By Matthew Tarleton, Senior Manager, Research and Projects.
Good news from our home state last week: Georgia’s graduation rate increased by 1.8 percentage points between 2012 and 2013. The bad news: the state is probably still in the bottom five in terms of high school graduation. Although all states have yet to report graduation rates for 2013, last year the state’s graduation rate only exceeded that of Nevada, New Mexico, Oregon, and the District of Columbia.
Clearly Georgia still has a long way to go. This is no surprise, and not the focus of this blog entry.
Rather, I want to focus on something positive underlying the overall graduation rate and its increase from 2012 to 2013. Data from the Georgia Department of Education show that much of the improvement in the state’s graduation rate can be attributed to a reduction in achievement gaps between white students and minorities.
Education has long been referred to as “the great equalizer.” There is an abundance of evidence showing the relationship between education attainment and income. There is also an abundance of evidence showing the relationship between education and a variety of other outcomes that we expend tremendous government resources attempting to address: health outcomes, crime, and unemployment among them. According to the Bureau of Labor Statistics, the median wage for a high school dropout was $24,492 in 2011 as compared to $33,904 for a high school graduate. The unemployment rate for dropouts in the same year was 14.1% as compared to 9.4% for graduates. According to the National Dropout Prevention Center/Network (NDPC/N), a dropout will earn roughly $200,000 less than a graduate in their lifetime. Meanwhile, 82% of prisoners in the United States are high school dropouts. Given the influence of educational attainment, closing the achievement gap may have the single greatest impact on a variety of observed racial/ethnic disparities in such outcomes.
So what exactly happened in Georgia between 2012 and 2013? In 2012, the achievement gap between white students (graduation rate of 78.0%) and black students (61.8%) stood at 16.2%. This was the 27th largest achievement gap among 47 states with comparable data. In 2013, that gap declined to 14.6% as black students experienced more significant improvements in their graduation rates (+2.5%) relative to their white counterparts (+0.9%). The achievement gap between white students and Hispanic students also declined. In 2012, the state’s white-Hispanic achievement gap of 18.2% was the 38th largest achievement gap out of the same aforementioned 47 states. Between 2012 and 2013, the white-Hispanic achievement gap contracted by 2.6 percentage points to 16.5%. Only seven states in the country have a larger minority population as a share of all residents (in other words, only seven have a smaller non-Hispanic white population as a share of all residents). Given its relatively large minority population, continued reductions in achievement gaps can have a tremendous impact on raising the state’s graduation rate relative to its peers.
Researchers have studied the factors that contribute to achievement gaps for decades, with a wide variety of explanations emerging. Some point to underlying differences in socioeconomics for different races and ethnicities, with socioeconomic disadvantages potentially reflecting comparatively limited access to educational resources. Higher rates of single-parent households among blacks and Hispanics have also emerged as a common explanation, with such rates reflecting less time for parental involvement. This issue is compounded for many English Language Learners who not only start at a lower level of English language knowledge but also may lack English-speaking parents at home that are capable of helping students with homework. Other studies have pointed out reinforcing factors that compound the problem over time; low-performing school districts may attract less qualified educators and depress home prices, creating a cycle that exacerbates existing problems. There are many other explanations, both environmental and structural, but there does seem to be consensus that achievement gaps measured by test scores emerge at very early ages, emphasizing the importance of early childhood education and equal access to such early education.
While some state policies can have a significant impact on achievement gaps – perhaps most notably the investment in and promotion of equal access to early childhood education – much of the improvement that we see in statewide outcomes are a result of efforts implemented at the local level. We are frequently working with communities to identify appropriate programs, policies, and initiatives that can support these goals, in Georgia and nationwide. Using the same data from the Georgia Department of Education, I wanted to examine how some of client communities have performed in recent years. Having worked in nearly 20 communities throughout the state, an exhaustive analysis would make for a mighty long blog post. So at the risk of being accused of playing favorites, I am just going to focus on a few here.
We are currently working in Macon-Bibb, where the Bibb County School System has been characterized by a graduation rate near 50% in recent years. In 2012, just 52.3% of students graduated. The data released last week showed a tremendous improvement: the graduation rate rose by 8.8 percentage points to 61.1%. The achievement gap between blacks and whites in the district declined from 13.8 percentage points to 8.6 percentage points. This is an impressive improvement and one that the community will hopefully sustain through hard work and commitment. You can see our research findings and view the community’s “One Macon!” strategy in full when it is released next month by visiting the project website. Without question, there will be a heavy emphasis on improving student outcomes; residents identified low graduation rates as the community’s greatest challenge.
