Thursday, June 28, 2012

Regulation: Making sure we are protecting the right people

By Matthew DeVeau, Project Associate

As I settle into my new job here at Market Street, I am reminded of the fact that, like some untold number of Americans, I made a career change to get to where I am today. I spent my first few years in the workforce in the communications field (broadly speaking), and have since shifted into the world of community and economic development. Along the way, I acquired some necessary new skills and spent two years earning a Master’s degree and the accompanying pile of student loan debt (enjoy those monthly interest payments, America). But I didn’t have to get a license. The State of Georgia does not regulate my ability to conduct demographic research or develop a Target Business Analysis as a part of my gainful employment. Unfortunately, the same cannot be said for Jestina Clayton of Centerville, Utah.

Clayton was recently featured in an article in The New York Times Magazine as an introduction to the topic of overly burdensome professional licensing requirements. I highly recommend the full article and the related Planet Money podcast from NPR, but I’ve provided a quick summary below.

Clayton, a native of Sierra Leone, had a small business in which she braided hair in the traditional African style. But she soon discovered that she was in violation of a state law that requires anyone who styles hair for money to have a cosmetology license. Acquiring such a license would have required more than a year in school and $16,000 in tuition. She applied for a waiver to the state cosmetology board, but the board – comprised mostly of license holders – denied her request. Clayton opted to close her business.

Clayton was up against a phenomenon known as “regulatory capture,” where business groups influence regulation to their own benefit. In this case, Utah cosmetologists erected a steep barrier to entry to their field to lessen the number of new entrants and funnel more clients to established, licensed cosmetologists. According to the Times Magazine article, such practices are becoming increasingly common – 30 percent of American jobs now require licenses, up from just five percent in 1950.

That’s a problem for would-be career changers, and as University of Chicago lecturer Charles Wheelan points out in the podcast, it could also be trouble for people who move from place to place because regulations differ by state. Indeed, some states would allow Clayton to practice her craft after passing a hygiene test and paying a small fee.

These limits to mobility – both occupational and geographic – add up to a major problem for the economy. Jacob Goldstein, the author of the Times Magazine piece, sums it up nicely:

“Our best shot at creating a decent economy in the future will come from making it easier for workers to shift out of dying careers and into promising ones. Workers need to be able to experiment and to fail (quickly and often) until they find the real, valuable skills that customers will pay for. This will take years. And in order for them to do that, we need to start by making it easier to braid hair in Utah.”

So how do we actually go about doing that? The answer certainly isn’t total deregulation. After all, licensing requirements were originally conceived for an important reason – public safety. As consumers, we want to be certain that our trip to the barber shop or hair salon won’t result in physical harm. We especially want our doctors and airline pilots to be thoroughly vetted.

The solution, it seems, is to determine which regulations protect us from harm and which serve only to protect a narrow special interest – and then eliminate the latter. Of course this isn’t so easy in practice. Parsing that distinction won’t always be easy, and as the Times Magazine article points out, any such changes are frequently met with strong resistance from the affected group of licensed professionals.

But the implementation doesn’t have to be overly complex.

In the case of hair, I think it makes sense to require stylists to pass a rigorous safety examination and pay a fee to cover the government’s administrative costs. Anyone who receives additional training at cosmetology school can advertise as “certified,” and those who don’t must clearly disclose that they are not. This would keep the public protected and informed while allowing people like Jestina Clayton to stay in business.

Such a process won’t be easy, but as someone who has gone through a career change, I believe it’s worth the effort.

Tuesday, June 26, 2012

Chambers of Commerce: Take Notice

By Ellen Cutter, Director of Research.

