Wednesday, April 29, 2015

100 months and counting

So I know the news makes all things sound so dire, but nonetheless the latest dump of labor force data puts Pittsburgh past 100 months since the local unemployment rate was above the national unemployment rate. There really has not been such an extended period that has ever happened in the past, at least as far back as labor force data was routinely reported at a regional level in the 1940s. Indeed the convergence between the two trends we need to watch, and I would not be surprised if the trend comes to and end, at least briefly, at some point this year... but in graphic below green is better than red....

Worth noting that the 2014 numbers are likely to be revised so we will see what this all looks like after those numbers get re-reported.


Wednesday, April 22, 2015

A tale of two school districts

It is hard to reconcile these two news stories.....

Last week there as this passing headline:  A $110 million upgrade at Mount Lebanon High School. Of note to Mount Lebanon taxpayers I suppose, but not much to notice elsewhere.

and then pick any recent headline being generated by the ongoing miasma of the Duquesne City School District where the state forced the high school to close and then forced neighboring school districts to take in  the refugee students against their wishes.  Think it was voluntary that the neighboring school districts took the kids in? See this recent headline: West Mifflin Area to sue for tuition reimbursement.

To be clearer, I guess the students are not refugees, since you typically need to cross an international border to be considered a refugee. So they are internally displaced students I suppose. Seriously, this does not happen elsewhere in the developed world writ large. Why is there not daily news/punditry on what is happening in Duquesne?  Not the feel good story is my only hypothesis.

Nothing against Mount Lebanon making whatever investment it thinks it needs, but it is just shocking that everyone treats the ongoing implosion of the Duquesne City School District as normal at this point.

For all the talk of New Pittsburgh, realize that in most any other part of the country the city of Duquesne would not exist as a separate municipality, but instead would have been absorbed long long ago into the center city... i.e. Pittsburgh. So it is a geographic (and political) fiction to think of it as a distinct place from the city of Pittsburgh proper and it is certainly part of Pittsburgh writ large.

Maybe some ratio analysis to put the scale of this in perspective.  Population under age 18 in Duquesne in 2010 =  1,513.   For comparison population under 18 in Braddock (which gets to attend Woodland Hills schools anyway) was 605.  So I guess we need 2.5 new restaurants to save Duquesne.

Nobody is talking of bringing a high school back to Duquesne.  Greater talk is of the entire school district shutting down. Maybe other school Pennsylvania school districts can just close up shop and send all their students to wherever the state decrees they must be taken in.  These other school districts typically fight against this, but have lost their legal actions to stop it from happening. Wilkinsburg is reported of late to be trying to send its students to neighborhing school districts, but have only been rebuffed outright.

Of course, Duquesne might be an extreme case, but not really far from the state of many Pennsylvania school districts, 500 in all.  Thus what may be percolating at least in the Governor's office, if not in the state legislature. See the Washington Post today which prompted this little diatribe:   Pa. schools are the nation’s most inequitable. The new governor wants to fix that.  


Thursday, April 09, 2015

and again Pittsburgh immigration

Now well over a decade ago Pittsburgh made the front page of the New York Times for the unique and focused efforts here to attract immigrants to the city and region.  See: NYT (2001): To Fill Gaps, Cities Seek Wave of Immigrants. A couple years later the WSJ would run this type of story in 2003: Pittsbrugh Trying To Lure Latinos.Might be a good time to look back to see what has changed over the subsequent decade.

Lots of factors impact the flow of immigrants into a region. Lots of itinerant populations are here due to things like students on temporary visas (who for the most part can't stay) and professional workers who are also here only temporarily, such as those with H1B visas.  Many eventually convert to a more permanent visa status, but in the long run the question is who comes here to stay.  Thus a measure of whether immigrants are choosing to come to Pittsburgh and stay is arguably the number of permanent naturalizations that happen in Western Pennsylvania.

