A business-labor alliance that lobbies for pro-natural gas and manufacturing policies named new leadership last week. Pittsburgh Works Together casts the two sectors as key to growing southwestern Pennsylvania’s workforce, even though industrial employment in the region has been shrinking for decades.
Peoples Natural Gas President Michael Huwar will replace HearthStone Utilities CEO Morgan O’Brien as Pittsburgh Works’ board co-chair. O’Brien, also a predecessor of Huwar’s at Peoples, will remain on the board of the two-year-old organization, and Tom Melcher, business manager for the Pittsburgh Regional Building and Construction Trades Council, will continue to serve 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 every other state but Texas.
“The region is flush with natural resources, energy, water,” Huwar said. “We have ample workforce. [The challenge is] just really finding the right training opportunities for that workforce.”
“Bold action needs to take place in order to grow ourselves into … not only a robust economy but [also into creating] jobs for all in the region — high-paying jobs not only focused on education 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, accounting for about one in every five employees in the area. Manufacturing, by contrast, comprises just 7% of workers in the seven-county Pittsburgh metropolitan area — roughly one-quarter of its employment level in 1969, when the steel industry still dominated — according to data from the U.S. Bureau of Economic Analysis.
The sector will likely drive only “modest” growth in the next few decades, PNC economist Gus Faucher said, and technology has reduced the need for labor. But he said, manufacturing "can contribute to diversification within the Pittsburgh-area economy," which helps to insulate the region from the ups and downs of the business cycle.
For example, there are opportunities in health care to make medical devices, imaging equipment, and pharmaceuticals, he said. And he noted that robotics and artificial intelligence breakthroughs at local universities can depend on the manufacture of new parts and products to have practical applications.
“The question is [that] the research facilities may be located here, but does that mean the manufacturing facilities are necessarily going to be located here?” Faucher said.
“So, yes, we can build on that [research],” he said. “But we need to make sure that we have the infrastructure in place, both the physical infrastructure but also the labor force.”
Pittsburgh Works argues that the state and federal governments should fund scholarships for training in the building trades. Such alternatives to earning a college degree can help to counteract the long-term population loss that has hollowed out rural and post-industrial communities across Pennsylvania as employment opportunities have dried up, the group says.
But Faucher noted that a dwindling population prevents some employers from locating in the region: They worry they will not be able to find enough workers.
“But it's kind of a chicken-and-egg problem: If you attract businesses, that helps attract workers,” Faucher said. “And so it does make sense to see where Pittsburgh has advantages, what we can do to attract businesses that are drawn by those advantages and that might support stronger population growth.”
He noted that the region benefits from extensive metals expertise due to its industrial past and from relatively affordable energy, thanks to easy access to natural gas. The fossil fuel emits less carbon dioxide than coal, although it contributes to the leakage of methane, another greenhouse gas.
Huwar said reductions to Pennsylvania’s corporate net income tax rate will improve the state’s ability to bring more employers to the area. Gov. Tom Wolf approved the cuts Friday. It will lower the rate by 1% in 2023 to 8.99%, phasing down by another 0.5% each year until reaching 4.99% in 2031.
But Huwar said the next governor should court businesses more aggressively. He also thinks the state should invest more in developing industrial sites and streamlining regulatory processes.
Pittsburgh Works has yet to endorse a candidate in this fall’s gubernatorial contest.
