Detroit, Michigan is teetering on the brink of collapse but it might be able to save itself by taking a good look at Pittsburgh, Pennsylvania.
Back in the '70s and '80s, Pittsburgh’s steel industry collapsed and hundreds of thousands of people left town. This is similar to what we’re seeing now in Detroit with the auto industry.
Pittsburgh, in effect, died. It had to find a way to reinvent itself after it had been relying on just one industry for economic growth for so long. So Pittsburgh turned to what residents and local economists might call "recession-resistant" industries, like health care and education.
Many locals call it the "Meds and Eds” economic approach. It seems to be working.
The University of Pittsburgh Medical Center is now the biggest employer in town with 26,000 people. Carnegie Mellon University is well known for an innovative Robotics program, and biotech is hot here.
Even the first office tower in downtown in 20 years is under construction. Guess who’s building it? PNC Financial Services ... a bank! Call it luck, but PNC pretty much got out of the mortgage business before the whole subprime mess and never wrote bad loans so they are actually growing without any stimulus money! Their conservative style paid off.
These reasons are why experts say Pittsburgh might make a good model for Detroit. Both cities long relied on one industry, have strong research universities and have seen their populations shrink.
And it’s not just that Pittsburgh is surviving, it’s thriving. Foreclosures are down, while in the rest of the country they’re up. Unemployment has crept up to 6.5 percent, but it’s still well below the national unemployment rate of 8.1 percent.
Home prices in the Pittsburgh region increased, on average, by nearly 1 percent in 2008, while nationally, home prices declined 8.2 percent, the steepest annual amount on record. Moody’s says Pittsburgh will be the only city out of the top 100 U.S. metropolitan regions to post a gain in housing prices one year from now.
Detroit should take notice. There may be a life-saving lesson here. Sure, Pittsburgh isn’t perfect. It will lose jobs this year and condo sales downtown have slowed, but TIME Magazine calls Pittsburgh, “One of the Bright Spots on Main Street.” That’s a pretty big compliment when the economy is in the tank, don’t you think?
Pittsburgh isn't exactly the shining City on the Hill. It's growth is stagnant at best, it can't keep it's college graduates from fleeing, it's got its own share of local government issues, tax controversies, etc. and that's about all one can be excited about there: a selection of schools, banks and hospitals. Oh yeah, and the sports franchises that hold its constituents contented.
Pittsburgh needs to modernize; while comparing it to a shambles of a City, ala Detroit, sure, it looks like the most fantastic place to live, learn and prosper in the United States. The reality, in my humble opinion, not so much. Once Pittsburgh's leaders realize they need to attract and retain the best talent, business leaders and disruptive business starters will it really "pop" onto the national scene, and end the forever referenced "steel city" of yesteryear who recovered to become something of a City, which looks in much better shape than, well, Detroit.
Can Detroit learn something from Pittsburgh? I agree with the many who've commented that it's a difficult, at best, comparison. They really each are their own animals.
Back in the early 1990s, we were weighing three different job offers in Chicago, Detroit and Pittsburgh. We chose Pittsburgh due to its cost of living and the feel we got from the community (I like to say it has a soul). We have never regretted our decision, it is a terriffic place to raise a family.
I would also like to correct some major misconceptions that many people have left on this board –
Since 2000, the population of 18 to 24 year olds in the Pittsburgh region has increased, while the area is one of the few to see its 65+ population drop. We are getting younger. The population is NOT collapsing and census data released today indicate that the drop is bottoming out.
The number of college students remaining after graduation is significantly higher than 10% and it has increased significantly.
Pittsburgh was never the number 3 HQ city in America. That false ranking was based on when the Fortune 500 only included industrial companies. They started to include service companies in 1994. In fact headquarters employment is one of Pittsburgh's fastest growing sectors.
The steel industry, while significantly smaller is alive and well. Regional metals companies are spending nearly $3 billion improving their facilities and the area ranks second in metals industry employment.
We still make stuff – high end metals, electrical components, nuclear power plants, transportation components. But fact is like everywhere else, these plants do not need thousands of low skilled workers, they need dozens of highly skilled, highly trained workers.
Traffic is not that bad and downtown remains a strong place to do business. In fact it is home to 135,000 workers, 25% more than in 1996.
