Thursday, January 8, 2009

After Steel, a Successful City

I have sort of a soft spot for Pittsburgh. When I lived in Ohio, we were pretty much on top of the PA border. And we were definitely in what was called the "Rust Belt," because of the decline of the area's steel industry.

The NYT has a story today about Pittsburgh and how it's succeeding without steel:

"Unemployment is 5.5 percent, far below the national average. While housing prices sank nearly everywhere in the last year, they rose here. Wages are also up. Foreclosures are comparatively uncommon.

A generation ago, the steel industry that built Pittsburgh and still dominated its economy entered its death throes. In the early 1980s, the city was being talked about the way Detroit is now. Its very survival was in question."

Now two of its biggest industries are education and health care (known as eds and meds). Both are fairly resistant to downturns, tho the story points out that Pittsburgh had the luxury of rebuilding while the county had a strong economy.

From the story:

"The question is whether Pittsburgh can serve as a model for Detroit and other cities in the industrial Midwest as they grapple with large-scale cutbacks in the automotive industry. Even with the federal government’s $17.4 billion bailout, General Motors, Chrysler and Ford are expected to continue shrinking."

Eds and meds are a good platform for a strong economy; hospitals and colleges, for instance, generate revenue, as well as jobs. They can anchor communities, as well as provide resources to them.

But the caveat with those sectors is that for them to create real economic development for a city, they need to bring in capital from outside the community.

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