Thursday, July 31, 2014

50 years after Freedom Summer, where are we?

By Ranada Robinson, Research Manager. 

Summer is winding down, and it’s been a huge season for remembering the tumultuous Civil Rights Era. This year marked the 50th anniversary of Freedom Summer, during which hundreds of civil rights workers and students from across the nation traveled to Mississippi to help local civil rights workers and volunteers attempt to register black voters and set up Freedom Schools and community centers to help black citizens. At that time, it was extremely difficult and dangerous for blacks in Mississippi to register to vote. Additionally, it was a rough time in the South due to Jim Crow laws that mandated racial segregation in all public facilities, including schools and public transportation. These laws also ensured employment and educational discrimination and other economic disadvantages that have had long lasting effects. Freedom Summer brought together volunteers from various backgrounds to try to make a difference. It became a pivotal moment of history for the Civil Rights Movement, with many sad stories of sacrifices made for the hope for racial equality.

Earlier this summer, I had the pleasure of hosting a mini-film screening at my alma mater, Tougaloo College, which was instrumental during the Civil Rights Movement and during Freedom Summer. The film, An Ordinary Hero: The True Story of Joan Trumpauer Mulholland, highlights the life of a Civil Rights hero—a young white woman—who
Image Source: Jackson Daily News
participated in over three dozen sit-ins and protests by the time she turned 19 years old. It was a perfect time for this event because Joan was on campus celebrating her golden graduation anniversary along with several of her classmates, all with amazing stories. The film is a must-see and really shines a light on many infamous moments during the Civil Rights Movement as well as Joan’s memories of well-known people, including Dr. Martin Luther King, Jr., Medgar Evers, and Stokely Carmichael. We heard the full account of events leading up to and during the violent Jackson, MS Woolworth sit-in that involved four Tougaloo students (including Joan) and a Tougaloo professor. We heard personal accounts of what happened to three Civil Rights workers James Earl Chaney, Andrew Goodman, and Michael Schwerner, who were brutally murdered during Freedom Summer. The audience was captivated by the film and by Joan’s story-telling during the Q&A portion of the event. The magnitude of terror that citizens endured and the dedication of the ordinary people who fought for change are astounding and heartrending.

Fifty years later, clear progress has been achieved, but there’s still a ways to go on the quest for racial equality. The efforts of those who come before us cannot be forgotten. Here are some startling national statistics that are even more troubling in some local communities across the country.
  • According to the U.S. Bureau of Labor Statistics, the June 2014 unemployment rate for all Americans aged 16 and over is 6.1 percent. That figure for white Americans is 5.3 percent, compared to 10.7 percent for blacks.
  • During the Great Recession (December 2007 to June 2009), the national unemployment rate reached 9.5 percent. The highest level of unemployment that black Americans experienced was 15 percent, compared to 8.7 percent for whites. Over the last five years, the unemployment rate for blacks peaked at 16.5 percent in April 2011. The peak for whites was 9.2 percent in October 2009. Blacks were not only hit harder by the recession but for a longer period of time.
  • Of the 27.1 million firms in the U.S. in 2007[1], 83.4 percent were white-owned, compared to 7.1 percent that were black-owned. Of all black-owned firms, 1.6 percent have sales or receipts of $500,000 and over. Five percent of all white-owned firms have achieved this level of sales. While there was substantial growth in black-owned firms between 2002 and 2007 (60.5 percent compared to 13.5 percent for white-owned firms), much more is needed to reach a distribution that more closely resembles population distribution (13 percent of the population identify as black).
  • According to the U.S. Census Bureau, the 2012 median household income of black Americans is $33,764, compared to $56,565 for white households. The 2012 poverty rate for black Americans is 28.1 percent, compared to 11 percent for white Americans.
  • In terms of educational attainment, in 2012, 18.7 percent of black Americans aged 25 and over hold a bachelor’s or graduate degree, compared to 32.5 percent of white Americans. The gap in associate degree attainment is much narrower—7.7 percent of black adults have associate degrees compared to 8.5 percent of white adults. The percentage of black adults without a high school education is 16.8 percent, compared to only 8.5 percent of white adults.

