Tag Archives: jobs

Gown Towns Thrive

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Yesterday I was in a meeting with several people involved with local real estate development and they were asked what the top business priority is for their county (Guilford, NC) going into 2017. Their response, as has been the case for every year in recent memory, was that job growth will continue to be the most critical issue for their businesses. In the course of answering the question quite a few of these people referenced other cities in North Carolina that seem to be thriving – Raleigh, Cary, Charlotte and “even Wilmington” – were the names I remembered. What stuck out, to me, was that no one mentioned Winston-Salem.

Now let me state up front that I’m not prepared to offer any statistics that compare the jobs situation in Winston-Salem to those in Guilford County’s two cities, Greensboro and High Point. But I will say that if you were to poll most people who pay attention to business in the region, they will tell you that Winston-Salem’s economic recovery from the nuclear annihilation that has befallen this region’s traditional economy is further along than its neighbors to the east. For some reason, though, leaders in Greensboro and High Point seem to ignore what’s going on just 30 miles to their west (and in all fairness the reverse is also true), and as a result no one seems to know why there’s a difference between these two very similar neighbors.

A personal theory is that there are a lot of complex and interwoven factors at play here, but one big one is the presence of Wake Forest University in Winston-Salem. The university, and in particular it’s medical school, has been a partner with the city and local companies as the city moved away from it’s traditional tobacco manufacturing base toward a “knowledge economy” with a niche in the area of medical research. Starting over 20 years ago Winston-Salem’s civic and business leaders recognized the need to re-position the city’s economy and Wake Forest played a significant role in those plans. The results are plain to see in the city’s Innovation Quarter, which is booming and is primed for exponential growth over the next 10-15 years.

30 miles to the east Greensboro actually has more schools, including NC A&T and UNCG, but they don’t seem to have had the same effect on the city’s economy. Yet. We’re starting to see much more activity there, including the Union Square Campus that recently opened and is already bearing economic fruit for the city and there’s PLENTY of potential for even more growth. As long as the city’s leaders continue to keep their eye on the ball there’s a very good chance this will happen, as it has in other college towns.

This article in the Wall Street Journal has a lot of data showing how cities in the US that have strong colleges, especially those with research programs, have recovered from the decline in the manufacturing sector over the last two decades. Here’s an excerpt:

A nationwide study by the Brookings Institution for The Wall Street Journal found 16 geographic areas where overall job growth was strong, even though manufacturing employment fell more sharply in those places from 2000 to 2014 than in the U.S. as a whole…

“Better educated places with colleges tend to be more productive and more able to shift out of declining industries into growing ones,” says Mark Muro, a Brookings urban specialist. “Ultimately, cities survive by continually adapting their economies to new technologies, and colleges are central to that.”…

Universities boost more than just highly educated people, says Enrico Moretti, an economics professor at the University of California at Berkeley. The incomes of high-school dropouts in college towns increase by a bigger percentage than those of college graduates over time because demand rises sharply for restaurant workers, construction crews and other less-skilled jobs, he says.

And here’s the money quote as it relates to local economic development efforts:

Places where academics work closely with local employers and development officials can especially benefit. “Universities produce knowledge, and if they have professors who are into patenting and research, it’s like having a ready base of entrepreneurs in the area,” says Harvard University economist Edward Glaeser.

Let’s hope our local leaders take full advantage of what our colleges have to offer, for all of our benefit.

The Changing American Jobs Landscape and What It Might Mean for Men

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The Atlantic Monthly has a fascinating look at how the jobs picture has changed in America since 1977. Why that date? Because that’s the last time our labor-participation rates were as low as they are today. From the article:

A couple things jump out here: Even though the labor-participation rate is almost as low now as it was then, the workforce has grown faster than the population (which was 220 million then and is around 319 million now). The big jump is in the number of women employed—from 36.5 million in October 1977 to 54.1 now. Male employment has also climbed, but not as much. So as the female labor-force participation rate has climbed, the male rate has dropped, from eight in 10 to barely seven in 10 men working full time. And whereas the male unemployment rate was much lower in 1977, now there’s gender parity.

Even as the gender balance has shifted, it’s noticeable that the racial balance hasn’t. Now, as in 1977, the black unemployment rate is much higher than the national rate, and lags far behind white unemployment.

This isn’t all just evidence of a bad economy—much of the decline comes from Baby Boomers reaching retirement age and checking out, though some of it comes from would-be workers who simply can’t find work, and millions more Americans are underemployed. That isn’t without challenges: An aging population could draw more in benefits than the government collects in social-security taxes. Massive spending on health care for older Americans could be a drag, too.