Education and health care are industries. UPMC is a $7 billion corporation with facilities around the world. CMU and Pitt conduct nearly $1 billion in research annually.
Finally, the turnaround started in the 1940s when local corporations and businesses saw that the city would be doomed if it remained a dirty steel town. So when steel did collapse, the foundations were in place to build a new economy.
Yes there are problems that need to be addressed. There is too much government, the city remains under financial oversight, taxes are too high and we have an underutilized airport. But let's have this debate using current facts, not perceptions from the 1980s.
Pittsburgh is a great city to live in. There is a comment in this thread that says that the city cannot retain its graduates: not so. In my college in Carnegie Mellon, about 11% of our students are from the region, but about 18-19% of our known alum are still in Pittsburgh. We are contributing about 50-60 citizens to the city each year, and other colleges in the university have a similar experience. A very interesting article in the Economist last year compared the demographic of Pittsburgh to other cities with older populations, and predicted that in 10-15 years Pittsburgh will be a predominantly young city, while other older cities will retain their older demographic. It was named America's most livable city last year. Now if only the politicians would get their act together about the public school system.......
As a life-long Pittsburgher, I'll be the first to admit that the region isn't perfect, but it is pretty darn good. What the article failed to highlight is that the primary reason that Pittsburgh was able to make the turnaround from its blight in the seventies to our current situation is that private citizens – business leaders and wealthy individuals – led much of the effort. We are lucky in that we have lots of "old money" from the industrial revolution when Pittsburgh was thriving from sources like Andrew Carnegie, the Mellon family, and others. That old money was used wisely by business people and foundations to reinvigorate the city. Yes, our government helped, but mostly in a supporting role. It was the will and effort of these private citizens to take ownership of the city and turn it around that had the most impact.
I have to believe that Detroit still has wealthy business people and private citizens who are wealthy due to the success of the auto industry for many decades. Perhaps they would be motivated to lead the way, and not wait for government to solve their problems because it won't happen.
And by the way, PNC did take some bailout money. They used it to buy National City Bank, allowing them to become one of the largest banks in the US.
Mark from March 18th, 2009 5:10 pm ET, please take a close look at the nation's economic situation in the late 70s and early 80s vs the Pittsburgh MSA. Pittsburgh's implosion played a huge role in that situation. And steel was a much larger part of the economy at that time – larger than people realize.
At that time, Pittsburgh was also the third largest corporate HQ city in the nation – behind only NYC and Chicago. So, its economic footprint far outsized its population. Plus steel wasn't the only thing to die. The entire primary metals sector took a huge hit. Pittsburgh was also the nation's major glass center – also took a hit. Steel overshadowed a lot of things, but it was far from the only story.
Pittsburgh symbolizes the start of wholesale American de-industrialization. In many ways, Detroit may symbolize the end of this period. Given that the rest of the country falls somewhere else in this continuum (megacities of NYC, CHI, and LA notwithstanding), this may change our paradigm of what really is a 'winner' and 'loser' region.
I am disappointed that CNN decided not to come directly to Detroit, Michigan. Warren, Michigan is beginning to experience what Detroit has endured for the last 5-10 years, high unemployment. If the unemployment rate continues to rise eventually Warren will suffer the same fate as Detroit, Michigan. Many feel in this region and probably around the country, when the suburbs get a cold the cities get pneumonia. This economic crisis was exacerbated by predatory lending and has decimated the remaining stable neighborhoods in Detroit. It appears that the major media avoids Black and Brown areas devastated by this economic tsunami. The official unemployment in Detroit is 21%. However, if you count all of the unemployed it is probably 40%. How can a city or neighborhood survive with this level of unemployment? But I guess CNN does not want the world to know of the economic DEPRESSION in Detroit and similar urban cities. I thought your coverage would be more through and balanced, more like your coverage of New Orleans during Katrina.
I noticed a few comments on Pittsburgh's Population drop. It is true that it dropped significantly. Nobody can deny that. However, you have to look deeper at the matter. The Steel Mills employeed thousands per each one, and the blue collar workers they employeed had very large families in the industrial age. Pittsburgh shifted to a more white collar work base, and it SHED its population. The row homes in Lawerenceville use to hold large blue collar families, now they hold maybe a 20 something couple, or a single hipster artist. Pittsburgh's population use to be twice as large, however this was before the day of urban sprawl, and the metro was never even close to being twice as big. Not that I am a fan of urban sprawl in anyway.
