Economy of Pittsburgh

Main Article: Pittsburgh, Pennsylvania

The economy of Pittsburgh, Pennsylvania is diversified, focused on services, medicine, higher education, tourism, banking, corporate headquarters and high technology. Once the center of the American steel industry, and still known as "The Steel City," today the city of Pittsburgh has no steel mills.

The city of Pittsburgh has shifted from an industrial economy to one based on health care, research, hospitality and tourism through the 1990s. The City of Pittsburgh was forced to file for financially distressed status under Pennsylvania's Act 47 in December of 2004. Financial analysts are cautiously optimistic as the unemployment rate seems to have peaked at 6.8 percent in January of 2003 and has come back down to 4.8 percent in April of 2005.

The largest employment sector for the Pittsburgh area is in health, educational, and social services. Though heavy manufacturing is only 12.3 percent of the work force as of May 2005. Estimates in 2005 shows research is now the third largest industry; the Pittsburgh area is home to 150 laboratories and over 7,500 scientists and engineers. Service, hospitality, and tourism jobs are growing fast as well, adding more than 10,000 jobs in these sectors since 1994. Film making is another emerging industry. Major motion pictures made in Pittsburgh include the original Angels in the Outfield, Night of the Living Dead, The Deer Hunter, Flashdance, Gung Ho, The Silence of the Lambs,Lorenzo's Oil, Hoffa, Groundhog Day, The Wonder Boys, and The Mothman Prophecies.

Also, Pittsburgh ranked in the top five Most Livable Cities in the 1983, 1985, 1989 and 2007 editions of the "Places Rated Almanac."

Major Employers

Present Employers

"Many of the United States' largest companies have a Pittsburgh presence, including Alcoa, Bayer, Calgon Carbon, Del Monte Foods, FedEx Ground, Freemarkets, GlaxoSmithKline, H.J. Heinz Company, PNC Financial Services Group, PPG Industries, Sony Electronics, US Steel Corporation and Westinghouse Electric Company. Most of the largest employers in Pittsburgh are regional companies."

University of Pittsburgh Medical Center

Main article: University of Pittsburgh Medical Center

"UPMC is an $8 billion integrated global health enterprise headquartered in Pittsburgh, Pennsylvania, and is one of the leading health systems in the United States. UPMC is western Pennsylvania’s largest employer, with 50,000 employees, and ranks as the no. 2 employer in the Commonwealth. UPMC operates 20 academic, community, and specialty hospitals and 400 outpatient sites, employs 2,700 physicians, and offers an array of rehabilitation, retirement, and long-term care facilities. UPMC is committed to giving back and reinvesting in the community. In the most recent fiscal year, UPMC’s community contributions topped $500 million and represented 13 percent of net patient revenue. In 2007, UPMC made a $100 million commitment to The Pittsburgh Promise to fund postsecondary education for Pittsburgh’s high school graduates.”

Giant Eagle, Inc.

Main article: Giant Eagle

Giant Eagle Inc. is one of the nation's largest food retailers and food distributors with approximately $7.1 billion in annual sales. Founded in 1931, Giant Eagle, Inc. has grown to be the number one supermarket retailer in the region (ranked 32 on Forbes magazine's largest private corporations list) with 158 corporate and 65 independently owned and operated supermarkets in addition to more than 130 fuel and convenience stores throughout western Pennsylvania, Ohio, north central West Virginia and Maryland. Giant Eagle, Inc. currently employs over 30,000 community members.

West Penn Allegheny Health System

Main article: West Penn Allegheny Health System

The West Penn Allegheny Health System is a network of six affiliated hospitals serving the greater Pittsburgh area, including Allegheny General Hospital, Alle-Kiski Medical Center, and Canonsburg General Hospital. Among its specialty services are cancer treatment, emergency medicine, and orthopedics. The health care system, which operates with nearly 2,000 beds, admits over 78,000 patients and handles over 200,000 emergency visits each year. The system also helps to deliver annually more than 4,000 newborns.The West Penn Allegheny Health system employs about 13,000 people.