There’s more to read at the site, in particular what Americans were doing for work back then versus today, but I find the role of women in the workforce to be most interesting. With more women now graduating college than men how many households of the future will see a reverse of the traditional roles of breadwinner (men) versus secondary income/homemaker (women)? We’ve already seen a huge shift in household composition away from the traditional roles  – more dual income homes, single parent homes, women as primary breadwinners, etc. – but it seems clear that the shift will continue over the next generation. What will the impact be on our society?

We’ve already lived through a generation of women struggling to balance work and home life, to face the never-ending tension of career versus kids, but we’re about to be confronted with men having to confront a similar situation over the next generation. The reality that men’s traditional role as primary breadwinners or “heads of household”, at least according to our societal norms, is beginning to dawn on America. Over the next generation the big question is going to be how men will handle being the secondary earner and likely primary caregiver to their children? How will society, especially other men, react to them and treat them when they do? I suspect they will go through many tumultuous days trying to find the right balance, just as many women have for years, and it’s often going to be ugly. Can they do it? You bet, but it’s going to be a painful process as they learn to do it.

*Update*
This Planet Money post also highlights what’s going on:

The share of marriages where women work full time but men don’t is highest for low-income families.

The story here has as much to do with the decline of working men as it does the progress of women in the economy. In just the 10 years between 2000 and 2010, the manufacturing sector lost an astounding 5 million jobs. Since manufacturing jobs historically have been held predominantly by men, this left lots of men out of work. Women, on the other hand, have benefited from the employment boom in the service sector, which employs more women than men.

High-income families are much more likely than average to have both spouses working full time. The message is pretty clear: It’s pretty hard to be rich with only one income.

34 of 100 Don’t Work for the Man

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It’s no secret that today many more people in our economy are freelancers than in the past, but would you believe that the number is about 53 million people?

I was on the phone last night with Stephen DeWitt, the CEO of our portfolio company Work Market. He was talking about a specific community of people and I asked him how many of them were likely to be freelancers. He said “well the statistics say that 3 to 4 out of every ten people these days are freelancers.”

I thought that sounded high but after reading Mary Meeker’s Internet Trends Report, in which she says that “34 percent of the work force in the United States, 53 million people, now consider themselves independent contractors, short-term hires or other kinds of freelancers”, I think Stephen has it exactly right.

Look around you on the subway, the baseball park, the movie theater, 3 to 4 out of every ten people are freelancers. That’s a big number. And its growing pretty rapidly. Younger people are more inclined to be freelancers. Older people turn to freelancing for flexibility or economic necessity. And employers are more inclined to hire freelancers as technology makes the management and compliance requirements around freelancers easier to handle.

This has me wondering about the implications for things like benefits. I’m not sure about this, but I don’t think that freelancers qualify for unemployment benefits since they are typically tied to the company you worked for. If you don’t work for anyone how would you qualify for benefits? It also feels like we’ve already seen the impact on health insurance – it’s a safe bet that a good chunk of the uninsured are freelancers who don’t have companies to provide insurance. Even if the ACA is pushing many of them to buy their own insurance, they were an available market precisely because they didn’t have company-provided health insurance.

The excerpt above came from Fred Wilson’s blog and I agree with his last paragraph from that post:

It’s a new era we are living in and the nature of work is changing and changing fast. There are tons of opportunities in and around this trend and we are invested in some of them. It’s one of the big megatrends of this century.

Jobs and Money

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Why are jobs important? Well, beyond the obvious there’s the added benefit that it helps keep people out of trouble. From the May, 2015 issue of Rotarian Magazine:

Summer jobs can help prevent violence among disadvantaged students, according to a large-scale trial out of the University of Pennsylvania and the University of Chicago Crime Lab. The study involved 1,634 teenagers from 13 high-crime schools in Chicago, and a local program that places youth in part-time paid summer jobs and pairs them with mentors. The job-assignment intervention reduced violence by 43 percent over 16 months, with nearly four fewer violent-crime arrests per 100 students compared with the control group.

From the same issue of the magazine comes this little tidbit of info:

One percent of the global population owns nearly half the world’s wealth, according to a new report from Oxfam, and that share is expected to exceed 50 percent within two years. The richest 20 percent of the population owns most of the other half of the world’s resources, and the remaining 80 percent of people share just 5.5 percent. The combined wealth of the 80 richest individuals in the world has doubled since 2009, and surpasses the combined wealth of the 3.5 billion people in the bottom half.