There are myriad reasons underlying each of these statistics, and closing these gaps will continue to be complex endeavors. It is important to remember that racial inequality is a longstanding issue and that what is sometimes considered “black history” is American history—it’s a past that belongs to all of us, and we have to all learn from it. We should be proud of the progress that we’ve made, but we can’t get complacent. As a result of Freedom Summer, many of the barriers to voting were eventually removed and important legislation ,such as the Civil Rights Act of 1964 and the Voting Rights Act of 1965, was passed, and Mississippi now has more black elected officials than any other state in the nation. However, there are still very hefty and disturbing gaps in economic indicators and educational outcomes not only in Mississippi, but across the U.S., that need to be closed. We have to press on, understanding that as opportunities are opened and taken advantage of by minorities, it has a positive effect on everyone. 

An Ordinary Hero: The True Story of Joan Trumpauer Mulholland
Source: Taylor Street Films

[1] The 2007 Economic Census provides the latest data available. The 2012 Economic Census will be published later this year.

Friday, July 25, 2014

Non-Compete Clauses Makes Us Non-Competitive

By Evan Robertson, Senior Project Associate.

If there is one hot button economic development issue I hold dear, it is my complete disdain for non-compete clauses in employment contracts. These clauses allow a particular company to place future restrictions on what types of businesses or jobs a worker can migrate to upon leaving the company voluntarily. Anecdotally, I've seen, first-hand, non-compete clauses limit entrepreneurship.

A few years ago my friend decided to enter the cell phone repair business, which it turns out is a fairly lucrative endeavor or at least was at the time. He decided to join a cell phone repair shop to learn the ropes before he ventured out into his own business. Upon his hiring, the company had him sign a non-compete clause with some unbelievable restrictions regarding what he could and couldn’t do after he left. The non-compete clause was so stringent – admittedly probably wouldn’t have held up in court at the time, although some state’s like Georgia are passing stricter non-compete legislation to the detriment of the state’s entrepreneurs – that he was effectively barred from competing with the company within the state in which he lived. Simply put, in order for him to start businesses he would need to leave the state he’s called home for so many years.

Everyone loses out on non-compete clauses, local economies (through loss of experienced professionals branching out to start their own businesses), companies (through a restricted labor market that limits information sharing), and the worker (who must either hold off on career transitions or professional advancement). To me, non-compete clauses are the antithesis of economic mobility and, ultimately, economic development. And yesterday, I was happy to discover, it’s not just me.

The Kauffman Foundation’s Rethinking Non-Competes: Unlock Talent to Seed Growth is a short, but compelling read on the subject. My favorite line, and perhaps the foundational argument against non-compete clauses, the Foundation states “The free movement of individuals in and out of jobs is a crucial component of an entrepreneur-driven economy, in which those with good ideas can easily leave employment to start new businesses.” Labor mobility, as the policy brief correctly identifies, is limited by these contracts.

So, what is the impact? The Kauffman Foundation identified a number of adverse economic impacts caused by these clauses, the list includes; lower compensation, skill atrophy, degradation of professional networks, expensive legal battles, lower rates of return on venture capital investment in state’s that enforce non-compete clauses, brain drain, increased income inequality, and fewer workers changing jobs.

On the upshot, state’s that strictly enforce non-compete clauses tend to invest more in workforce training and companies within these states are more likely to engage in long-term R&D processes that could potentially transform their market.

Kauffman recommends a number of key policy changes including limiting the duration of the non-compete clause, narrowing their scope, and ensuring that potential employees know that they will need to sign a non-compete agreement long before they accept the job offer.

