Monday, February 26, 2018

Takers or Creators

By Matt Tarleton, Executive Vice President

Another week, another stalemate, another delay in deciding the fate of millions of past, present, and prospective future immigrants to the United States.

Without delving too far into the political sensitivities that surround the topic, it is fair to say that immigration can be an exceptionally divisive issue in this country, particularly when the conversation relates to jobs. Those who support more restrictive immigration policies often express concern that immigrants are “taking jobs” that would otherwise be filled by Americans. Many are quick to respond with a variety of counter-arguments related to skills gaps and the country’s prevailing workforce shortages that have emerged from an aging population coupled with low unemployment. As my colleague Alex Pearlstein pointed out: “With talent now the prized currency of economic development, the U.S. cannot become complacent in the belief that our incumbent population will be sufficient to support growth across industries technological and otherwise.”

Clearly a great deal of attention is appropriately paid to the manner in which immigration – legal and illegal – affects the workforce conditions of natural born Americans. We focus on their role and impact as employees in this country. What often gets lost in the conversation is the impact that immigrants and their children have as employers – job creators – in the United States.

Launched by Michael Bloomberg and Rupert Murdoch, the Partnership for a New American Economy is a bipartisan coalition of more than 500 hundred mayors and business leaders that support comprehensive immigration reform. The Partnership has helped improve understanding of the role of immigrant sin our economy through numerous publications. Much of this research is also supported by data and analysis conducted by the Census Bureau and the Small Business Administration using information from the Current Population Survey and the Census of Business Owners. Collectively, this research and many other data points help illustrate that, by a variety of measures, immigrants and their children contribute to our nation’s economy as job creators at a considerably higher rate than their native born counterparts.

  • Despite accounting for just 13 percent of the population, immigrants now start more than 25 percent of new businesses in the United States.
  • Immigrants are also more than twice as likely to start a business as native-born citizens. The business formation rate per month among immigrants is 0.62 percent (or 620 out of 100,000) as compared to the non-immigrant rate of 0.28 percent.
  • From 1996 to 2011, the business startup rate of immigrants increased by more than 50 percent, while the native-born startup rate declined by 10 percent, to a 30-year low.
  • According to the National Venture Capital Association, immigrants have founded or helped to found 25 percent (88 out of 356) of all public U.S. companies that were backed by venture capital investors over the last 20 years.
  • Fortune 500: 43 percent of Fortune 500 firms and 53 percent of the Fortune Top 25 (13) were founded by immigrants or their children.
  •  More than 20 percent of the Inc. 500 CEOs are immigrants.
  • Companies founded by immigrants include Google (Sergey Brin, first generation from Russia), Tesla (Elon Musk, first generation from South Africa), eBay (Pierre Omidyar, first generation born in France to Iranian parents), and Intel (Andrew Grove, first generation born András Gróf in Hungary).
  • Companies founded by children of immigrants include: Ford (Henry Ford, second generation, son of an Irish immigrant), Apple (Steve Jobs, second generation, son of a Syrian immigrant), Amazon (Jeff Bezos, second generation, son of a Cuban immigrant).

This list could go on and on with statistics related to the contribution of immigrants to job creation in the United States. While you’re unlikely to find stronger advocates for policy predicated on evidence than those of us at Market Street, we don’t need rigorous accounting and econometrics to understand that the employment opportunities afforded to so many of us – our friends and family – are predicated upon the ingenuity and contributions of immigrants and their children. These are the same employment opportunities that economic developers and policymakers compete for aggressively. Cough. Amazon. Cough.

Tuesday, February 20, 2018


By Ranada Robinson, Research Manager

Earlier this month, I tuned into a webinar by the Urban Institute entitled “Restoring the American Dream: What Would It Take to Dramatically Increase Mobility from Poverty?”. Generational poverty has been a topic of interest of mine for many years because as a native of Mississippi, I’ve seen the stark differences in the quality of life for folks along the wealth spectrum. I’ve also heard rags to riches stories and wondered how to make that a possibility for more people. Just anecdotally (without delving into policy issues), from my own life experiences, observations, and conversations with my parents and other community elders before I chose economic development strategic planning as a career, I came to the conclusion that this is a complex problem for sure, but two things that really matter in the likelihood of moving out of poverty and crafting a promising trajectory are exposure and education. Exposure to the possibilities of life is essential to a person, particularly children, achieving because it provides a launching point for dreams and goals to be identified in the first place. Sometimes the problem is just not knowing what you don’t know, and once you know what’s out there, a spark can be lit to strive for that thing. That’s why I am a huge advocate for school field trips, free weekends at museums, career fairs, and accessible programs and initiatives that can provide that exposure. Some people would be extremely surprised to know how many kids have never been outside of their neighborhood within a city, let alone to another state or another country or who have never met a doctor or a scientist or even an economic developer. I’m sure that most can agree that education is vital. Access to quality education prepares kids (and adults!) for a future not just academically, but also the opportunities to connect to jobs or to the skills and networks that can lead to jobs or entrepreneurial prospects.

