PhillyDeals: Mr. Corbett, do you really want another Gilded Age?

U.S. Steel's Fairless Works in 1983. Steel kept Pennsylvanians employed for a century.
U.S. Steel's Fairless Works in 1983. Steel kept Pennsylvanians employed for a century. (File Photograph)
Posted: December 20, 2011

Gov. Corbett cited "Pennsylvania's Gilded Age, a time of industrial might," with some nostalgia in his remarks Dec. 10 at the Pennsylvania Society's yearly steak dinner for lawmakers, lawyers, lobbyists, and business operatives in the fancy Grand Ballroom of the Waldorf-Astoria Hotel in New York.

It was an appropriate setting. Maybe too appropriate.

The society holds its conclave in New York, as it has since 1899, amid the trappings of the original Gilded Age, when wealthy Pennsylvanians, and the state's finances, were relocating to the nation's metropolis.

The Gilded Age, before income taxes, antitrust prosecutions, and immigration restrictions, was a time of boom-and-bust growth for aggressive upstate timber, coal, and oil operators.

Will trying to replicate that long-ago period really restore Pennsylvania?

The governor and his allies hope their welcome to the natural gas industry will usher in a new Gilded Age, and bring what he called "former Pennsylvanians" home to live in a renewed commonwealth, drawn by lower business taxes and fewer restraints on industry.

As the gas-industry lawyers at my table could tell you, Republican Corbett and his Democratic predecessor, Ed Rendell, have done their best to accommodate the current natural gas boom by opposing a Texas-style gas-extraction tax.

The Republican legislature is also working to ease life for pipeline companies by suppressing local zoning powers, as The Inquirer's Craig McCoy and Joe Tanfani reported last week.

I'm all for cheap gas. But wells and pipelines won't be enough to restart the state economy, which relies too much on insular hospital, school, and tourism jobs and not enough on creative enterprise and big technology-based corporations.

As noted in a recent report by Wells Fargo & Co. - the cosponsor of a substantial pre-Pennsylvania Society dinner gathering at the Metropolitan Club - Pennsylvania's economic growth still lags the national average. Gas has attracted out-of-state drillers, construction workers, and truckers to rural counties. Marcellus Shale has boosted motel rates and helped farmers pay debts with gas royalties.

But it won't do much to change the long-term growth or employment picture, the report concludes, unless it attracts huge investments in gas-dependent industrial plants.

Iron and coal brought steel and railroads, which kept Pennsylvanians working for a century. What will the gas boom bring?

It would be a shame if Pennsylvania is stuck with holes, trenches, and concrete pads while other places get the long-term jobs. Industries are looking to build giant plants to exploit cheap Northeastern gas, but so far they look more likely to put them in Ohio, West Virginia, even Canada, than in Pennsylvania, as my colleague Andrew Maykuth has reported.

Around Philadelphia, we're actually losing good-paying energy jobs as Sunoco Inc. and ConocoPhillips prepare to close or sell their Delaware River refineries, and Exelon, under pressure from clean-air rules, shifts from relatively labor-intensive coal-powered plants to automated natural-gas burners.

Sensing opportunity, Koch Industries' Invista unit, based in Wilmington, held a job fair to lure unemployed Philadelphia energy and chemical workers to its plants.

Readers of Pennsylvania history - see former Inquirer reporter Susan Q. Stranahan's book Susquehanna, River of Dreams - will see a pattern. The lumber, coal, and oil barons of old shipped their dividends to the big cities and left little that has lasted to this day: village names, culm banks, and the cultural institutions of Pittsburgh.

It will be great for the state if Corbett breaks that pattern. Success in drawing new industries with attractive wages would cement his party's control. Failure will make his welcoming nature seem like a big giveaway.

Would-be job-creationists aren't always the most practical guys in the room. A couple of highway lobbyists at a party hosted by Duane Morris L.L.P. at the 21 Club groused that repairs to the state's decaying transportation system have been held up. The reason is a bitter fight between legislators who want union-scale wages for taxpayer-funded jobs and those who say it's best to pay workers as little as possible. Apparently they prefer immigrant labor.

The lobbyists told me contractors aren't demanding these pay cuts. They blamed political market ideologies run to extremes.

The Gilded Age provoked the Progressive reaction, which brought regulation, income taxes, central banking. There's not much evidence of a Pennsylvania reaction so far.

A small group of gas-industry critics sang mock carols at the Waldorf's doors: "Jingle bells, fracking kills, smells like rotten eggs." Speaking from the Waldorf dais in his tux, Corbett was interrupted by a lone balcony heckler: "You're poisoning Pennsylvania!"

I left to catch the night's last train south on federally subsidized Amtrak. It arrived hours late, like an earlier Amtrak train carrying society members north, on what was once the main line of the proud Pennsylvania Railroad, now an emblem of our cash-starved public infrastructure.

But not everyone has to wait for the late train. Agents and patrons of the businesses that live from Pennsylvania resources and Pennsylvania government were looking happy and well-fed - in New York last weekend.


Contact columnist Joseph N. DiStefano at 215-854-5194, JoeD@phillynews.com, or @PhillyJoeD on Twitter.

|
|
|
|
|