Pittsburgh is far more of a vibrant and cleaner town than it was when its population was double. We have great cultural amenities of a larger city. This city would be densly packed if it was back at 600,000. It is still in the top 15 densist cities in the nation even with the population drop. We need to grow slowly and steady, and improve the urban blight areas that are still visible from the Steel Mill collapse in the Mon Valley and Allegheny Valley. I would love to see New Kensington become a stronger and vibrant town like it use to be as it is set up for it. Put trains in the Mon Valley and Allegheny valley, stop sprawling into crappy and ugly built housing plans, and move back into centralized towns. This will help the metro even more.
New studies have shown the population is almost beginning to stop, and turn around. A lot of the population loss now is due to the people who left in the 80s taking their kids with them, and leaving a large gap where the age of child bearing people where not here. However, the 20s and 30s somethings are moving in for jobs, and re-filling that gap. Also, Pittsburgh has a smaller out-migration amongst its youth as somebody stated above that it had a huge amount of people who left. This is not true. Of course 20 somethings leave the town they grew up in when they graduate college no matter where they live. However in Pittsburgh it is a smaller percent than other cities.
I'm 26 years old, originally from Pittsburgh, currently in Michigan (school at U of M) and dying to get back to the Burgh. I miss the vibrancy of the city and think it's a fabulous place to live. I go back as often as possible. That being said, I don't think that Detroit can be fixed as easily as it has many deeper rooted problems than Pittsburgh ever did. Pittsburgh turned around largely thanks to Carnegie Mellon and Pitt... 2 of the best research universities in the country. Detroit has the University of Michigan, 45 minutes away though. I don't know that one will help the other.
Like other posters have said, I think Pittsburgh is one of the best kept secrets in the country... I've traveled a lot but never found a vibrant city like Pittsburgh that is so affordable for a 20 or 30-something person.
I hated Pittsburgh growing up. Used to complain that there was nothing to do. But then I grew up and got to see other cities and places around the country like NYC. Man, life is so good here. It's affordable, clean, you can drive a car without much traffic, three major sports teams, and I'm even working a nice job in advertising. I live in a house with one roommate for $300/month each. I'd have to pay 4 times as much in NYC/Jersey.
I'll probably leave Pittsburgh for my career someday, but I know I'll be coming back.
Stimulus for Detroit??
I steadfastly believe that a more effective use of taxpayers' money would be to offer a $10,000 rebate to those who purchase a new American made car! Put the money in the hands of the consumers with a direct tie to the industry that is so close to collapse. Hmmmmm, maybe too simplistic for this complicated world?
A key figure in Pittsburgh's rejuvenation was encouraged to leave Pittsburgh by Wayne County Executive Ficano (Detroit is largest city in county) to come to Detroit to aide efforts of similiar diversification and re-development. The question I have is where is Dr Birru and why did such an accomplished and intelligent urban planner (I believe the only urban planner to be featured on the front page of the WSJ) leave his position in Economic Planning and Development for Wayne County? The answer would provide insight into the self serving and stifling politics that have existed in Detroit and its county for too many years. Best of success to Dr. Birru. Of us who know him we wish that he finds a municipality that recognizes his humble and brilliant insight.
I feel for detroit losing auto plant jobs me being from ohio were losing jobs here. everyday like anywere else maybe because I live here but it seems like Ohio is getting worse as time goes by.this really worrise me . My daughter is fininishing colleage a bio. mg. and was told not to expected a job from 2 to 5 yrs. this upsets all of us . she droped resumes all over and no luck she was trying to get a job in the animal field . I guess what I'm saying is all that education and money is for right now wasted just to get a job at mcdonalds they tell these poor kids the only way to get a good job is to go to colleage so they do just to find out there's nothing out there and you are over qualified and right now fast food places are the only places to go maybe right now this sucks . I hope you come to Cleveland Ohio thank you for listening
I have lived in the Detroit area since 1964. It has been dwindling since the 40's and has taken the brunt of this recession, feeling it long before the rest of the country and far worse than most of the rest of the country now. Having mainly the auto industry and suppliers as its economic engine has been a problem, but urban sprawl and the resulting sparse population of the city itself is a problem that will have to be addressed in innovative ways not yet thought of. As people left due to racial segregation (white flight), economic downturn and now foreclosures, the city still has the same geographic area to provide services (police, fire, schools) to, but with way less population and taxes to do so. Add in incompetence and malfeasance in the city government and school system and it will take a LOT of people a LOT of time and effort to resurrect it. That said, Detroiters are extremely resilient and generous even in the worst times and have an unbowed spirit that will serve them well in their efforts. The movie industry is starting to do more filming here and well-known celebrities (both local–Jeff Daniels for instance and other–Rosie O'Donnell recently) are taking stands for the development of Detroit and her people. Wayne State University and the Detroit Medical Center in Detroit as well as University of Michigan in Ann Arbor and Michigan State University in East Lansing can also be hubs of growth in education and medicine. In the meantime, we all need to look at what we really NEED to live (as opposed to what we WANT to live) and then recycle/donate to others who need them the useful things we no longer use or need. If we all reach our hands and hearts out to each other to help and to be helped, we will get through this and eventually be much "richer".
