More People Are Leaving the Region. Does It matter?

Sometime in 2008, more people began moving into the cities and suburbs of southwestern Pennsylvania from other parts of the country than were leaving for places and opportunities elsewhere. It was a watershed moment, the long-awaited reversal of a decades-long trend of being on the losing end of U.S. migration patterns. It proved to be short-lived.

Within five years, the region fell back to losing more residents than it was attracting, raising concern that the trend is a deep-rooted threat that the region cannot shake.

But is it?

It turns out that recent migration gains and losses in southwestern Pennsylvania are more of a reflection of hiring trends in a single industry, demographic and labor data suggest. The boom in Marcellus Shale natural gas production some 10 years ago kicked off a five-year trend during which the region attracted more people than it lost. When shale gas employment flattened in 2014 then declined, the region’s migration gains disappeared.

“That’s the reason. There is no mystery here,” said Chris Briem, regional economist at the University of Pittsburgh University Center for Social and Urban Research.

The Pittsburgh Metropolitan Statistical Area is also not alone in losing more residents than it gains from other places in the country. Only four of 16 Pittsburgh Today benchmark regions posted domestic migration gains in each of the last 10 years. And the biggest loser among U.S. metro areas year in and year out is New York City, hardly the definition of a failing region.

Traumatic past

It’s not that concern over the region’s ability to attract and retain more people than it loses to other U.S. cities has never been unwarranted. The collapse of Pittsburgh’s steel industry in the 1980s triggered a mass exodus.

Domestic migration is the flow of people into and out of cities and regions within a country. That flow includes a high rate of young adults, who typically move for employment or education. And when they leave, they take their future families with them.

The severe hemorrhaging that southwestern Pennsylvania endured in the wake of steel’s decline slowed to a trickle within a few years. But the loss of tens of thousands of young adults over that brief period profoundly reshaped the demographic makeup of the region in ways that continue to be seen.

It also led to lingering anxiety over the migration trends and extraordinary efforts to staunch the flow of young adults to other places. They included Border Guard Bob, the fictional star of an aborted ad campaign whose idea of retaining young adults who couldn’t be persuaded to stay was to attach a bungee cord to the back bumper of their cars and proclaim, “They’ll be back.”

But recent migration losses pale in comparison with those the region endured in the 1980s. In 1984, during the height of the exodus, southwestern Pennsylvania lost 50,000 more residents than it gained; roughly 70 percent were 18 to 39 years old. The single-year loss was more than six times greater than the net loss of residents in 2017, which was the region’s worst year in more than a decade, according to U.S. Census Bureau data.

Peaks and valleys

Migration in southwestern Pennsylvania over the past 10 years is characterized by steady gains from 2008 to 2013, followed by a string of net losses in subsequent years.

Employment trends were behind those peaks and valleys, particularly in the shale gas industry, which blossomed when energy companies were able to extract tremendous volumes of natural gas from the Marcellus Shale formation that lies beneath the region.

Unemployment in the Pittsburgh MSA was lower—sometimes much lower—than the national rate from January 2007 to March 2015. Hiring was brisk in the shale gas industry for much of that period, especially early on when companies drilling at a feverish pace were importing thousands of workers from Texas and other more mature oil and gas regions to supplement a local gas and oil workforce too lean to meet the demands of rapid expansion.

But by 2016 the number of active gas rigs in Pennsylvania was down 80 percent from its peak in 2011, rig count data show. By 2017, the number of gas extraction workers the industry employed had fallen 15 percent from its peak three years earlier, according to U.S. Bureau of Labor Statistics data. Unemployment in the region had climbed above the national rate. And the brief trend of attracting more people than the region lost each year did an about-face.

Other evidence underscores the impact of shale gas employment on the region’s migration flow. In 2015-2016, the largest net losses were to Dallas-Fort Worth and Houston, two oil-and gas-rich Texas regions, and Tampa-St. Petersburg, Fla., which reflects the fact that 19.5 percent of the Pittsburgh MSA population is old enough to retire—the highest such rate among benchmark regions.