The Atlantic’s cover story this month exposes the myth that, in fact, women can “have it all” – achieving the highest rungs of career success while balancing a strong commitment to one’s family and relationships. Author Ann-Marie Slaughter, former Dean of Princeton's Woodrow Wilson School of Public and International Affairs and Director of Policy Planning for the U.S. State Department from 2009 – 2011, notes that despite the progress in access to education and employment opportunities, women are simply not making it to the top. Globally, women account for only four percent of heads of state and 13 percent of parliament members. In the corporate sector, women hold only 15 percent of C-level jobs or board positions. So, what gives?
Ms. Slaughter points out only when we have equal representation among the highest ranks of public and private sector leadership will it indicate that we have created a society that works for everyone, men and women. This leadership gap can be explained in many ways, and the subsequent lines of dialog at The Atlantic are fascinating. But the bottom line is that many women find it difficult to own up to their family responsibilities and desires for flexibility in their professional lives at the risk of not fitting in with their company’s culture or coming off as less committed to their careers.

Over and over again, we hear in our work at Market Street that finding qualified, skilled workers is a top concern of employers, regardless of the type of community in which they are located. Women make up half of the workforce, yet the rigid, on-call 24 hour a day culture in corporate America serves as a disincentive to remain engaged in the workforce after starting a family.

This is a huge problem from an economic development perspective. If highly skilled workers are dropping out of the workforce because they cannot square the responsibilities of having a family with those demanded by their career, prudent communities (particularly those facing labor shortage issues) would find it smart to work with their corporate community to promote more family friendly work policies.

Chambers of commerce, take note. This is not about the “Google-ization” of your local workplaces by putting ping pong tables in break rooms, it’s about flexible work hours and arrangements so that workers who are also parents feel that they have a legitimate choice between raising children and working – that they truly can manage both, and do so successfully. Chambers are in the unique position to further this dialog among their community’s leadership and I hope they do.

Thursday, June 21, 2012

Getting the keys to the family car: not as cool as it used to be

By Kathy Young, Director of Operations.

Recently in Atlanta, there has been a good deal (and yet not enough) discussion about the upcoming vote on a regional transportation referendum. The need for the referendum, as is explained by the Untie Atlanta effort, which was organized by the Citizens for Transportation Mobility, is because: "Traffic is choking metro Atlanta. Billions of dollars are wasted in traffic congestion each year, costing the average metro commuter $924 annually in wasted fuel and lost time." The case statement goes further to address the impact on businesses, job creation, and housing values, but as they say, you had me at hello. The issue is by no means a simple one, but as someone who is often stymied by the lack of transportation options, I feel strongly that if we miss this opportunity to work on a true regional scale, then we will be taking a giant leap backwards.

Obviously, as a member of the Market Street team, this opportunity is one that I consider from the lens of holistic economic development planning. So the potential to improve our quality of life, infrastructure, and overall competitiveness is what dominates the referendum discussions I have with friends and colleagues. But on a personal level, I just don't like driving and would really love to spend less time in traffic.

And I know I'm not alone, which almost goes without saying and hardly needs any evidence provided for that statement to be convincing. But I'll provide a little extra information anyway... What's interesting to me is the trends that are coming our way. Young Americans increasingly seem to not only share my preferences, but increasingly, they are actually living out their preferences, which translates to living without cars.

As reported this month in the Kiplinger Letter, a quarter of the driving age population don't have a license. Moreover, a recent University of Michigan study determined that approximately 87 percent of 19-year-olds in 1983 had their licenses, but 25 years later, that percentage had dropped to about 75 percent, which is comparable to rate changes for all teen age groups.

Our future workforce is telling us they don't want to drive, and yet most communities (including Atlanta) have few transportation alternatives. Clearly the winners will be the communities that proactively plan for better options. I hope Atlanta is on that list.

Monday, June 18, 2012

Trees, Box Fans, Urban Prosperity, and Other Ruminations from Indiana

By Ellen Cutter, Director of Research.

My husband is from Minnesota. He’s the guy who rarely wears a coat in the winter time while the rest of us pile on layer after layer. Having bought a 100-year-old house in Indiana, 600 miles southwest of his old stomping grounds, he spends hot summer days debating whether or not to turn on the AC. And, because he’s Midwestern (meaning “practical” to the point of being impractical sometimes), he usually talks himself out of using the AC in favor of rigging a Rube Goldberg-esque system of fans, extension cords, screens, and windows propped open with books all the while mumbling about the all-important concepts of shade and air-flow.