We have also completed work in a number of Metro Atlanta communities in recent years, including but not limited to Cobb and Gwinnett Counties. Achievement gaps between white and black students, and white and Hispanic students, have declined substantially in both communities.
Down in Columbus-Muscogee, the graduation rate for all students surged by 5.3 percentage points from 67.5% to 72.8%, bringing the system above the statewide average. The white-Hispanic achievement gap has improved, but the white-black achievement gap has widened despite a strong surge in the black graduation rate (3.7 percentage points) that simply failed to keep pace with an even larger surge in the white graduation rate (6.4 percentage points).
While there are some great success stories across the state, there hasn’t been much for the entire state to applaud in terms of education for quite some time. Make no mistake – Georgians should not be proud of a statewide graduation rate of 71.5%. But we can find some comfort in knowing that observed improvement sin graduation rates this year have come largely from improvements in reducing our achievement gaps.
And of course, if you are a Georgia community and interested in knowing how your district(s) performed in recent years, give us a call.
Wednesday, December 18, 2013
Wednesday, December 11, 2013
Mandela
By J. Mac Holladay, founder and CEO.
I remember it like it was yesterday when we took the ferry to Robben Island. In 2008, we went to Africa for the first time. In Capetown, I knew that we wanted to see the prison where Mandela and so many others were held for so long. Mandela’s clan name was Madiva, but he was known by the name his first teacher gave him. She called him Nelson. Then, we knew only a small amount about the history of the nation. We knew nothing about Robben Island.
Now we do. It had been a leper colony before it was a prison. The island is a bleak place with a white limestone mine in the middle. All the prisoners were required to work there. Their eyes were not protected as sunglasses were not allowed and many went nearly blind. It was back breaking, monotonous work.
The prison itself was a stark and cold place. All the cells were 8 feet by 7 feet. A mat on the floor served as the bed. There was a small window with bars for the only light. All of the guides on Robben Island are former prisoners, ours was named Kgosto. As with most, he was convicted of treason.
In all of my wildest dreams, I can not imagine being caged there in one place for over 20 years. Mandela read, he studied, he thought, and he prepared all those years for what was to come. A chance to move his country, and this world, forward in a way no one imagined.
As Bishop Tutu made clear in his great book No Future without Forgiveness, South Africa faced enormous challenges. The way forward was by no means assured. So Mandela walks out after 27 years of confinement and says – “We are all South Africans” and then he proved it every day as the country’s first elected President. In his inaugural address in May 9, 1994 he said “Never, never, and never again shall it be that this beautiful land will again experience the oppression of one by another.”
One of our rich experiences in Capetown was to eat dinner at a home, now a small restaurant in Langa Township, which was not too long ago a ghetto where no whites could go. The owner’s name is Shelia who raised her family there and, since there are no mortgages in South Africa, had built her home one room at a time. This is economic development at the core.
Yes, there is yet much to do in South Africa, but it has come so far that none of us in America can even understand where it was and what Mandela meant to everyone there.
I have been fortunate to travel the world, no place has ever affected me like South Africa. Mandela is the reason. He was a man really beyond description, a giant of a man, and one that all of us in this work have been blessed by his leadership and his love of country and its people – all of them. What a lesson to learn. Thank you, Madiva.
I remember it like it was yesterday when we took the ferry to Robben Island. In 2008, we went to Africa for the first time. In Capetown, I knew that we wanted to see the prison where Mandela and so many others were held for so long. Mandela’s clan name was Madiva, but he was known by the name his first teacher gave him. She called him Nelson. Then, we knew only a small amount about the history of the nation. We knew nothing about Robben Island.
Now we do. It had been a leper colony before it was a prison. The island is a bleak place with a white limestone mine in the middle. All the prisoners were required to work there. Their eyes were not protected as sunglasses were not allowed and many went nearly blind. It was back breaking, monotonous work.
The prison itself was a stark and cold place. All the cells were 8 feet by 7 feet. A mat on the floor served as the bed. There was a small window with bars for the only light. All of the guides on Robben Island are former prisoners, ours was named Kgosto. As with most, he was convicted of treason.
In all of my wildest dreams, I can not imagine being caged there in one place for over 20 years. Mandela read, he studied, he thought, and he prepared all those years for what was to come. A chance to move his country, and this world, forward in a way no one imagined.
As Bishop Tutu made clear in his great book No Future without Forgiveness, South Africa faced enormous challenges. The way forward was by no means assured. So Mandela walks out after 27 years of confinement and says – “We are all South Africans” and then he proved it every day as the country’s first elected President. In his inaugural address in May 9, 1994 he said “Never, never, and never again shall it be that this beautiful land will again experience the oppression of one by another.”