And, I’d take it one step further, because this is a blog and I’m allowed to go a little crazy. Employees leaving a firm to create their own business or joining a startup, should be given complete amnesty from their non-compete clause. To prevent abuse, these employees would be unable to be hired by a firm aged one year or older within their industry for one-year, but are free to pursue their own business idea. This has the potential to support entrepreneurship, ensure that the state’s best and brightest remain, and ensure these employees don’t lose their vital skills.

Thursday, July 17, 2014

Growth and Replacement, A Look At Employment Projections

By Katie Bass, Project Associate. 

In community and economic development, we are constantly trying to look into our crystal ball to prepare communities for changes in consumer preferences, technological advances, and business practices or organizational structures. We try to see what industries are growing and which are declining so that communities can best prepare their workforce through educational attainment and workforce training. The Bureau of Labor Statistics (BLS) publishes ten-year employment projections every two years to aid policy makers, career advisers, economic developers, and educational stakeholders in order to appropriately adjust recruitment efforts of companies and training program development.

There are two key indicators that, together, offer insight into growing professions. One, clearly, is the growth rate of the occupation which estimates how many jobs are going to be created or lost in a certain field over the next ten years. A number of factors can influence demand for certain occupations. Changing demographics and consumer preferences can increase the demand for certain services, while a technological change can create demand for a new service or product and conversely cause the decline in demand for another product. The changing demographics of the population as the percentage of older Americans grows, affects demand for health care services. As we saw during the recession, health care was one of the few sectors to post positive annual growth rates. Other changes, such as technological advances, can create rapid changes in the labor market. Look simply at the devastating effect that technology had on the job market in the postal industry. The number of postal service mail carriers is projected to decline by 26.8 percent by 2022. Similarly, my co-worker, Evan, blogged about the change in employment at businesses related to photography and how it impacted consumer preference as technology advanced, from one-hour photos to Facebook photo albums and cell phone cameras.

The other key indicator – job openings due to growth and replacement needs – measures the number of job openings from retirements and/or people leaving the occupation, in addition to the number of jobs created. This estimate reveals areas of potential weakness in a community due to the impending retirement of baby boomers that may be overlooked if you only examine the growth rate. It also includes those occupations that are typically short-term and “stepping-stones” as employees move along their career path. Occupations such as bartenders and waiters/waitresses are popular for college students because of their flexible schedules; however, once they graduate, they leave that occupation (hopefully) never to return. Tellers potentially act as an entry-level position for finance careers. As the employee gets their degree and moves up the corporate ladder, they vacate that teller position permanently. Regardless of whether the employee is a retiree or simply moving to a new position, between 2012 and 2022, replacement needs are expected to account for 67.2 percent of job openings, or roughly 34 million of the projected 50.6 million job openings.

Take for example, air traffic controllers. Employment as an air traffic controller is expected to increase by only 1.4 percent, or 400 jobs. However, over the next ten years there will be nearly 12,000 job openings as air traffic controllers retire (approximately one-third of total employment in the occupation). Recall the 1981 illegal federal strike by air traffic controllers and Reagan’s unprecedented firing of around 11,000 strikers – at the time there were roughly 17,500 total air traffic controllers working for the FAA. Reagan further placed a life time ban on the strikers from ever working as controllers for the FAA again, and as a result, thousands of new employees were hired and trained to be air traffic controllers. The FAA has an age distribution unlike many occupations causing a vicious cycle of large numbers of air traffic controllers retiring at the same time and subsequently large training classes to fill the imminent need for new employees. Roughly one-fifth of air traffic controllers are over the age of 55 and will need to be replaced in the coming years.

Occupations that require post-secondary education or long-term training are the most disconcerting with regards to workforce sustainability. They require the most amount of time to train and educate and can lead to potential skills gaps or strains on the market. The number of registered nurses, for example, is projected to increase by 19.4 percent, which translates to just over half a million jobs. However, there will be nearly an equal number of job openings that stem from replacement needs as older registered nurses retire. As such, there has been an increased effort in training registered nurses nationwide to fill both newly created jobs and those soon-to-be vacated jobs.

