Monday, April 24, 2017

Conversations with Will

Even if I had completely given up on blogging, this post I would have to write. An understated obituary notes the passing of my friend Will Steger in the Post-Gazette today. If you do not know Will, if you are an Pittsburgh East-Ender you probably recognize his consulting firm if only from its name. At the center of East Liberty (on Highland, just a few buildings away from the corner of Penn and Highland) you would see the CONSAD building.  Basically Will founded CONSAD since he came to Pittsburgh in the 1960s and set up shop doing economic and policy consulting. If nothing else, he had a front row seat to a lot of East Liberty history, but that is just the beginning. 

As a lesson on what never to put off what you want to do, I long wanted to make time to do a more complete oral history project with Will on his life in urban economics and all things related. Alas, I let that slide and now regret it. But I have had the chance for many a long conversation with Will over the years (decades) and am grateful for that.

Really if you dig into it, Will was really at the beginning of all that would later be called urban simulation and modeling.  He was literally one of the earliest employees of the RAND Corporation and became one of the earliest folks to try and apply their skills in security world to urban problems. He told me he had been recruited here by Ben Chinitz, who was at the University of Pittsburgh then, to start work on urban simulation and modeling, and in particular to build a computer model of growth and change in the City of Pittsburgh. In the early years Will said he would share, or borrow, student programmers from the computing laboratory still in its early days at CMU. Really you will see his name routinely referenced in the academic literature on all the early work of folks trying to build computer models for cities and to apply the results to planning and policy. If you think that is normal stuff these days, 1) it still isn’t and 2) at the time was really an immense challenge. Basically he was years or decades ahead of the state of the field.

There was so much more Just in passing he once said he was a tutor for Daniel Ellsberg when they were both graduate students at Harvard.  Ellsberg being a game-theory economist of some note, but later much better known for his role in the leak of what became known as the Pentagon Papers. Will’s early work at RAND almost inevitably included defense and security work and he said he once was part of an interview with Curtis LeMay, famed commander of the Strategic Air Command early in the Cold War. 

I took the opportunity to scan where Will pops in the academic literature and some things I didn’t know.  Are you a transportation or citizen participation wonk?  Here is an article from the 1970s that was probably before its time: Reflections on citizen involvement in urban transportation planning: Towards a positive approach” Transportation, Vol. 3, No. 2, July 1974. 

But one thing I’ve never been able to track down Will always thought that what later became the entire SimCity franchise of computer games (are they even really just games?) somehow grew out of his early work on urban simulation and computer models. I never was able to find any definitive provenance behind that, but I am sure it is true in some form.  The genesis of SimCity includes references toother urban computer modeling efforts from late in the 1960s, but not the jump to Will’s earlier work. If anyone has any more specific info on how that early history may have translated to what became SimCity, I would love to hear it.

CONSAD grew and he wound up working on a lot of other policy issues over the many many decades.  He would tell me about work with President Johnson on the War on Poverty and with subsequent administrations to include a few more presidents. Later the firm wound up doing more energy work and other topics, but still the field of urban infomatics (a term only coined long after he was practicing it) owes a lot to Will.  And the rest of us just appreciate the conversations. 

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Monday, April 17, 2017

Pittsburgh's Long March


When I talk about Pittsburgh's economic history there are a few points that usually spark some pushback to this day. One is a basic observation that there are more jobs in the Pittsburgh region than there were before the collapse of steel-related jobs in the 1980s.  Some folks, probably anyone who has any memory of that period of local history, finds that hard to believe. For them, there were just were too many jobs lost, and its hard to see where all the new jobs came to replace so many of the lost mill jobs. But it really is true.

It is almost inevitable that the follow-on retort I get is that the jobs that 'replaced' the steel jobs were far less well-paying than the jobs that came before. One thing is very clear: for almost all of the workers who lost their mill jobs in the 1980s, very few ever regained the earnings power they lost. But for the region it is a more complex story. Yet it is certainly true that average earnings here are above where there were before the collapse of steel, even if adjusted for inflation. But that is true almost everywhere, the question is how have local earnings and wages compared to elsewhere.

I pulled a time series of "earnings per job" for the Pittsburgh MSA going back to 1969. I then adjusted the data for inflation to reflect 2015 $dollars. For comparison I also included the same data for the United States overall and also the metropolitan part of the United States. Why compare the metropolitan US and not just the US as a whole? Benchmarking is something of an art in regional analysis and what is a fair comparison to "Pittsburgh" is debatable. But there are stark disparities between the metropoltian and non-metropolitan United States, a long topic unto itself, but a fact that has become more widely known since the fall.  So it is usually true for income statistics, and related, that Pittsburgh fares better than the nation as a whole, but part of that is because all metropolitan regions compare favorably to the nation as a whole

The punch line, and the factoid of the month... Prior to the 1980s, Pittsburgh maintained average earnings significantly above the United States.  The collapse of manufacturing jobs did indeed bring down local earnings by the middle of the 1980s. We kind of muddled around the average for a decade, but by the mid 1990s we actually started falling behind the metropolitan United States. Look at the most recent data and you see for 2015 a rapid convergence. The chart makes it look like we have caught back up to the metropolitan United States for the first time in over 20 years. Technically we are still just below the metro US number ($60,318 vs. $60,371), but a difference of less that 0.1%, 





Cycling back to where I started. One other thing jumps out at this graph if you stare at it. While I push back on the idea that earnings are currently below where they were before the 1980s, wages in Pittsburgh were depressed for a long time. From an inflation-adjusted peak in 1978, average earnings in Pittsburgh only reached higher in 2004. So it took a full quarter century to get back to where we once were, long enough for a lot of memories to get set. And to be very sober about it, until just recently, average earnings have not really gained much above where we were in 1978, at least until very recently... and we will have to see if that holds up in 2016 data. Probably will be some pullback as those shale bonuses shrink.  

The footnotes:
-Average earnings per job from: Bureau of Economic Analysis, Regional Economic Information System, Table CA-30 Economic Profile
-Inflation index from: Bureau of Labor Statistics, CPI All Urban Consumers (1982-1984 = 100) - Series CUUR0000SA0

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Tuesday, April 11, 2017

Death and Rise of the Creative Class

Thanks to various folks who have mentioned the blog here to me in recent months, suggesting it has been, at least marginally, value added in the past.  There is no single reason it has been quiescent here of late, and I'm not quite sure people read blogs any longer, do they?

Alas, I'll post this here for future reference.  Many will have seen this already, but in Sunday's Post-Gazette I had a review of Richard Florida's newest book in the boundless Creative Class series. You can read the review itself in the Post-Gazette here: 'The New Urban Crisis': Richard Florida updates his influential thesis

But for a historical footnote, I really meant it when I said that much of the the Creative Class concept was 'gestated' in Pittsburgh.  If anyone wants to read what may be the genesis of it all see this local report: Competing in the Age of Talent: Environment, Amenities and the New Economy, by Richard Florida, January 2000. You can almost feel that 'eureka' moment that set the path for all that followed.

What I think many younger readers may not appreciate is the economic context when that was written. Most of the 1990s were part of an extended economic boom that had generated jobs and pushed down unemployment across the nation. In broad measure, economic conditions in Pittsburgh were doing ok, but was not keeping up with the regions that were really booming over that time. The nation had sustained so much growth that finding workers was a major problem for many firms. For anyone whose career experiences have been more shaped by the impact of the Great Recession and since, that all may seem like another planet. Still, it's hard not to read back on Richard Florida's earlier work without taking into account the economic history that spawned it.

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