When I saw Pittsburgh, PA. this article got my attention. I am from Pittsburgh (actually Jeannette, PA. which is 30 miles east of Pittsburgh). Sound familiar–not all Detroiters live in Detroit!!. Anyway, this is not why I'm emailing. When I go home (Pittsburgh) to visit it is amazing how developed this steel city has become. Detroit can do the same.
On another subject, I have a suggestion about the bailout monies being handed out. Since the banks, AIG, auto execs won't handle the money properly, why not ask every household how much debt they owe (mortgage, one car, credit cards, school loans, etc.) and give each household stimulus money in order to get out of debt. This way we won't have to worry about losing our homes, the mortgages owed to the banks will be paid off and we will have money to put into the economy; such as replacing that old car with a new one. Starting with myself, if I could just get some help getting out of debt, life would be much easier. I think it is very arrogant of these executives to give themselves bonuses when the ordinary people are putting theirs bills on the kitchen table into piles of what we can pay out of this check and what has to wait. Came very close to my home going into foreclosure due to not being able to pay my property taxes on time. I am cutting back every where I can: cancelled cable (watch CNN on line now), turned off my home phone and just use my cell, etc. I'm trying to cut back any where I can. I think I will send this to my state reps and see how far this suggestion gets. We need help out here!!.
Folks...the Pittsburgh of this article does not exist. I've lived there twice and each time I desperately wanted to love it. Sadly, I could not.
The population of the city has dropped by more than 50% in the past 30 years. There are very few people in the 18 – 35 age range and if you're single...forget it. Entire neighborhoods are crumbling to the ground. The entire metropolitan area continues to lose population to this day...that's why housing is so cheap. The airport is using less than half of the gates and traffic is less than half of what is was pre-9/11.
Unemployment is relatively low...it's because everyone left and those that didn't and lost their jobs when the steel industry collapsed just stopped looking for work after a while.
Yes...UPMC has become the largest employer in the city...at the expense of five hospitals that closed and only after acquiring much of what was left (UPMC controls about 50% of the hospital beds in Allegheny County and, in my opinion, impede competition in the health care market).
Yes...PNC Bank is doing well...but the other financial institutions that once made Pittsburgh the second largest financial center on the East Coast are long gone...departed for New York, Charlotte and Cleveland.
Pittsburgh is a beautiful city in terms of history, pride, culture and aesthetics (there's nothing like seeing the city when you enter across the Fort Pitt Bridge or going to a Steelers game at Heinz Field). Sadly, none of that makes up for the most common phrase uttered in Pittsburgh..."we've always done it this way, why would be do it differently?"
Detroit, if you want to aspire to be something else, then aspire to be a Chicago, a Charlotte or an Atlanta but don't aspire to just limp along like Pittsburgh has.
I am from Detroit. Was raised in Warren but lived in Detroit for a few years as a young adult. Detroit is lost. It was lost when I was there and I believe it will continue its desent to the back pages of the history books. Detroit and its racism is what is killing it. And racism just doesn't come from one side of 8 Mile. Detroits leadership has been leading the city to ruin for many years and I am glad to be gone.