This webinar, which highlights the work of the US Partnership on Mobility from Poverty, featured some background data that you may have seen before:

Children are less likely to do better than their parents now.

There are fewer jobs available that provide good wages and benefits, especially for skilled workers.

ZIP codes, race/ethnicity, and gender matter more than ability and knowledge in many instances.

The webinar discussed the attitudes toward poor people, and of course that’s an obstacle itself outside of the actual barriers and obstacles that lack of money and resources present.

The strategic takeaways include:
  • Changing/shifting the narrative is an overarching need in order to battle poverty. Policy and program ideas could move at a greater scale if we can humanize those in poverty and expose structural issues while also highlighting who wins and who loses because of those issues.
  • We must create access to good jobs through strategies such as worker protections, experimenting with portable benefits, subsidized jobs, and job guarantees, extending earned income tax credits, monetizing or increasing pay for care work (caring for family members with disabilities) and upscaling workers’ skills through employer training through community colleges.
  • Programs and policies should put families in the center so that they are able to attain support that empowers. 
  • Data can be a powerful tool if it is used across partners. Transformed data use can be leveraged to increase accountability and transparency.

As complex as the poverty issue is, with all hands on deck and with an understanding that helping the least of these will help us all, we can absolutely put a dent in poverty in America. Poverty is an issue that spirals and gets worse with no intervention, but private businesses, nonprofit entities, policymakers and other government officials, and other partners working together can make all the difference and maybe start turning around some of the troubling trends that we’re facing nationally.

Wednesday, February 14, 2018

Amazon HQ2 could lead to uncharted waters

By Matt DeVeau, Project Manager

One morning this past September, I stepped out of the office for a few minutes, forgetting my cell phone at my desk. I came back to a screen full of disquieting text message notifications.

“Woah, can you believe this?!?” 

“Did not see this coming!”

…and a few unprintable variations thereof.

When I opened the first one to see the attached link, the reactions of my friends and colleagues made sense. Amazon had opened a search for a second headquarters – HQ2 – that would bring 50,000 jobs and $5 billion of investment to a city in North America. And this news was not a product of a leak but rather a press release; this search would be conducted at least somewhat within public view.

There was never a doubt that this would be massive, workflow-altering news for much of the economic development community, and that has indeed been the case. But it did not occur to me how much this would capture the attention of the general public. (Though maybe it should have been given the company’s consumer-facing stature.)

Without exaggeration, nearly everyone who knows me well has asked me what I think is going to happen with HQ2 or shared their own theory. This includes friends with whom I rarely if ever discuss work and people who have no idea what I do – rideshare drivers, travelers at airport bars, and so on. By contrast, I can’t recall a single conversation with someone outside of the economic development world about Foxconn’s planned manufacturing facility in Wisconsin that could receive $4.5 billion in public funds.

I have yet to come across an analysis of the extent to which HQ2 is being discussed in traditional and social media. But a quick look at Google Trends data suggests that HQ2 is a different animal. The following figure is an index with values between 0 and 100 showing the prevalence of Google searches for “Foxconn” in the United States between July 1, 2017 and February 8, 2018. There is a massive spike of interest around the announcement of the Wisconsin facility in late July with only small peaks since that time. Additionally, searches for the term have been heavily concentrated in Wisconsin.

Meanwhile, the following figure shows the search volume for “HQ2” using the same parameters as above. The announcement of the site selection process on September 7, 2017 is a small blip compared to the activity around the deadline for bid submissions in October and the announcement of 20 finalist communities in January. Additionally, searches have been far more evenly distributed from a geographic perspective. (It’s true that these two searches are not exactly apples-to-apples comparisons. There are of course major substantive differences between the projects, but searches for the term “Amazon” also seem to spike around the holidays and “Prime Days.”

Amazon’s HQ2 search is unprecedented. That much is obvious to everyone in economic development. But I think it’s important to acknowledge that the attention it has garnered could have broad implications. Both Amazon and local communities have used the process as an opportunity to learn about one another, and some economic developers have reported that it has helped foster regional collaborations that were previously elusive. The mere possibility of landing Amazon has also influenced public policy discussions in some communities.

But the HQ2 search has also been folded into conversations about housing affordability, congestion and transit connectivity, and the role of public incentives that are heating up in many of the nation’s most economically successful regions. Speculation has even begun about a potential backlash in some communities.

The above is presented without editorial comment merely as an illustration of how HQ2 could have wide-ranging impacts far beyond the community in which the project ultimately lands. And what these impacts will be is just as uncertain this point as which community Amazon will ultimately select.

The takeaway for people in the community and economic development world is to watch this situation closely and be prepared to adapt to how HQ2 could dramatically shift the conversation around economic development. This time around, everyone is paying attention.