commentary

(Pittsburgh Post-Gazette)

September 26, 2004

Quality, Not Quantity

by Henry H. Willis

The Pittsburgh Area Doesn't Need a Booming Population in Order to Become More Prosperous

The term "bigger and better" is so common that many people see growth as a vital ingredient of prosperity. They point to West Coast and Sun Belt cities that have grown enormously in population in the past 40 years and experienced tremendous economic growth at the same time.

The link between prosperity and growth also often defines how we benchmark our region. The Allegheny Conference on Community Development, for example, has an objective of creating 50,000 new jobs in the region. As we are too often reminded, Pittsburgh does not fare well when examined through this lens.

In the 1990s the population declined about 2 percent and employment declined about 4 percent in the Pittsburgh Metropolitan Statistical Area, a federal definition of our region in southwestern Pennsylvania. As the Pittsburgh region's population and job base was shrinking in the last decade, the United States experienced 13 percent growth in population and a 12 percent growth in jobs.

But focusing on declining population and jobs may divert attention from the principal objective for the region — rising prosperity. Prosperity is measured by per capita income, not by net immigration, population growth or the average age of the community. In the 1990s, the per capita income in Pittsburgh grew by about 50 percent, matching the national trend.

Growing prosperity without a growing population has a number of advantages. The traffic congestion, high housing prices, air pollution and long commutes that plague California and other rapidly growing areas pose far less of a problem in the Pittsburgh area. Who can argue that sitting in traffic for three hours a day improves anyone's quality of life?

There is evidence that long-term prosperity in the Pittsburgh region can be achieved without population growth.

Paul Gottlieb, an economist at Rutgers University, has shown that growth of per capita income was only loosely related to population growth in the 1990s. Gottlieb presents the difference between per capita income growth and population growth as a way of measuring prosperity without growth. Using this measurement, Pittsburgh is among the leading wealth-building cities in the United States — outpacing such economic stalwarts as Seattle, West Palm Beach, San Francisco and Charlotte.

Greater Pittsburgh has much to offer. As evidence, the RAND Corp. selected the region for its third national office in large part because of the city's strong academic institutions and favorable quality of life. Pittsburgh's challenge is to build on these assets, avoid the problems of rapid growth and prosper as a medium-sized, slow-growing city.

Other cities have shown that prosperity is possible without rapid growth. Indianapolis and Minneapolis-St. Paul, for example, both experienced greater prosperity than Pittsburgh in the 1990s with roughly average population growth.

Like Pittsburgh, Minneapolis benefits from strong universities and a legacy of industry. Indianapolis has leveraged consolidated local governance to build a region with common purpose. Both cities have invested in their civic institutions and public amenities to build stronger, more attractive communities.

Yet prosperity without growth is not always good and may actually indicate regional decline. For example, an aging and shrinking population may appear to grow more prosperous. Those with low-paying jobs may leave in search of greater opportunities. Left behind are late-career employees, with higher incomes but few years left in the workforce. Such a trend is not sustainable.

Traditional economic growth, paired with population growth, would not be turned away in southwestern Pennsylvania if it happened tomorrow. However, the path for achieving this growth is poorly understood, and even if the route were known, history suggests that getting there is at least part chance.

In today's economy, where the work force increasingly votes with its feet, the quality of a community is important to a region's success in developing a qualified workforce. Without this work force, sustained regional prosperity is not possible.

People prefer communities that have safe neighborhoods, good schools, educational opportunity, diversity, affordable housing and quality public parks. With such clear and widely accepted preferences, it is not surprising that prosperous communities often share these characteristics.

Building desired qualities into a community is more straightforward than creating the next Silicon Valley. But building and maintaining these characteristics requires prosperity — hence a chicken-and-egg dilemma. At a minimum, regional planning and economic development need to always look to enhance these desired qualities in our communities and to never degrade them.

If prosperity without population growth is a realistic goal, then the challenge for Pittsburgh is not how to spawn the next gold rush. Rather, the challenge is to once again make Pittsburgh widely recognized as one of the nation's great livable cities.

Henry Willis is an associate policy researcher at the RAND Corp. in Pittsburgh.

This commentary originally appeared in Pittsburgh Post-Gazette on September 26, 2004. Commentary gives RAND researchers a platform to convey insights based on their professional expertise and often on their peer-reviewed research and analysis.