Economist Paul Krugman weighed in on the Detroit bankruptcy comparing the city to Pittsburgh. Krugman puts Pittsburgh in a flattering light. Worth noting that Pittsburgh's municipal finances are arguably worse off than those of Detroit. That's not the tale of two cities Krugman wants to tell. If he waited a day, he could have pointed to Pittsburgh's remarkably good upward mobility:
The study — based on millions of anonymous earnings records and being released this week by a team of top academic economists — is the first with enough data to compare upward mobility across metropolitan areas. These comparisons provide some of the most powerful evidence so far about the factors that seem to drive people’s chances of rising beyond the station of their birth, including education, family structure and the economic layout of metropolitan areas.
Climbing the income ladder occurs less often in the Southeast and industrial Midwest, the data shows, with the odds notably low in Atlanta, Charlotte, Memphis, Raleigh, Indianapolis, Cincinnati and Columbus. By contrast, some of the highest rates occur in the Northeast, Great Plains and West, including in New York, Boston, Salt Lake City, Pittsburgh, Seattle and large swaths of California and Minnesota. ...
... Yet the parts of this country with the highest mobility rates — like Pittsburgh, Seattle and Salt Lake City — have rates roughly as high as those in Denmark and Norway, two countries at the top of the international mobility rankings. In areas like Atlanta and Memphis, by comparison, upward mobility appears to be substantially lower than in any other rich country, Mr. Chetty said.
Emphasis added. Going from poor to rich is more likely in Pittsburgh than just about anywhere else in the entire United States. That's right, Shittsburgh. Suck it, Sienna Miller.
Pittsburgh is booming. The preliminary jobs data for June are in. The metro hit an all-time high for employment. Pittsburgh's economy is better than ever. The same can't be said about Detroit, which is the tale of two cities that Krugman wants to tell. By my eye, the fortunes start diverging around 2003. Keep that in mind while reading Matthew Yglesias speculating about the reason for the disparity:
Paul Krugman writes about how the much greater degree of job sprawl in the Detroit area compared to the Pittsburgh area contributed to the substantial more severe decline of Detroit's central city, and therefore hurt the region as a whole. Stepping back, though, I suspect you'll find that this job diffusion is largely a consequence of the fact that Pittsburgh is home to two major universities—Carnegie Mellon and the University of Pittsburgh—while Detroit has only Wayne State University, a substantially less prestigious and influential institution. Detroit is fairly close to Ann Arbor, a great little town that hosts the University of Michigan, but that's very much a distinct place.
If you imagine an alternate reality in which the University of Michigan and the neighborhoods around it are tucked somewhere into Detroit and adding their mass to the hospitals and mini-revival area downtown then you'd have a much greater agglomeration in the core of Detroit.
The overall higher education sector in the United States takes a lot of criticism these days, but in part precisely because of the things that make it seem kind of bloated and inefficient it's a very valuable urban amenity. Universities both create little neighborhood-level retail clusters around them, and along with medical facilities become the twin pillars of a regional knowledge-based economy. Of course cities can thrive without necessarily playing host to a prestigious private university or a public university flagship campus (San Antonio, for example) but for lots of older cities hit hard by the macroeconomic trends of the 1970s and 1980s the existence of major universities has provided a foundation for rebuilding.
Suck it, Portland. That said, I would think the divergence between Pittsburgh and Detroit would be apparent well before 2003 if Yglesias is correct. Pittsburgh develops talent. New York City consumes it. Education and then migration promote upward mobility. The macroeconomic trends of the 1970s and 1980s hit Pittsburgh hard. An exodus like no other ensued.
The dramatic brain drain of the 1980s is a testament to Pittsburgh's prowess. The higher the level of educational attainment, the more likely a person is to leave. People didn't abandon metro Detroit like they did metro Pittsburgh. Why? Pittsburgh did a much better job of educating its residents. Thus, Pittsburgh offers much greater upward mobility opportunities. That's the tale of two cities Krugman should have told.