Local economist Chris Briem has written a book that can help us understand what happened in Pittsburgh, and what other cities can learn from it. It’s an economic history called Beyond Steel: Pittsburgh and the Economics of Transformation.
Like most cities, Pittsburgh grew thanks to geographic factors. It became the center of steel production due to its proximity to large deposits of accessible, high-quality metallurgic coal. This led to the emergence of a huge complex of steel mills and related industries, including Andrew Carnegie’s famous firm, which was merged with others into the giant U.S. Steel Corporation in 1901.
But as early as the 1940s, the city should have known that steel’s days were numbered. During that decade, its leaders commissioned a consulting firm called the Econometric Institute to produce a report on the city’s economy, which concluded that the city was overly dependent on steel, and that the industry was likely to experience future problems. The report was suppressed for years. Two economists at the University of Pittsburgh studied the region in depth in the 1960s and came to similar conclusions that were likewise ignored.
Local leaders seemed justified in dismissing these reports — for quite a while. The steel industry experienced steep decline after the end of wartime production in 1945, but that proved temporary as the postwar American consumer boom sent demand for steel upward. The Korean and Vietnam wars and a series of other events kept demand high, and the industry stayed relatively strong even up until the early 1980s, when a steep recession caused a sudden collapse. Within a few short years, virtually all of Pittsburgh’s steel production was permanently shuttered.
This hit the city like a shock wave. Briem writes that “the Pittsburgh people were used to recessions/downsizing, then coming back. The idea that a plant could close completely and never reopen wasn’t a normal thing.” Steel was more than just the city’s economic base, it was its identity. The name of the Pittsburgh Steelers football team speaks to the importance of the industry: Its logo is designed to market the metal. Workers were often the second or third generation to work in the industry, or even the same mill. Briem describes their failed attempts to buy closed plants and reopen them. That’s how deep steel was in their blood.
The resulting economic catastrophe forced large numbers of people to leave. This especially affected younger families, leaving Pittsburgh with a skewed population pyramid. It was an aging city with more people dying than being born, long before this happened in much of industrial America. Even today, it has the smallest share of its population under the age of five of any other major metro area.
But eventually knowledge industries rose to revive the city economically, particularly in medical care and computer science. Google and Apple have set up shop in Pittsburgh, giving it a cache that few Rust Belt cities can match. As Briem notes, tech in Pittsburgh has been more about Silicon Valley firms accessing the talent clustered around Carnegie Mellon University (CMU) than about local startups (though there are some of those). The University of Pittsburgh Medical Center is a powerhouse.
It was not a matter of the city making a conscious pivot from steel to tech. The roots of the city’s knowledge industry extend decades back into the past. The University of Pittsburgh recruited Jonas Salk in 1947, leading to his development of the polio vaccine there in the 1950s. Likewise, Pittsburgh became an early center for organ transplants. Carnegie Tech, as CMU was then known, established one of the first computer science departments in the country in 1965. The city also benefited from having a long history of research labs owned by its major corporations. Pittsburgh’s knowledge economy was being built decades before steel collapsed, as a result of investments that were not originally designed to pivot away from steel but which helped the city recover after that industry’s collapse.
Pittsburgh’s knowledge economy has not helped the region’s bombed-out mill towns such as Sen. John Fetterman’s Braddock. Knowledge industries have not turned Pittsburgh into a regional dynamo. It’s an uneven recovery at best.
Still, Pittsburgh offers many lessons. It’s never good to be dependent on one industry (Silicon Valley should take note). The day of reckoning might take much longer to arrive than we think, but that doesn’t mean it isn’t coming. New, high-value industries can be developed — but it takes decades; there is no simple pivot. The long term rewards cities with leaders who are willing to look beyond the immediate payback. And no matter how successful a place is, or how secure it seems, disruption is capable of coming for us all.
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