The Wall Street Journal recently published an article highlighting the shortage of truck drivers in the United States. A prolonged shortage of truck drivers would affect multiple industries and cause strains on the market. In the past a person could enter this career at 18, however requirements have changed and currently a person must be at least 21 years old to have an interstate commercial driver’s license. Further, some insurance companies are placing even higher age requirements to then insure a driver. The lack of interest in the career for those old enough to work as a truck driver and competition from employers in construction or energy businesses has contributed to fewer people entering the career, which causes a concern for those companies that don’t have a pool of applicants to replace the impending retirees.

Understanding and preparing for growth and replacement needs or a change in requirements, consumer preferences, or technological advances is crucial to having a sustainable workforce. Communities across the country are stepping up and implementing programs to best prepare their local workforce for careers in occupations where they will be able to find a job.

The growing need for a stronger local workforce and a national demand for technically trained employees led the community in Grand Island, Nebraska and the Grand Island Public Schools (GIPS) to come together to create a state-of-the-art career and technical training center – the Career Pathways Institute (CPI). Working with Central Community College, freshman and sophomore high school students can take introductory courses at CPI without charge and then apply their junior and senior years to earn college credits towards an associate’s degree. The programs offered range from welding to business and look promising to help fill the community’s need for trained workers by sparking the students’ interest in the career early on and providing the resources to get the training and education in it.

Career Pathways Institute Classroom
Image Source: Market Street Services

New York City partnered with IBM to create Pathways in Technology Early College High School (P-TECH) with a “9-14 School model.” Students attend up to grade 14, and upon graduation obtain both a high school degree and an associate’s degree in applied science in either computer systems technology or electromechanical engineering technology, in addition to gaining experience. IBM, for its part, will benefit with having a qualified pool of talent for its future workforce.

The growing, newly created jobs and those that are needed for replacement of retirees are two important components when analyzing the sustainability of a workforce. Going beyond the growth rate and numbers and understanding your local communities’ demands and national trends is necessary to prepare your residents and future residents with the most opportunities for an improved quality of life. Whether it’s the welders and agribusiness professionals in Grand Island or the engineering technicians and software specialists in New York, increasing the wealth of your community by identifying problems early, giving residents the tools to succeed, and getting them qualified for the future supply of employment opportunities is what makes the job for those of us working in economic and community development so rewarding.

Thursday, July 10, 2014

The Good Stuff

By Alexia Eanes, Operations Manager.

As I rehash memories from the recent Independence Day holiday I start to think about the fireworks that were viewed, the food that was consumed, our freedom (of course), and beer. Why beer? Beer has long been the national choice of alcoholic beverage consumed on Independence Day. It’s the epitome of summer, relaxation, and gatherings so it’s no wonder why it’s highly consumed during this time of year.

When beer is mentioned it’s really hard to not think about the craft beer boom that’s happening right now. The Census just released a statement (right before Independence Day, mind you) stating that U.S. breweries more than doubled between 2007 and 2012 and shipments increased more than 33.6%! It’s hard not to notice this upsurge in the craft beer/microbrewery movement. Now you’re increasingly likely to see a craft brew from in-state or a neighboring state being gulped in a restaurant or bar rather than just beer distributed from Anheuser-Busch. There’s no data supporting evidence of the reasons behind this switch but one can assume that it has to do with flavor, first and foremost. Another reason could be that consumers and craft brewers alike are devoted to local identity. They want to create or consume something unique that identifies with a specific location – not something that tastes the same all over the world.