One of our rich experiences in Capetown was to eat dinner at a home, now a small restaurant in Langa Township, which was not too long ago a ghetto where no whites could go. The owner’s name is Shelia who raised her family there and, since there are no mortgages in South Africa, had built her home one room at a time. This is economic development at the core.
Yes, there is yet much to do in South Africa, but it has come so far that none of us in America can even understand where it was and what Mandela meant to everyone there.
I have been fortunate to travel the world, no place has ever affected me like South Africa. Mandela is the reason. He was a man really beyond description, a giant of a man, and one that all of us in this work have been blessed by his leadership and his love of country and its people – all of them. What a lesson to learn. Thank you, Madiva.
Monday, December 9, 2013
Film: Beyond Job Creation
By Jonathan Miller, Project Associate.
I have written a couple blog posts on the film industry and focused on the efficacy of incentives. It is difficult to see a definitive correlation between incentives and the multiplier effect for both jobs and earnings. However, Georgia has fully embraced the film and entertainment sector through its incentive policy, and unlike other states, such as North Carolina, the incentives law does not have a sunset provision. The sunset provision in North Carolina (incentives terminate at the end of 2014) is already impacting the business. According to a film producer, “Films and shows that are being planned 18 and 24 months out are not looking at North Carolina because they don't know what is going to happen 18 months from now.” The certainty of the incentives in Georgia is supportive of local investments in film infrastructure, and it’s pretty incredible to witness.
I recently toured Fayette County and had the opportunity to drive over to Senoia, Georgia. Located adjacent to Peachtree City, Senoia is where most notably the TV show “The Walking Dead” is filmed. The filming activity and the popularity of the show has given rise to a cottage tourism industry complete with walking tours, trolley tours, and smartphone applications. Perhaps the most noticeable effect of the filming presence is the investment that has been made in the downtown area. Senoia Enterprises, a development company with close ties to Raleigh Studios, has rehabbed many of the buildings and stores on Main Street and created a charming streetscape that is used as a back lot for production. New homes are also being built with the look and feel of brownstones so they can be used for recreating scenes that take place in New York City, Chicago, or Philadelphia. Other homes have the feel of Savannah and Charleston. Such follow-on investment increases the visibility of the industry and has truly revolutionized Senoia.
I give this example to provide another glimpse into the film and entertainment sector to highlight the positive economic development effects that are not captured by job creation figures. Pinewood Studios, a well-known British studio company, is building a large studio complex in Fayette County (the property was annexed into Fayetteville in March). The studio has already booked a large budget production and will begin filming in January. The studio will not only have sound stages, but there will be an onsite Home Depot that will provide lumber and hardware to production companies at Pinewood and also other nearby studios (such as Senoia and Tyler Perry’s studio in Atlanta. The sales tax that will be generated from the endeavor will flow to the local jurisdictions, augmenting local budgets. The Pinewood facility will also have an educational component so that productions will have access to a skilled workforce. Again, it’s these “extras” that embody the ongoing impact of such projects.
Much of the argument against film incentives revolves around the transiency of both the filming process and the film workforce. From an economic development perspective the goal is to capture as much local investment and job creation as possible. Tying film production to your geography is the critical element as it works to sustain local investment. In Senoia, the investment in downtown sustains a relationship between the town, fans, and the studio. In Fayette County, the campus setting for not only production, but vendors and training as well, adds to the long-term value that the investment will bring to the community. While tax incentives may create the environment for being competitive for film, it’s often the fixed investment that will pay off in the long run.
I have written a couple blog posts on the film industry and focused on the efficacy of incentives. It is difficult to see a definitive correlation between incentives and the multiplier effect for both jobs and earnings. However, Georgia has fully embraced the film and entertainment sector through its incentive policy, and unlike other states, such as North Carolina, the incentives law does not have a sunset provision. The sunset provision in North Carolina (incentives terminate at the end of 2014) is already impacting the business. According to a film producer, “Films and shows that are being planned 18 and 24 months out are not looking at North Carolina because they don't know what is going to happen 18 months from now.” The certainty of the incentives in Georgia is supportive of local investments in film infrastructure, and it’s pretty incredible to witness.
