy is still working on people much like anything else that is false but still promoted to the extreme by less knowing media . . . as they use to say follow the money, the political money.

It's simple, if you doubt my analysis of the source of this meme just watch and listen in the next 11 months, the drumbeat of this falsehood will be pounded into all of us in the electorate.

Monday, December 23, 2013 2:06:00 PM  
Anonymous BrianTH said...

It can be very tough to convince someone who sees everything through the lens of partisan politics that not everything that happens in public discourse is in fact about partisan politics. But there really is a lot more than partisan politics having an influence on the way people think and talk.

And having long experience with this meme, I already know that it is consistently raised whenever the subject comes up, regardless of the political context. So if it happens to continue to come up in coming months, that won't be proof of the claim it is arising from the current political process, that will just be proof of its ongoing ubiquity.

Finally, it indeed frustrating that it is hard to persuade every pessimist you meet with hard data, but you again don't need to posit some vast and evil political machinery to explain that fact. That is just human nature: there are always a variety of resolute Eeyores and Chicken Littles and so forth on any issue like this, and there always will be.

But again, if your worldview is consumed by partisan political thoughts, it may be tough to imagine that not everyone else is like that too.

Monday, December 23, 2013 4:47:00 PM  

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