2001-2003 was bad timing for immigration-focused efforts anywhere as post-9/11 changes slowed dramatically the flow of new immigrants into the country for a time.  But that flow returned over the decade, as it did in Pittsburgh.  Still, the latest numbers recently out for 2013 show the current level of naturalizations in Pittsburgh just about where they were in 2003.  Seems to be a plateau between 1,300 and 1,500 a year here.  This low level is a Pittsburgh thing, and just for comparison Cleveland recorded 3,076 naturalizations in 2013. Even Cincinnati comes in around twice Pittsburgh's number with over 2,700. Proportional to the region's population the numbers don't get much lower.

Correction: Table below shows data for annual naturalizations in Pittsburgh, not as labeled incorrectly the number obtaining lawful permanent resident status.  

While the overall number of naturalizations is much the same as a decade prior, the actual characteristics of new residents here appears to be changing. You can breakdown the chart above into place of birth of those being naturalized.  For Pittsburgh the number of naturalizations generated from folks born in Mexico and South America is pretty stable, but remarkably now below the number of naturalizations of folks born in Africa, which quadrupled in Pittsburgh from 2003 to 2013.  Nationally that ratio is about half has many from Africa as from Mexico and South America. This may relate to a Pew note out this week on how a rising share of the Black U.S. population is foreign born.

Sorry the 2nd chart starts in 2003.  Hard to get the comparable data for 2002, but will gladly update if anyone has it?

Still the focus here a decade ago as much geared toward attracting Hispanic immigrants.It looks to me that the increasing trends have been mostly in immigrants from Asia, which includes the subcontinent, but the smaller but increasing trends from Africa and elsewhere in North America. I may need to look into if/how much of the surge in Asian-born naturalizations here comes from the surge of Bhutanese into the greater Cleveburgh region.


Monday, April 06, 2015

The city's pension solution that wasn't

Believe it or not, this is a post about the Pirates.  Opening day has come and the anticipation is abuzz with variations of a theme for the Pirates prospects this year. See for example Deadspin: The Pittsburgh Pirates should be America's Team this season.  I, of course, am more interested in the latest iteration of Forbes' valuation of the team which values the Pirates at a mere $900 million.  A playoff win this year might jump the team over an even $billion.

It all might not have been. Long forgotten is the not-terribly-distant history that could easily have put the Pirates anywhere else but Pittsburgh. In 1985, the Galbreath family, which had owned the Pirates since the 1940s announced their intention to sell the team. For a city in the depth of miasmic economic restructuring, there were multiple obvious choices for a new location for the team and the Galbreaths clearly left open the possibility the team would move as part of any sale.

So the city of Pittsburgh, out of its excessive budget surpluses of the 1980s, loaned a consortium of private and nonprofit sector owners $20 million dollars to purchase the team in 1986. That works out close to $50 million in cash today. The consortium of new owners was named the Pittsburgh Associates and is still the owner of the team and the MLB franchise here, though the original owners have long since sold their shares of the team.   The whole deal was described as a "Public Private" partnership and headline described the deal as: Pirates sold to mayor, steel city businesses.  So the city was clearly the glue of the whole financial alchemy.

While the city's contribution was technically structured as a loan, it really wasn't. It retained much of the risk of the formal equity partners. The city didn't actually have that kind of cash lying around and  needed to finance $20 million fronted to the team with a bond issued in 1986.  The interest rate charged (8%) to the team owners by the city was actually deferred almost every year, while the required bond payments (which could not be deferred) were eaten directly by city taxpayers.

As a thought exercise, imagine the city's $20 million was an equity investment in the team. Just for fun, let's ignore any potential legal problems with that counterfactual. The actual transaction price was $26 million, split nearly equally among the 13 private partners. Thinking of the collective capitalization, the city's contribution would have made the city over 40% owners of the team going forward.  Fun to think about, but it would place the city's share at a value of at least $360 million these days.  That much cash would not completely solve the city's pension problems, but redefine the problem entirely.

