Kyler Kantz

March 13, 2022

Looking at Pittsburgh’s skyline, one name shines above all the others: UPMC. The University of Pittsburgh Medical Center building is the Steel City’s beacon and one of the most recognizable buildings in the city. However, before it was given the UPMC name, it was the United States Steel Building. This simple name swap signifies the change that Pittsburgh’s main industries undertook. The steel industry collapsed; the healthcare industry took its place, and what has this change brought to Pittsburgh and its surrounding areas? Despite UPMC’s prominence in the city, poor labor conditions and even worse business practices evoke memories of the steel magnates of old. Policies must be implemented to prevent UPMC from abusing its power and protect hospital employees and Pennsylvania citizens alike.

Currently, Pittsburgh’s UPMC is one of Pennsylvania’s largest employers, with over 92,000 workers.[1] It has relentlessly expanded into a health-network powerhouse, with 40 hospitals in the United States and an international presence in Italy, Ireland, China, and Kazakhstan.[2] In western Pennsylvania, 45,000 people are employed in hospitals through UPMC or the Allegheny Health Network. Out of these 45,000, three out of every four are UPMC employees.[3] On top of this, 93 percent of Pittsburgh hospital workers consider leaving their jobs once or more a month.[4] Increasingly stressful conditions are caused by declining labor conditions and long hours imposed by the hospital system. In their account published by the American Economic Liberties Project, Congresswoman Summer Lee and Representative Sara Innamorato report on the conditions these employees work in and make the claim that Pittsburgh remains a company town under UPMC.[5]

What is a company town, and why does this report make this claim? Going back a step, we can look to Pittsburgh’s origins, when the steel industry reigned. Before Andrew Carnegie opened his first steel mill in the 1870s, Pittsburgh’s population was 86,076 inhabitants.[6] In the following decades, it would explode to 533,905 people.[7] The steel industry became the economic backbone to provide for this population. There was no diversification of jobs in the region; steel mills and start-ups provided the economic makeup of Pittsburgh. Areas like Homestead were company towns, where the steel industry owned individual homes and housed their workers; the industry’s grasp was inescapable. With the benefit of hindsight, one can draw comparisons from the UPMC today to the early days of steel. It is Pittsburgh’s largest employer, it controls the flow of the labor market, and it has the power to set the going rate for the jobs it provides. It does all of this with little to no restriction from the federal, state, or local governments.

What can be done to lessen the grip that UPMC has on Pittsburgh? Relying on a single industry hasn’t worked in Pittsburgh before and allowing another company to do the same as the steel magnates would ignore the area’s history and makes the city’s inhabitants vulnerable. Turning to Representative Innamorato and Congresswoman Lee, we can see a vision in which the region can move forward without the threat of a single industry having complete domination. These two lawmakers have laid out several policy recommendations that can be enacted at the local, state, and federal levels.

At a local level, hospital worker unions are identified as a group crucially needing support.[8] Protecting workers’ rights is paramount to reforming how this industry functions. The lawmakers remind us of the steel industry and how workers collectively fought for higher wages and better working conditions.[9] UPMC has faced accusations by employees that in the past, efforts to unionize were squashed and appeals to the National Labor Relations Board have not always been accepted.[10] Innamorato and Lee look to local and state legislators to advocate for these workers’ rights.

Another solution is for Pennsylvania lawmakers can also petition the IRS to revoke UPMC’s tax-exempt status.[11] At the State level, UPMC’s tax-exempt status is questioned because in 2022, UPMC generated $24.1 billion in operating revenue. UPMC operates as a charity on paper, but on a list ranking charitable spending by hospital systems in the United States, UPMC ranks in the bottom third.[12] Adjusted for proportional amounts of various tax exemptions received, UPMC’s charitable giving ranking is the fifth worst in the nation.[13] The bottom line is that UPMC receives far more from taxpayers than it gives to the community. To remedy this, lawmakers can change UPMC’s status and force it to pay its fair share in taxes and truly give back to the community it thrives off. Lee and Innamorato propose, as an initial step, pushing the Department of the Auditor to investigate whether “UPMC is complying with state law and issue recommendations for remedying any deficiencies.”[14] An example of a possible remedy would be providing a certain level of uncompensated health care or practicing better labor practices.[15]

The action that lawmakers must take cannot be half measures. Pittsburgh, Allegheny County, and Western PA have already experienced an industry’s slow loss, and the need to diversify the region’s economy with jobs protected against corporate greed is a must. Allowing UPMC to dominate the area and take hold of its labor force would be ignorant of Pittsburgh’s history. As we all know, history often repeats itself, but this time, we have the opportunity to change it.

---

Image via Pexels Free Photos

[1] Innamorato, Sara, and Summer Lee . Critical Condition: How UPMC’s Monopoly Power Harms Workers and Patients. Economic Liberties, January 2023. https://www.economicliberties.us/our-work/critical-condition-how-upmcs-monopoly-power-harms-workers-and-patients/.

[2] Innamorato; Lee, Critical Condition, pg. 4.

[3] Innamorato; Lee, Critical Condition, pg. 4.

[4] Innamorato; Lee, Critical Condition, pg. 1.

[5] Innamorato; Lee, Critical Condition, pg. 4.

[6] Dietrich, William S. “A Very Short History of Pittsburgh.” Pittsburgh Quarterly, September 9, 2020. https://pittsburghquarterly.com/articles/a-very-brief-history-of-pittsburgh/.

[7] Dietrich, William S., A Very Short History of Pittsburgh.

[8] Innamorato; Lee, Critical Condition, pg. 13.

[9] Innamorato; Lee, Critical Condition, pg. 13.

[10] Innamorato; Lee, Critical Condition, pg. 13.

[11] Innamorato; Lee, Critical Condition, pg. 16.

[12] Innamorato; Lee, Critical Condition, pg. 15.

[13] Innamorato; Lee, Critical Condition, pg. 15.

[14] Innamorato; Lee, Critical Condition, pg. 15.

[15] Innamorato; Lee, Critical Condition, pg. 13.