When we moved in last July during the hottest weekend on record, EVER, in the state of Indiana, we made two immediate investments: window treatments and trees. Located in a revitalizing area in Fort Wayne, our home had sat vacant for about seven years. It did not have a single set of blinds up and had only one small tree on its lot. With each window in our house painfully exposed, on 90 degree + days it felt like we were bugs slowly heated to death under a kid’s magnifying glass. Looking around the neighborhood, we realized that most of our neighbors had at least a dozen trees on their similarly sized lots. Our lot was bald and our home remained one of the last vacant homes in our neighborhood. Coincidence?

Let’s turn to the Per Square Mile blog for some answers. Last month, blogger Tim De Chant discussed the correlation between income and tree cover in cities. De Chant references a 2008 study from the journal Landscape and Urban Planning, noting the researchers found that “for every 1 percent increase in per capita income, demand for forest cover increased by 1.76 percent. But when income dropped by the same amount, demand decreased by 1.26 percent.” He continues, “That’s a pretty tight correlation. The researchers reason that wealthier cities can afford more trees, both on private and public property. The well-to-do can afford larger lots, which in turn can support more trees. On the public side, cities with larger tax bases can afford to plant and maintain more trees.” Makes sense.

In a follow up blog, De Chant visually shows us this correlation between income and tree cover by contrasting neighborhood in various global cities. The results are fascinating. De Chant uses a beautifully simple technique, side-by-side Google Earth satellite images, to compare tree cover in high and low income neighborhoods in Rio de Janeiro, Oakland, Houston, Chicago, Beijing, and Boston. In my hometown, the Hyde Park neighborhood (home to University of Chicago and the Obamas) is a lush bled-together grid of trees while the Woodlawn neighborhood, an area known for crime and disinvestment located only a few blocks south, is sporadically measled with tree tops. It can be easy to roll our eyes at the feel-goodery of those who take up trees as their charge when there are *real* urban problems. But the fact of the matter remains that trees are correlated with neighborhood income, property values, and crime. Trees are overwhelmingly a worthwhile investment for homeowners and cities.

For what it’s worth, over the last year we’ve planted an oak, birch, ornamental pear, red oak, and blue spruce. That is five new trees on only 0.15 acres of land. That signals investment in our community, which is a good thing for the neighborhood. And, our house already feels a bit cooler this summer, which is a good thing for this woman and her live-in Minnesotan.  

Thursday, June 14, 2012

Selling American (postsecondary) Education Abroad

By Stephanie Allen, Project Assistant.

For a decade now, students in Qatar have been flocking to Education City on the outskirts of Doha to attend branches of elite American colleges. Students complete the same coursework required of students at the main campus to obtain their degree (that includes courses in Texas history at Texas A&M). Yes, instruction is in English. And, yes, classes are coed, just like at the flagship schools in the states.

The US has traditionally been a huge exporter of college graduates, with the best and brightest students from all over the world flocking to American colleges and universities intent on getting an American education and taking it back home. New programs like those in Education City offer something a bit different: an American degree and an American education without ever setting foot on American soil.

At Education City engineering degrees are offered by Texas A&M, journalism degrees by Northwestern, medical degrees by Cornell, computer and business degrees by Carnegie Mellon, art and design degrees by Virginia Commonwealth University, and foreign service degrees by Georgetown.

And, Education City isn’t the only example either. NYU opened a branch in Abu Dhabi in 2010 (a full-fledged four-year liberal arts research university) and Michigan State briefly ran a branch in Dubai. Despite cultural differences governments in the Persian Gulf are committed to making American liberal arts educations more widely available. They’re footing the bill for establishing these branches, building state-of-the-art research facilities, funding faculty salaries, and they’re donating large sums of money to the flagship institutions to boot (Cornell’s medical school is reportedly receiving $750 million over 11 years and NYU reportedly received a $50 million donation up front).

