Pittsburgh lobby group says more manufacturing can help rebuild area’s population

A labour-management alliance pushing for pro-natural gas and manufacturing policies named a new leader last week. Pittsburgh Works Together touts both sectors as critical to Southwestern Pennsylvania’s growing workforce, even though industrial employment in the region has been declining for decades.

Peoples Natural Gas President Michael Huwar will replace HearthStone Utilities CEO Morgan O’Brien as co-chairman of the Pittsburgh Works board. O’Brien, also Huwar’s predecessor at Peoples, will remain on the board of two-year organization, and Tom Melcher, business manager of the Pittsburgh Regional Building and Construction Trades Council, will continue as the other co-chair. Don Smith, president of the Regional Industrial Development Corporation of Southwestern Pennsylvania, became a new board member last week.

Huwar said economic growth in the Pittsburgh area depends on the success of industries like his. Southwestern Pennsylvania sits atop the gas-rich Marcellus Shale formation that extends from upstate New York. In 2020, Pennsylvania produced more natural gas than all other states except Texas.

“The region is full of natural resources, energy, water,” Huwar said. “We have a large squad. [The challenge is] just really finding the right training opportunities for that workforce.

“Bold action must take place in order to become…not only a robust economy, but [also into creating] jobs for everyone in the region — well-paying jobs not only focused on educational institutions [or] medical advancements but also manufacturing,” Huwar said.

Education and health care have steadily grown over the decades to represent the largest segment of the region’s workforce, representing approximately one in five employees in the region. Manufacturing, on the other hand, includes only 7% of workers in the Pittsburgh metro area, made up of seven counties — about a quarter of its employment level in 1969, when the steel industry still dominated — according to data from the US Bureau of Economic Analysis.

The sector is likely to generate only “moderate” growth over the next few decades, said PNC economist Gus Faucher, and technology has reduced the need for labor. But he said manufacturing “can help diversify the Pittsburgh-area economy,” which helps insulate the region from the ups and downs of the business cycle.

For example, there are opportunities in healthcare to manufacture medical devices, imaging equipment and pharmaceuticals, he said. And he noted that breakthroughs in robotics and artificial intelligence at local universities may depend on making new parts and products to have practical applications.

“The question is [that] research facilities may be located here, but does that mean manufacturing facilities are necessarily going to be located here? said Faucher.

“So yes, we can build on that [research],” he said. “But we have to make sure that we have the infrastructure in place, both the physical infrastructure but also the workforce.”

Pittsburgh Works argue that state and federal governments fund scholarships for building trades training. Such alternatives to earning a college degree can help counter the long-term population loss that has emptied rural and post-industrial communities in Pennsylvania as job opportunities have dried up, the group says.

But Faucher noted that a declining population prevents some employers from setting up shop in the area: They fear they won’t be able to find enough workers.

“But it’s a bit of a chicken-and-egg problem: if you attract businesses, it helps attract workers,” Faucher said. “And so it makes sense to see where Pittsburgh has advantages, what we can do to attract businesses that are attracted to those advantages and could support stronger population growth.”

He noted that the region benefits from deep expertise in metals due to its industrial past and relatively affordable energy, thanks to easy access to natural gas. Fossil fuel emits less carbon than coal, although it contributes to the leakage of methane, another greenhouse gas.

Huwar said the net corporate tax rate reductions in Pennsylvania will improve the state’s ability to attract more employers to the region. Governor Tom Wolf approved the cuts on Friday. It will lower the rate from 1% in 2023 to 8.99%, then gradually decrease by 0.5% each year until it reaches 4.99% in 2031.

But Huwar said the next governor should woo businesses more aggressively. He also thinks that the state should invest more in the development of industrial sites and streamline regulatory processes.

Pittsburgh Works has yet to endorse a candidate for this fall’s gubernatorial contest.

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