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Why some cities are losing people but getting richer

In this Pennsylvania city that was once the heart of the American steel industry, Pittsburgh is shrinking, but it is getting richer every time. Since 2000, its population has decreased by 95,000, while its per capita income has soared by 24 percent.

The trend is taking hold in many other cities, including Buffalo in New York, Providence in Rhode Island, Springfield in Massachusetts and New Orleans. Surprisingly, it is also happening in a city like Huntington, West Virginia, which is beset by an opioid epidemic and a loss of jobs in coal mining.

Some of these metropolitan areas have well-paying jobs in energy, health or education. Others have managed to reshape their manufacturing legacies for a new economy.

What is happening in these cities contradicts the conventional wisdom that simplistically defines economic health through the growth of employment and population.

In fact, the rapid growth of employment can be unhealthy, if most of the new positions are low-wage jobs that do not increase per capita income. In contrast, the highest-paid jobs have a multiplier effect because they create a demand for additional services.

"History in Pittsburgh is very positive, and other metropolitan areas see it as an example of the transformation that could be possible," said Guhan Venkatu, who wrote an economic history of the area called "Rust and Renewal" for the Bank of the Cleveland Federal Reserve.

High Technology and Blue Collar

Sterling's academic institutions, such as Carnegie Mellon University and the University of Pittsburgh, have helped bring technology and innovation jobs to the area by sponsoring technology incubators that help graduates to start businesses without moving to Silicon Valley or San Francisco.

The strategy has helped maintain the growth of the educated young population of Pittsburgh even when the general population in the city and region has declined.

Pittsburgh has more STEM jobs (science, technology, engineering and mathematics) than other declining cities, roughly 80,000 or 7 percent of all jobs. Providence, Buffalo and Davenport, Iowa, are behind approximately 5 percent, according to an analysis of Stateline of federal employment statistics that use the census definitions for STEM jobs.

STEM jobs, along with business, management, arts and media, tend to add productivity and revenue growth to a metropolitan region, according to Richard Florida, an urban studies theorist at the University of Toronto and former chief of staff. an economic development center at Carnegie Mellon.

Income in Pittsburgh has been higher than the national average since 2010, after falling below the average in 2000. However, its population has steadily declined since 1970, a period during which it has been overtaken by Miami, Dallas, Portland , San Antonio and 14 other cities.

The makers of high-tech medical devices in the Pittsburgh area have doubled employment in the last 10 years. Jobs in scientific research and computer systems design have also played an important role in the success of the region.

The final piece of the puzzle came in the mid-2000s, when fracking at Marcellus Shale, largely near Pittsburgh, made Pennsylvania the largest producer of natural gas in the United States. U.S.

Blue collar jobs at natural gas plants pay an average of $ 65,000, according to federal 2017 payment statistics. Similar jobs with similar salaries can be found in Huntington, New Orleans, Beaumont and Springfield.

"What makes the places different, they still have manufacturing, do they still have [energy] extraction?" Said Anthony Carnevale, director of the Georgetown Center on Education and the Workforce. "These are the things that tend to get stuck with the time

Difficult to sustain?

But some experts question whether rising per capita income can really compensate for a stagnant or declining population.

"A city with slow population growth and rapid income growth can be considered healthy, if only because more resources are available," said Patrick Adler, Ph.D. at UCLA and a researcher at the University of Toronto, but the loss of population does matter, Adler said, if that means that less skilled workers have fled because of the lack of opportunities.

In Huntington, well-educated health specialists, such as nurse anesthetists, earn an average of $ 174,000 per year. They are in high demand in Huntington hospitals serving in outlying rural areas, said Roger Cruse, president of the West Virginia Association of Nurse Anesthetists.

"We make quite good money," Cruse said. "We do not fight economically, and I think that is inspiring some local youth to look at the profession and perhaps even outsiders to think about moving here."

But high-paying jobs in education and health care can disappear if the population declines too dramatically.

"If you go through small cities, you'll always see that the one with the hospital has some good jobs," Carnevale said. "But if the population is too old and rural, that's just a generation burying the last one, it's not sustainable, I think there will be some consolidation of medical care in more urban areas."

And in some places, there are specific reasons for the disconnect between population growth and per capita income.

In New Orleans, where the population has decreased by 4 percent since 2000, the devastation caused by Hurricane Katrina in 2005 is still visible from the city center, where the views to the east show the scars of the devastated neighborhoods After the storm. Many of the residents who were displaced and never returned were low-income, part of the reason why per capita income has increased 24 percent since 2000.

However, the New Orleans area has also benefited from jobs with relatively high salaries at petrochemical plants, which have sprung up along the Mississippi River north of the city, said Loren Scott, professor emerita at Louisiana State University. An economic consultant. Plant workers earn approximately $ 71,000 on average, and with more training they can earn up to $ 100,000 a year, Scott said.

Natural gas products are much cheaper to manufacture in the United States than in Europe or Asia, which helps generate more high-wage jobs in the Gulf Coast, where export by ship is easier, Scott said.

However, in the long term, maintaining prosperity in the face of population loss can be difficult.

John Deskins, director of the Office of Economic and Business Research at the state of West Virginia University, said that despite the "bright spots" in regional hospitals and power plants, Huntington must do a better job to support his youth, They are leaving the area for better opportunities elsewhere. His departure inflates per capita income, but it is a worrisome sign for long-term prosperity.

It is likely that the Huntington area will experience further population loss in the coming years due to aging and poor health related to coal mining and opioid abuse. As a result, much of the revenue growth will come from increases in Social Security, disability insurance and other government payments, according to projections published by the Deskins office.

Even Pittsburgh would be prudent to find ways to increase its population, said Venkatu.

"If you continue to lose employees or people, it's also a measure of your attractiveness and your likelihood of finding long-term success."

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