Now, there’s a new kid on the block in Doha: Community College of Qatar. Modeled after and staffed by Houston Community College, the Community College of Qatar is the country’s first community college. HCC set up the program, got it up and running and will provide faculty and staff under a 5-year, $45 million contract. All expenses are paid by the Qatari government and on top of that HCC will reportedly get a 10% fee for its services.

There are some who say that these programs are just cash cows for American colleges and universities. Like Representative Dana Rohrabacher, a California Republican, who was quoted in the New York Times as saying “A lot of these educators are trying to present themselves as benevolent and altruistic, when in reality, their programs are aimed at making money.” Mary Spangler, chancellor of Houston Community College, came out and said as much to the Times: “Instead of giving away our expertise, we’re making money from it.”

It’s always been one of our most valuable exports, why shouldn’t we make money on it? These are non-profit institutions we’re talking about. That money they’re making selling their expertise abroad will theoretically be spent keeping tuition down, funding more faculty, more research, more scholarships, more state-of-the-art facilities here at home. And with colleges and universities facing tough economic times too, an influx of cash could go a long way towards ensuring that American colleges and universities remain among the most highly regarded in the world.

If only we could be as proud of our primary and secondary schools… alas, that’s a topic for another blog post (see Mac’s post on Tuesday for sad news of metro Atlanta’s primary and secondary school systems).

…But, if you’re interested, Notre Dame philosopher Gary Gutting shared his opinion on how we might remake our flailing primary and secondary school systems over in the image of our world renowned postsecondary institutions last week in the Times’ blog The Stone.

Tuesday, June 12, 2012

What Are We Doing?

By J. Mac Holladay, Founder and CEO.

Last week as I flew back from Kansas City, I read USA Today as I often do on the road. I always review the “News from every state” to see what I can catch up on or to find a little piece of trivia about a client community. This time, however, the brief report from my state, from Georgia, stopped me completely.

Here is what it reported. The Atlanta public schools will cut 375 teachers, Gwinnett County schools 600, and Cobb County schools 350. Each will also add furlough days. So my question is: what are we doing? Every study tells us that smaller classes and great teachers are the number one factor in quality education and stronger attainment. So where is the outrage? Why is the business community in Metro Atlanta just sitting there instead of asking for revenue enhancement?

The State of Georgia , after years of working to improve our schools, has cut $2 billion from  the pre K- 12 education system over the last 5 years. So this is a state policy and local policy question. The number one issue today and tomorrow in economic development is the quality of the workforce. We cannot cut our way to prosperity. Quality and results have a cost. Yes, we should and must demand accountability, but we also must provide adequate resources. No one believes these huge cuts are helping our children.

The Great Recession has changed the world of economic development. The Atlanta region has suffered greatly and many of its economic drivers from banking to construction have taken huge hits. The jobs of the future will require more education not less. A high school graduate with solid basic skills is the beginning not the end.

Everyone in the community and economic development world needs to ask hard questions about the massive cuts to education across the country. Some say we can’t afford to restore the funding, my reading is the opposite. We cannot afford not to enhance our support for what will determine our future as a global competitor.

Thursday, June 7, 2012

There Will Be Graphs; Part Two of a Series

By: Evan D. Robertson, Project Assistant.

In my last blog, I introduced social network analysis as a tool for better understanding your local economy and visualizing data in new ways. For the second installment, social network analysis (SNA) will be used to analyze Occupational Employment Statistics published by the Bureau of Labor Statistics. While the following data is decidedly not a social network, it does demonstrate the use of SNA as a tool for visualization.

A brief note on methodology. The Bureau of Labor Statistics defines each two-digit NAICS sector by the occupations that compose it at the national level. The following supposes that the definitions act as a connection between an occupation and the twenty two-digit NAICS sectors, allowing the use of network analysis to analyze the relationships between occupations and business sectors.