According to the Brewers Association, to be classified as a “craft brewery” you must not distribute more than 6 million barrels of beer each year, more than 25% of your company cannot be owned by one of the major beer suppliers (Anheuser-Busch, Miller-Coors, etc.), and you must have a traditional or innovative way to brew your beer – circling back to local identity. The Brewers Association has a great tool on their website that analyzes each state’s economic impact and numbers of breweries. It also allows you to search breweries by state and look up state laws for those who want to open their own brewery. California takes the top spot with 381 breweries and an economic impact of $4.7 billion per year in the state and, in last place, Mississippi which has 4 breweries with a shockingly moderate economic impact of $149.5 million per year.

I’m excited to report that local cities and counties are taking notice and jumping in on the opportunity as well. Of course in “Beer City” A.K.A. Asheville, N.C., the Asheville-Buncombe County Economic Development Coalition fully embraces the fact that Asheville has more breweries per capita than any other city. They point out their distinct qualities geared toward the brewing process such as clean water, booming downtown, and its progressiveness. All of these are important aspects for relocating or growing your brewing business. These factors won over New Belgium Brewing Company who just started a second brewery in Asheville. What’s more enticing about this, the company worked with the state of North Carolina to put their brewery in a brownfield that needed remediating and may act as a catalyst for other business to build up the area.

On the other coast where wine dominates, the Economic Development Board in Sonoma County has developed an in-depth mapping system to navigate the County’s growing craft beer production. In Sonoma County alone there are 21 breweries that generate around $123 million per year. Even my home city in Pinellas County, Florida has experienced a boom in the craft beer movement – which is thoroughly exciting for me to witness the positive changes happening there. The St. Petersburg-Clearwater CVB has created a craft beer trail to point out all the craft breweries in the county – this will be happening in my near future.

To help sustain this positive sector growth, universities are jumping in and developing courses to educate those that are interested in learning and making a career in the industry. In 2013 Portland State University created an online course called “Business of Craft Brewing” which focuses on the vital business skills required to run a successful brewery. This is important for the mere fact that if you have a passion for the craft and want to start a business, obtaining a niche business education would increase your chances of success. Another college jumping in to handle demand and compete with Portland, Clark College in Vancouver, Canada is hoping to open the Clark College Center for Restaurant and Fermentation Sciences which will train students in the growing restaurant and brewing industry.

It’s refreshing to see cities and counties take advantage of what’s being offered even if, for now, it seems a little unconventional. It’s new and exciting to the consumer and is only trending upward. 

Friday, July 4, 2014

Celebrating Life, Liberty and the Pursuit of Happiness

By Jim Vaughan, Senior Fellow.

On April 17, 2013, I wrote a post about Santa Fe, one of America’s great and unique cities, in which I asked the question, “Why don’t I live here?” Today, I’m writing this post as a new resident of Santa Fe. After ten years in Waco, Patty and I have moved to “The City Different” for a year that we are calling “our great adventure.”

We arrived in Santa Fe just before Independence Day—a holiday that will be celebrated here and across the nation with fireworks, parades, speeches, picnics and promotions. Some events are worthy of the great day, some not so much.

MSNBC has been running promos by Chris Matthews leading up to the 4th of July that have put the holiday into perspective for me.

“It took twenty-two months of men debating … to achieve the Declaration of Independence,” Matthews said, reminding us that progressive change takes time. “Abolition would take a great civil war but it came. Woman’s suffrage would take a crusade but it became part in parcel of our democracy. Voting rights have taken a brutal fight as will the case for marriage equality and equal pay for men and women.“

Not everyone will come to Matthews’ conclusion that “liberalism always wins eventually.” But chamber of commerce and economic development professionals know that significant change does occur in America because we have affected change—sometimes significant change—in the cities and states where we work.

Matthews notes that it took the Continental Congress almost two years to write and adopt the Declaration of Independence.

On this 238th anniversary of our nation’s Independence, let’s celebrate the Declaration and the Congress that adopted it. And remember that while change takes time, it also takes leadership and advocates.

Here’s to the leaders and advocates for change in the communities where Market Street is working.