Drilling operations have regained their footing over the past 18 months. But changes in the industry temper expectations that greater activity in the gas fields will fuel future regional migration gains. The once-insufficient local natural gas workforce has grown more capable of meeting demand after a decade of development.

Advances in technology and practice and other factors have led to stunning efficiencies in shale gas extraction that also apply downward pressure on the industry’s labor force. The reach of a single well has greatly expanded, lessening the need to drill more. Production has steadily increased, even during recent years when natural gas prices slumped. Today, for example, Pennsylvania produces about 1 billion cubic feet of gas per extraction worker—a volume that took 2,300 workers to produce 10 years earlier.

“If you compare production to the rig count, it shows they’re much more efficient than they’ve previously been, which might explain why we haven’t seen as big of an employment bump that some might have expected, especially of late,” said Corey Young, director of the Center for Energy Policy and Management at Washington & Jefferson College.

‘An emotional issue’

Whether shale gas or another economic factors conspire to steer southwestern Pennsylvania on a course toward gaining residents or whether the region continues to lose them to other places in the country remains to be seen. But domestic migration flow will likely remain a concern, if history is a guide. “It’s an emotional issue,” said Jim Russell, a northern Virginia-based geographer who studies migration flow, including its impact on southwestern Pennsylvania. “Our sons and daughters are leaving. Why would someone want to leave a great place?”

Migration flow alone tends to be a fickle indicator of the health and potential of a place. No U.S. metro region loses more U.S. migrants than it attracts than New York City. From 2016 to 2017, its net losses totaled 209,000 residents. Yet, the metro area was a winner in the fiercely competitive bidding for Amazon’s second headquarters late last year.

New York grows its population by having more births than deaths each year and large numbers of immigrants arriving on its shores—two characteristics lacking in Pittsburgh. Moreover, it’s a place where people go to acquire human capital to be successful. “New York is an engine of prosperity,” Russell said. “People move there in large numbers and move out in a better station. It’s an escalator city: You move in, up and out. I think that’s a marker of vibrancy.”

Boston and Philadelphia are among Pittsburgh Today benchmark regions that have found themselves on the losing end of domestic migration in the past four years.

In some cases, the circumstances that lead people to leave are far from an indictment of the region. People with higher levels of education tend to be more mobile. And Pittsburgh does a good job educating its citizens compared with other regions. Nearly 94 percent of the Pittsburgh MSA population has at least a high school degree, one of the highest rates in the nation. More than 46 percent have at least a bachelor’s degree, up from 31 percent five years ago.

Even much-coveted gains in domestic migration can be misleading economic measures. Reading, Pa. recently reversed a long trend of losing more residents than it gained, largely by attracting sizable numbers of people struggling to live in New York. But in Reading, only 66 percent of the city’s population has a high school degree or higher. In the city of Pittsburgh, it’s more than 92 percent. In Reading, the median household income is $28,755 a year. In Pittsburgh, it’s $44,092. In Reading, nearly 40 percent of the population lives in poverty. In Pittsburgh, the poverty rate is almost half of that, according to 2013-2017 Census data.

Keeping residents is less of an issue for southwestern Pennsylvania than attracting them. Tepid job growth over the past 10 years has been a considerable headwind when it comes to drawing workers from other places. And while the region’s attributes are many, word hasn’t reached large numbers of highly mobile young workers, Russell said.

Low crime, housing that’s more affordable than in many other major cities, increasingly vibrant city neighborhoods and a growing innovation economy are assets that catch the eye of young workers. “Being able to own a house is attractive to some with advanced skills who can’t afford to buy in a growing region where prices have escalated. But you have to get on their map. They go to cities that are on the map for them.”

It’s that appeal that Duolingo, maker of a popular language-learning platform, exploited to lure Silicon Valley talent to Pittsburgh when it leased a billboard along San Francisco’s Highway 101 last year with the simple message, “Own a home. Work in tech. Move to Pittsburgh.”