Of course, that is all daydreaming.  The city will not benefit from the equity gain in the pirates in recent decades I'm sure.  But where did the value come from?  If you look at Forbes complete list of MLB team valuations you see some interesting things.  A proxy for profit is "operating income" and the lowly Pirates show up as having the 5th highest operating income in all of MLB.  Calculating operating income as a proportion of total revenue looks to me that the Pirates come in a remarkable 3rd.  Winning record, losing record... the team has had a financial success all of its own for many years.

Looking back it is more remarkable that the city found it politically possible to front such a large amount to a set of private sector investors to buy a major professional sports team.  Hard to imagine anything that risky could be pushed forward today with a chunk of public money that size.


Sunday, April 05, 2015

How many popes have ever visited Pittsburgh?

With Easter, the news is percolating on the previously announced visit of Pope Francis to Philadelphia later this year.  No sign he will come to Pittsburgh, but begs the question how many pontiffs have ever come to Pittsburgh.  The answer is nonzero. At least two I count.  More?


Wednesday, April 01, 2015

Move over Pierogies - Cupcakes to be named official food of (New) Pittsburgh

Really.  Say goodbye to the Pittsburgh Pierogi..   and the unofficial mascot - the Primanti French Fry. In the future, it will all be about the cupcake.

No, really.

Ok, ok... just in honor of April 1, it is worth going back and remembering our great cupcake obsession here in Pittsburgh.  Yes, there was once a time BG20 (Before the G-20) that Pittsburgh was so desperate for positive economic stories that the faintest smell of cupcakes in town drove everyone into a state of near-rapture. It was so weird because it ran in the face of just what Pittsburgh was, the place which once set records for Ho-Ho consumption (though I pointed out the number reported was just to sweet to believe and was later corrected) and where the mere rumor of free-pies would set off public panics.

Think I'm misremembering our cupcake obsession?  I refer you to Mike who summarizes it all so much better: The Truthiness of the Cupcake Class. Yes, Mike and I were once seriously 'quoted' in the paper from blog postings attesting to our belief in the economic impact of cupcakes here. Only after the fact was the online version rewritten to reflect the satire that was dripping.

If that is not enough to explain what a big deal this was around town. This all inspired the great cupcake trifecta in the Post-Gazette. Again Mike: What's behind the bite-sized baked good boom.  My own contribution: Cupcake Econometrics 101 Every number in that is quite real by the way since I refuse to put fake data into record, April 1 or not. And then from cupcake aficionado Rachel Kramer Bussel: Why Cupcakes are Hot! The original title must itself have been too hot, since it now reads The Allure of Upscale Cupcakes.

Mike also had the epilogue asking all this long before me. Is Pittsburgh a post-cupcake city? Apres the cupcake: Pittsburgh's Deluge.

Few post-mortems on what happened to the cupcake establishments in town have been written, certainly a small fraction of the ink when they started up.  Most of the former dedicated cupcakeries are gone, but the local French bakery quotient seems to be skyrocketing.  I do need to update my regional benchmarking of bakeries per capita.

Never fear,... just a joke.  In fact, not only have we gotten over the cupcake obsession but there is a newfound appreciation for our food heritage.  Especially in food, the New(tech) Pittsburgh has met old in ways unimagined of a decade ago. I talk about things such as the Fish Fry App (and the Fish Fry Google Map) widely used during lent, but now there is the ever more useful throughout the year: PieroGIS; the Pittsburgh Pierogi map. And with the news of the ever shrinking Heinz in town here, the real Heinz heritage (think Pickles) may live on in new Pittsburgh-themed gourmet Pickels.

For those still reading.. still one of the funnier economic development stories to read long after the fact.  For all the success of new development in East Liberty and the East End (no longer referred to as Eastside??) the original plan to build the Whole Foods market on Centre Ave. was to have it paired with a Krispy Creme donuterie (are you reading out there @DanFitzWSJ?).  Such a Pittsburgh idea, not that it came to pass.