What Westinghouse Wrought

For all the talk about a potential Amazon HQ2 coming to Pittsburgh, the news last week of massive layoffs at Westinghouse Nuclear is really a far larger story for Pittsburgh in at the near medium term and beyond. Granted, Amazon is advertising a potential new jobs count of ~50K, and the layoffs at Westinghouse are ‘only’ on the scale of 1,500, those two numbers to not really tell the tale.

Consider that the Amazon 50K is entirely notional at this point.  Even if Amazon's 2^nd headquarters ever gets to that point, you have to expect it will not be anytime soon. Consider also that the nature of jobs at Westinghouse Nuclear are very different that what is likely to come with Amazon. No doubt Amazon is a technology company, but still the jobs at an Amazon headquarters probably won’t be on the same salary scale as the technical talent concentrated at Westinghouse. Consider then the long history and deep connections of the nuclear power industry in Western Pennsylvania. A mature industry has deeper supply chain linkages and deeper economic impacts than any new industry locating in any region.

But ignoring those handwaving arguments, here are some harder facts on just how much nuclear power meant to Pittsburgh’s economy, or vice versa.  For Pittsburgh, the BLS itemizes 32 specific occupations with employment under the broad category of “Architecture and Engineering Occupations”. The 20 largest of those occupations ranked by number of jobs located in the Pittsburgh MSA looks like this (with average annual pay for each):

So not the largest of local occupations, it is up there, but nuclear engineers in Pittsburgh are among the best paid in the region. But here is the bigger deal.  I took the same table and annotated the number of jobs in the US economy for each of those engineering occupations. So again among the 20 largest engineering occupations in Pittsburgh I’ve now ranked them by what percentage of the national workforce is located in Pittsburgh:

What jumps out is pretty startling.  You do not see such concentration in broad occupational groups in any one area of the country.  I once did this as a location quotient, but this ratio analysis works out much the same and shows just how big Pittsburgh was as a nuclear power industry cluster... a cluster with W at its core. At one point I am pretty sure there existed no bigger cluster of nuclear power engineers anywhere in the nation, at least when it comes to civilian workers. So losing a big chuck of that is going to sting, and sting for some time. A big deal for the region as a whole and really a big deal for Cranberry, and likely even Monroeville where many of those workers used to work before Westinghouse relocated.  I won't even begin to get into the longer term impact of potential pension issues for Westinghouse that are emerging, issues that have to have a concentrated impact here more than anywhere else. 

Note that this is a big issue across Pennsylvania. Out in Harrisburg, Three Mile Island is essentially shut down because there has not been sufficient demand for the power it generates. The latest is that the plant will be shut down permanent, which will be a big hit on the economy near Harrisburg. Add it up and the collective losses of the nuclear power industry and pretty significant and may not be over yet.