University of Pittsburgh

Main article: University of Pittsburgh

The University of Pittsburgh operates its flagship campus in the Oakland neighborhood of Pittsburgh where about 27,000 graduate and undergraduate students attend; more than 6,000 more students are enrolled at four regional campuses. Pitt students pursue studies in nearly 20 schools and colleges, including arts and sciences, business, law, medicine, and engineering. A state-related university, Pitt is also affiliated with the UPMC Health System, which operates about 20 hospitals and an insurance company manages physicians' offices, and offers long-term and in-home care. Pitt was founded in 1787, making it one of the oldest universities in the US. The University currently employs over 11,000 people.

PNC Financial Group

Main article: PNC Financial Services

PNC Financial Services operate about 2,600 branches in the mid-Atlantic region and the Midwest. In addition to retail banking, the company offers asset management, insurance, investments, and capital markets products and services. It provides fund administration services through PNC Global Investment Servicing. PNC also owns boutique investment bank Harris Williams and about a third of money management giant BlackRock. PNC used some of the funds from the US Treasury's $250 billion plan to bolster the banking industry to acquire troubled rival National City in 2008.

History

Early Foundation

During the 18th century large coal deposits were discovered throughout Pittsburgh. Mt. Washington, originally called "Coal Hill" “most valuable deposit of bituminous coal in the entire United States, was discovered there in 1760”. Along with the natural resources of the area, Pittsburgh was located at the intersection of the Monongahela, Ohio, and Allegheny Rivers, that is, along the major trade routes of the United States. Thus, making Pittsburgh "one of the world's leading industrial powerhouses".

In 1982, the economy of Pittsburgh faced the Homestead Strike between the Amalgamated Association of Iron and Steel Workers and the Carnegie Steel Company. After the worker's previous wage contract expired in 1892, and a new negotation was not reached a violent conflict ensued leaving several dead and wounded. Ultimately, The Carnegie Steel company won and had avoided union formation in Pittsburgh.

Industrial Revolution

Pittsburgh produced around one third of the national output of steel by the 1920's. During this time period Pittsburgh was home to the world's largest tube and pipe mill, structural steel plant, rail mill, wire manufacturing plant, bridge and construction fabricating plant. "Boat building and metal industries were later the economic base of the region. When coke from coal began to replace charcoal from wood in iron and steel making Pittsburgh grew up as the heart of the industry. A plentiful supply of bituminous coal underlies the Pittsburgh area." Around forty percent of the nations coal was obtained from within 100 miles of Pittsburgh.

Twentieth Century

In the 1900s the economy of Pittsburgh was primarily driven by the steel industry. In 1901, The Amalgamated Association of Iron, Steel and Tin Workers organized a general strike against the U.S. Steel Corporation subsidiaries, causing the first strike since 1892.

Due to the reforms of Franklin Roosevelt's New Deal, steel unions gained success in Pittsburgh. The Wagner Act of 1935 gave employees rights to self-organize in labor unions and made it unlawful for employers to prevent or interfer with such unions.

However in the 1970s the steel industry collapsed leaving half of the nation's steelworkers unemployed.

Transition into the Present Economy

Higher education and health care were the biggest creators of high wage jobs Pittsburgh-wide between 1999 and 2005. Allegheny County is home to the vast majority of the jobs in education and health care, and so it is natural to expect that Allegheny County played the lead role in the significant regional job growth that occurred in these sectors. And in fact, it's true that the vast majority of the net new jobs in education (80%) were created in Allegheny County.

Other high-wage sectors which grew region-wide over the past six years were finance, professional services, and wholesale trade. Although Allegheny County is home to the majority of the region's jobs in these sectors, the net new job creation in these sectors occurred in the nine counties outside of Allegheny County during this period. Allegheny County actually lost over 4,000 jobs in these sectors during this period. Fortunately for the region, the job growth in the outer counties was strong enough to offset the losses in Allegheny County and still result in net new jobs for the entire region.