The problem: Suppose you are a college freshman who is a little distracted. Things catch your interest but you tire after a given subject after a few years. You’re at your guidance counselor’s office attempting to choose a career path (for the sake of the blog lets define career path as an occupation). Now, you’re fairly certain that whatever occupation you choose you’ll want to work in a variety of sectors throughout your professional career rather than being stuck in, say, healthcare till retirement. By using social network analysis, we can identify which occupations share overlap with the most sectors thereby giving you a list of occupations from which to choose.

The above graph is the preliminary result of the occupational network analysis. At first: chaos. However, with the help of a little highlighting, the semblance of a pattern emerges. The yellow dots (called vertices) represent the twenty NAICS sectors. The gray lines (edges) represent a connection between an occupation and a business sector. Thus, the edges are nothing more than a graphical representation of the BLS’s occupation by industry definitions. Near the center of the graph, proximate to the yellow vertices, are orange vertices which represent the most connected occupations. That is to say, these occupations appear on each of the twenty two-digit sectors. In contrast, the red dots at the graph’s periphery are those least connected, or rather those that share only a single sector in common. For organizations sake, let us group the occupations by their respective occupational categories.

The above graph displays the exact same information as the first graph, only that the vertices are now grouped by their respective major occupational groups. The black dots to the lower right hand center represent the twenty NAICS sectors. Each of the other symbols represents a single occupation.

Now with the housekeeping out of the way, let’s revisit the college student. Now, you’d like to know which occupations are connected to the most number of sectors in hopes that you can hop around to different sectors throughout your career.

The above graph filters out all of the occupations that appear in 19 or less sectors of the economy, leaving only those occupations that appear in all business sectors. Now, which occupation should you choose? You should undoubtedly be a chief executive. They are connected to all twenty sectors and make bank, to the tune of $166,910 a year (annual median wage). Jesting aside, the list of occupations is quite revealing and may signal (as the title of the graph alludes to) those occupations which are more resilient than other occupations assuming, of course, that we define resilience as any occupation in which an individual can transition from one sector of the economy to another. This is easier said than done since many sectors require specialized skills that are pertinent solely to that sector. The chief executive of an IT firm may not have the skills or tacit knowledge required to manage a chemical company.

The list of resilient occupations, however, is revealing. The majority of the “resilient” occupations serve office and administrative support functions followed by sales and related occupations, transportation and material moving, management, and business and financial operations. More specifically are occupations you’d probably guess right off the bat: accountants and auditors; database administrators; bookkeeping, accounting, and auditing clerks; and general maintenance and repair workers. Of course, these occupations may, or may not prove to be resilient as technology evolves, labor market dynamics shift, or larger structural shifts occur throughout all industry sectors. But, for you the college student, any of these occupations would potentially allow you to shift between sectors during your career, provided you learn the specific skills necessary to succeed in a new business sector. Finally, you can filter the edges displaying career paths whose average annual wage is $55,000 or more.

Now, along with a list of “resilient” occupations, we can also develop a list of occupations that are less resilient. These occupations are dependent on a single sector of the economy.

These occupations are potentially susceptible to shocks. If the sector were to suddenly vanish, than the worker would certainly require retraining or be forced to leave the labor market. As displayed in the graph, the least resilient occupations are education, training, and library occupations and, specifically, post-secondary educators. Admittedly, this deserves a bit of a laugh considering the unquestioning importance we place on educational attainment. However, given the diminishing affordability of higher education and state budget cuts, educators are not immune to layoffs. Other less resilient occupations include: farm labor contractors, orthodontists, fish and game wardens, post office clerks, mine cutting and channeling machine operators, shoe machine operators and tenders, and, interestingly, embalmers, among others.

Social network analysis, or in this case, network analysis has allowed us to organize occupational employment data in such a way as to obtain a general sense of the resiliency of occupations in the national economy. Combined with more qualitative data along with perhaps survey data, network analysis could allow practitioners to identify commonalities between different occupational categories and economic sectors. So, if say your community has a large displaced worker population, you may easier assess which sectors the displaced worker could transition their skills. Once again, it requires a qualitative component, but as a tool for visualizing and organizing these connections, network analysis will serve you well.