Free Job Advice for Youngsters

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Here's a blog post from Jessica Gottlieb with some great job advice for Millenials, including:

  • Your first job will probably be a crappy job. Don’t wait until you’re 20-something to have that first job. Working is good for you, even when it’s not fun. 
  • No one owes you a job, you’re replaceable so it’s up to you to be better than everyone else (this advice holds true until you’re 75 or so)
  • If you work in a service industry tips should feel like silver and gold raindrops. No one is obligated to give them to you. Customers can sniff out entitlement.

To this I'll add:

  • Be on time.
  • Watch your language. Not just cursing, but grammar. You don't necessarily need to know when to use "who" or "whom", but at least know that you shouldn't say "I'm doing good" when you're asked how you're doing.
  • Dress appropriately and accept that it is perfectly reasonable for your boss to define what is appropriate.
  • Use a firm handshake when you greet people, but don't try to break their knuckles. Also, unless someone's your friend don't give them a hug/bro-hug.
  • This is for guys: shave every day even if you don't think you need it. Believe me, you do. If you have a beard, keep it trimmed and shave where appropriate every day.
  • Flirt at your own risk. It can backfire on you in a big way.

There's plenty more where that came from; things I was once taught and that have never really changed.

Side note: you millenials are exactly where we Generation X/Y, Baby Boomers were at your age. The generations that preceded us thought we were slackers/losers/lost causes too.

The Rise of 14th Street

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As a teen growing up in Northern Virginia in the early 80s I'd venture downtown with some of my buddies to witness firsthand the depravity that was on display on 14th Street. I really was too stupid to realize how dangerous it was to go down there to park and watch hookers pick up johns, dealers sell their weed/coke/whatever and pimps managing their "personnel." To me and my buddies it was like going to live theater, except that when we saw the inevitable beatings, assaults and brawls and realized that the blood that was spilled and the bullets that flew were very real, we retreated to our suburbs and ventured downtown only to visit the clubs in Georgetown or Foggy Bottom.

It's from that perspective that I read this article in the Washington Post about the gentrification of the 14th St. corridor.  Whether or not you're a fan of gentrification you have to be amazed at how a city can literally be transformed.

The formerly riot-scarred corridor has gone into gentrification overdrive, a boom fueled by investors looking for a safe place to park hundreds of millions of dollars, the relative ease of obtaining a liquor license, and the arrival of thousands of new residents longing to live downtown.

The result: more than 1,200 condos and apartments and 100,000 square feet of retail are being built or have hit the market in just the past nine months. At the same time, at least 25 bars and restaurants have opened or are under construction along 14th Street, adding more than 2,000 seats to the city’s dining scene at warp speed…

The street’s renaissance began decades ago, with the establishment of Studio Theatre (founded in 1978 and expanded in 1987) and other performing arts venues. But the pace of change accelerated after a successful community lobbying effort to lure Whole Foods Market to P Street, between 14th and 15th streets. A steady progression of improvements followed, with carryouts, auto repair garages and pawnshops giving way to sit-down Thai restaurants, fitness studios and window displays of $5,000 sectional sofas.

This next part interested me from a professional standpoint since I work for an apartment trade association:

Veteran commercial real estate broker Andrew McAllister, who has done $1 billion worth of business along 14th, likened the District’s post-recession situation to last call on a Friday night.

Were we the “best-looking chick? We were the only chick at the bar,” he said.

Washington quickly found itself at the center of a national apartment building boom, spurred by the transformation of millions of former homeowners and would-be home buyers into renters. Many of them experienced unemployment or had their credit ratings decimated by foreclosure. Others couldn’t muster the bigger down payments required to obtain mortgage loans.

Washington’s status as an oasis of job security, in particular, made it one of the nation’s top destinations for the young, highly educated and affluent, putting the city on track to drawmore newcomers between 2009 and 2011 than it had during the previous decade.

A note for our folks here in the Triad: notice how important jobs were to the revitalization of downtown Washington? Our small cities are doing a great job focusing on the redevelopment of their downtowns, but until we get significant job growth it will be hard for our cities to really take off.

The Incredible Shrinking Middle

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One of the underexplored aspects of the current unemployment situation in North Carolina is the movement of people from adequate paying jobs to under paying jobs. A study by the NC Justice Center makes it vividly clear:

The nonprofit group determined there were 356,000 more working-age adults employed in the state in 2001 than in 2010, with manufacturing taking the brunt of the job decline.