Why is Allegheny County losing jobs in these sectors while the other counties are growing them? It's not because businesses are fleeing Allegheny County – the number of businesses in these sectors increased in Allegheny County while the number of jobs went down. The job losses appear to be due primarily to the downsizing of big firms, and the biggest firms are located in Allegheny County.

Thanks to a strong tourism industry, the region experienced significant growth in the leisure and hospitality sectors, with 11,000 net new jobs created in the past six years. Half of those job gains occurred in Allegheny County, and the other half occurred in the other nine counties.

Present Economy

Pittsburgh appears to not have been as affected as badly as the rest of the nation during the absolute worst of the recession. Our nation's economy has taking the hardest hits in the housing and automotive industry, fortunately for Pittsburgh, it has relatively little dependence to either of these industries. Pittsburgh never had much of a “housing boom”, thus Pittsburgh has not been disturbed locally to the loss of the housing activity. Pittsburgh has several educational institutions and a wide range of health care related employers that steady the local economy through the recession. As a result, Pittsburgh’s unemployment rate will remain well below average.

Production jobs in the Pittsburgh Region decreased by 17% between 1999 and 2004 – a loss of about 14,000 jobs.but the good news is that the loss of production jobs in Pittsburgh has been lower than almost anywhere in the country. In the same time period, nationally production jobs dropped 19%, in cities such as Philadelphia, Seattle, Milwaukee, Cleveland, Indianapolis, Detroit, Richmond, Boston, and Silicon Valley lost 25% or more of their production jobs during the same period of time.

Statistics

Employment

The largest occupational group in the Pittsburgh area was office and administrative support with a total of 202,300 jobs representing 18.0 percent of area employment. Sales and related jobs made up the second-largest major occupational group in the Pittsburgh area with 124,520 jobs and 11.1 percent of local employment. Other local occupational groups with above-average shares included healthcare practitioner and technical, healthcare support, community and social services, and food preparation and serving related. Transportation and material moving and production jobs were also among the larger occupational groups in Pittsburgh, accounting for 6.9 and 6.7 percent of employment, respectively.

Twenty First Century Progression

1 out of every 5 jobs in the Pittsburgh region is in health care or higher education, the second highest percentage among the top 40 regions. Fortunately, our region’s strengths are broader than health care and higher education. We have 3,400 more jobs in professional and business services than 2008, the fifth highest growth rate in that sector among the top 40 regions. In 2008, Pittsburgh added 1,500 construction jobs, thanks to the many development projects around the region.

2009 G-20 Pittsburgh Summit

Main article: 2009 G-20 Pittsburgh summit

"Over the past 30 years, Pittsburgh has become a model for economic, environmental and quality-of-life transformation and has created a diverse, balanced and resilient economy driven by a people who have imagined a bright future – and worked together to make it happen." Pittsburgh continues to use its historic success in industries such as manufacturing, finance, business services and energy. The region is the second largest advanced manufacturing market in the United States. "Once the heart of steel production, Pittsburgh has become a global center of advanced manufacturing engineering, technologies and systems." "More than 100, billion-dollar-plus global businesses are either headquartered or base a major business unit in the Pittsburgh region. More than 300 foreign-owned companies have a presence in the region."

"In total, Western Pennsylvania has more than 50 green projects underway and, until June 2005, Pittsburgh had more square feet of certified green building space than any other city in the United States. Over the past two years, Pittsburgh has been cited for its green building leadership in The Economist, Fortune, USA Today and New York Times."

Pittsburgh utilizes human capital for the creation of new industries supported by research, innovation, and entrepreneurship. Some examples of this would be the health service sector that provides more than 100,000 jobs and the regions 35 college and universities with over 70,000 people working on research and development.

The natural and cultural qualities of the area are exploited to invest in infrastructure and institutions that improve our quality of life. The public-private partnerships work well to utilize the large amount of philanthropic resources on innovative development of cleaner living. "Pittsburgh is home to more than 30 LEED®-certified green buildings, including the first green college residence hall and Phipps Conservatory and Botanical Gardens, which will host the welcome, opening reception and leaders' dinner for the summit."