I'm not sure what Pittsburgh they are referring to in this article, but surely its not Pittsburgh, PA. We made the mistake of moving here (for my job) and can't wait to get out. Local governments are corrupt (our local PD hasn't been paid in WEEKS due to mismanagement of funds), the population is either retirement age or gang bangers. Local news said there were 3 shootings – just last night. Everywhere you turn there are boarded up buildings (if the building is still standing) and property can be had for a few thousand dollars. When housing is this cheap there is only one place to go – up! Just because we saw a 1% gain, doesn't mean its a good market!! Property value is STILL below what it was pre-collapse. Pittsburgh is NOT what you model a city after.
I am a former Pittsburgher. Even though I am a huge Steeler, Penguins, and Pitt fan, I completely disagree with the concept that Pittsburgh is a model for Detroit. I can't speak on behalf of Detroit but I can definitely speak about my 20+ experiences living in Pittsburgh. First, Pittsburgh is not financially doing well. Just few years ago the city filed for bankruptcy and state has oversight on their budget. Pittsburgh has consistently had financial issues over the past decade. Even when the economy was booming people were still leaving because of the lack of jobs and the lack of diverse jobs.
Second, over the past decade Pittsburgh has not attracted new businesses or diversity. There is a reason why each and every year Pittsburgh has experienced a population loss. THere is a reason why over 90% of Carnegie Mellon graduates leave Pittsburgh. If Pittsburgh wants to be considered a great place to live, then it needs to be great place for ALL people with different ethnic and racial backgrounds. In the past two decades, Pittsburgh has not attracted people with diverse ethnicities or backgrounds and is one of the major reasons why the population is declining. I competely disagree that "culture" is booming in Pittsburgh. I say that because I am not white.
Third, the local government is incompetent. The lack of leadership and lack of ambition has prevented Pittsburgh from growing. Healthcare and education are not money makers for the city. They are only components that are needed to make a region great. Pittsburgh is not learning their lesson from the steel industry with putting all their marbles in one bag. UPMC is the biggest employer in Pittsburgh with over 43,000 employees in the region. What happens if for some odd reason UPMC falls? The city and region will collapse again. There is alot of potential for Pittsburgh, low cost of living, small city, easy to get around, etc... however the government and leadership has not taken advantage of these assets.
Pittsburgh is far from a model city. The population continues to decline. The Democratic rule for the past many decades has the mentality of raise taxes to cover inefficiencies instead of to attract more residents to increase the tax base.
Detroit could learn a lot from Pittsburgh, including how to play football.
You want your answer? Can you handle the right answer?
No, Never, not in a million years. This is like asking if Pakistan can ever be like Denmark or if Bangladesh can ever be like Japan.
No, No, No!
my partner and I moved from the Detroit area 4 years ago to Atlanta. are we happier?............... no. we hate it down here and would move back in a second. will we be able to?............... who knows? everyone talks badly of Detroit, how awful it is. you'll never find a scrappier bunch than people from Michigan. Detroit and Michigan will come back, it will take time and when it does, we'll be at the state line waiting to get back in.
I am from Pittsburgh and love it. I need to correct an error: the reporter is wrong about PNC. PNC actually used stimulus money to buy National City and take another large local company away from Cleveland.
Some further thoughts from a lifelong Pittsburgh resident:
Never too cold, or too hot, blown away in the wind, buried in snow, or flooded in water – great overall climate.
Located a one-day drive from the Great Lakes, Chicago, Canada, the East Coast, New England, New York, Atlantic Ocean – great location.
Located on an eroded plateau on the base of the Allegheny (Appalachian) Mountains, with three rivers and deer, falcons, eagles, and wild turkeys to be seen less than a mile from downtown.
$2 billion in debt for a hockey arena, convention center, baseball field, football field (which a team with an assessed value of $1 billion couldn't afford to build on their own), and now a 1/4 mile tunnel under the river – the city is insolvent.
An international reputation for corruption and inept government.
Education and medicine are not 'industries', they are services – we can not have a wealthy city, country, or economy by providing services for each other – we have to make something.
The most down to earth people on the planet, even though they keep voting for democrats.
One party rule since the 1930's.
Rich in history – French & Indian War started hear as did the oil industry.
What will continue to hurt Detroit for many years to come that does not apply to Pittsburgh – Pittsburgh didn't go up in flames with race riots like Detroit, Pittsburgh was never listed as 'Murder Capitol, U.S.A., and in many, although not all, neighborhoods, it is actually safe to walk the streets, Talk to people from Detroit and they tell you to avoid going into the city at all costs if you can.
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