The state lost 380,000 jobs in that period, with about 75 percent concentrated in industries with average hourly wages that enabled individuals and families to stay above the living income standard. A family of four needed to earn at least $23.47 an hour in 2010 to have enough money to meet basic expenses, according to N.C. state government standards.

The state's manufacturing workforce, which paid an average of $25.30 an hour, fell by 38 percent during the 10-year period. Manufacturing accounted for 72 percent of the state's job losses…

Where North Carolina did have job growth, it mostly came in low-wage industry sectors, the group said. About 83 percent of the job growth came with average wages of less than the $23.47-an-hour living income standard for a family of four.

For example, 15 percent of the state's job growth from 2001 to 2010 came in the food-services and accommodation sectors, which paid $7.15 an hour.

The state's median household income dropped 9.4 percent during the decade, or from $47,823 in 2001 to $43,326 in 2010.

The center found the number of North Carolinians living in poverty – $22,314 annual income for a family of four – rose by 24.1 percent during the decade.

In a nutshell the middle class is shrinking, and not from upward mobility. You would think that would lead to an outcry against the "corporate class," but outside of a little wrist-slapping at the height of the economic meltdown it just hasn't happened. That's what makes this interview of Mike Lofgren by Bill Moyers so easy to believe (h/t Fec for the link). For those of you expecting an anti-Republican screed you'll be disappointed – he basically argues that both parties have been captured by the corporate class. Enjoy:

Capitalism and Its Discontents

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This is a very interesting interview with economist Richard Wolff (h/t to Ed Cone for the link).  A couple of excerpts provided below, but I highly recommend reading the whole thing.

Barsamian: There’s a certain market fundamentalism in the U.S. that equates capitalism with freedom.

Wolff: Yes, employers are free, in this system, to stop raising workers’ wages. But their exercise of that freedom has deprived the mass of Americans of a rising standard of living to accompany their rising productivity. Employers have kept all the benefits of the productivity increase in the form of profits. So one sector of our free economy has deprived another sector of its due. It’s the paradox of a democratic society: the freedoms of one group limit the freedoms of another. To face this fact requires a more critical notion of freedom and democracy than the happy, cheerleader mentality we have today.

How do you talk about freedom to the 20 to 30 million Americans who currently have no job? Are they free? They’ve been denied a living through no fault of their own. When 20 million Americans suddenly can’t find jobs, that isn’t a problem of individuals being lazy. That’s the problem of an economic system that isn’t delivering the goods…

Barsamian: You mentioned earlier that, although wages became stagnant in the 1970s, American workers continued to become more productive. So someone has benefited from the past thirty years.

Wolff: Yes, it’s been the best thirty years that employers in this country have ever had. More product was being produced, but employers didn’t have to pay workers more. This was impossible before the 1970s, because the labor shortage meant employers had to keep paying more, which is why we had that wonderful growth period from 1820 to 1970.

So after the 1970s profits went through the roof. What I find funny — because I don’t want to cry — is the story the business community told about these profits. They probably knew they were getting the benefit of stagnant wages and rising productivity, but they developed a kind of folklore that said the reason profits were so big in the 1980s and 1990s was that executives were geniuses. We made folk heroes of Lee Iacocca at Chrysler and Jack Welch at General Electric. They became icons, as if some mystical ability of theirs accounted for the profits.

Every economist who looks at the numbers knows executives didn’t suddenly become geniuses — as if they’d been dumb before. Shifts in the economy enabled them to stop raising workers’ wages yet keep getting more out of them. No mystery there. Of course, there was a reason for this fairy tale about ceos: if the executives could convince everyone that they were responsible for the profit increase, then they could demand higher salaries. 

 

Forget Being Outsourced, We’re Being Siliconsourced

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An interesting take on disappearing jobs:

…digital technologies are rapidly encroaching on skills that used to belong to humans alone. This phenomenon is both broad and deep, and has profound economic implications. Many of these implications are positive; digital innovation increases productivity, reduces prices (sometimes to zero), and grows the overall economic pie.

But digital innovation has also changed how the economic pie is distributed, and here the news is not good for the median worker. As technology races ahead, it can leave many people behind. Workers whose skills have been mastered by computers have less to offer the job market, and see their wages and prospects shrink. Entrepreneurial business models, new organizational structures and different institutions are needed to ensure that the average worker is not left behind by cutting-edge machines.

Found via Cone.