I recently toured Fayette County and had the opportunity to drive over to Senoia, Georgia. Located adjacent to Peachtree City, Senoia is where most notably the TV show “The Walking Dead” is filmed. The filming activity and the popularity of the show has given rise to a cottage tourism industry complete with walking tours, trolley tours, and smartphone applications. Perhaps the most noticeable effect of the filming presence is the investment that has been made in the downtown area. Senoia Enterprises, a development company with close ties to Raleigh Studios, has rehabbed many of the buildings and stores on Main Street and created a charming streetscape that is used as a back lot for production. New homes are also being built with the look and feel of brownstones so they can be used for recreating scenes that take place in New York City, Chicago, or Philadelphia. Other homes have the feel of Savannah and Charleston. Such follow-on investment increases the visibility of the industry and has truly revolutionized Senoia.
I give this example to provide another glimpse into the film and entertainment sector to highlight the positive economic development effects that are not captured by job creation figures. Pinewood Studios, a well-known British studio company, is building a large studio complex in Fayette County (the property was annexed into Fayetteville in March). The studio has already booked a large budget production and will begin filming in January. The studio will not only have sound stages, but there will be an onsite Home Depot that will provide lumber and hardware to production companies at Pinewood and also other nearby studios (such as Senoia and Tyler Perry’s studio in Atlanta. The sales tax that will be generated from the endeavor will flow to the local jurisdictions, augmenting local budgets. The Pinewood facility will also have an educational component so that productions will have access to a skilled workforce. Again, it’s these “extras” that embody the ongoing impact of such projects.
Much of the argument against film incentives revolves around the transiency of both the filming process and the film workforce. From an economic development perspective the goal is to capture as much local investment and job creation as possible. Tying film production to your geography is the critical element as it works to sustain local investment. In Senoia, the investment in downtown sustains a relationship between the town, fans, and the studio. In Fayette County, the campus setting for not only production, but vendors and training as well, adds to the long-term value that the investment will bring to the community. While tax incentives may create the environment for being competitive for film, it’s often the fixed investment that will pay off in the long run.
Wednesday, November 27, 2013
On being thankful!

The news that some big retailers will be opening on Thanksgiving Day this year and that there may be a shortage of turkeys has me thinking about this great American holiday and how it came to be sacrosanct in our culture.
I mean, is there anything more American than turkey and dressing, cranberry sauce, sweet potatoes with marshmallows, green bean casserole and baked pies—pumpkin, apple, cherry and pecan?
Actually, about the only thing on today’s Thanksgiving menu that the Pilgrims enjoyed in 1621 was the turkey and it was not the “centerpiece” of the meal according to Smithsonian.com. More likely goose or duck was the wildfowl of choice and there was pumpkin, squash, Indian corn and nuts gathered from the forest.
Not even the date is historical. President George Washington proclaimed Thursday, November 26, 1789 as a national day of thanksgiving. Other presidents did likewise, from time to time, until President Abraham Lincoln made Thanksgiving a national, annual holiday with a specific date, the last Thursday in November.
All was well for 75 years until President Franklin Roosevelt, at the behest of retailers seeking to extend the Christmas shopping season, moved the date to the second-to-last Thursday which is said to have divided the country with some states following FDR’s proclamation, others celebrating on the traditional date and Colorado and Texas deciding to honor both dates! In 1941, Congress passed a law declaring that Thanksgiving would occur on the fourth Thursday of November where it has been celebrated ever since.
One thing hasn’t changed, however, and that is Thanksgiving Day is a time to gather together—with family and friends and as a grateful nation—to give thanks for our many blessings.
On this Thanksgiving, my associates and I at Market Street Services are thankful for the work local and state chambers are doing to strengthen our nation’s economy and important initiatives to improve the lives of all people.
And we are especially thankful to our clients for the opportunity you have given us to work with you.
Happy Thanksgiving!
Monday, November 25, 2013
A Friend from Long Ago
By J. Mac Holladay
I had come home to Memphis from five years as a U.S. Naval
Aviator. I had been all over Asia, including Vietnam. I was hired by Dave
Cooley, the strong and visionary head of the Memphis Chamber. My dad said it
was the organization that was making a difference.
I was the low man on the staff chart. They called me the
Director of Special Projects. That meant that I was assigned any and all tasks
that none of the key staff wanted to do. So when Memphis faced a seriously
controversial school desegregation order in the fall of 1972 and Mr. Cooley
decided we had to lead, not follow, I got the call.
We wrote a grant request from the U.S. Department of Justice
to help us peacefully desegregate all of Memphis' public schools. With the help
of our U.S. Senator, Howard Baker, we got the grant.
So we created IMPACT - Involved Memphis Parents Assisting
Children and Teachers. Our core committee was headed by a Methodist minister
named Jim Holmes. It was a diverse, dedicated group of citizens. I was the
Executive Director. The intensity, the danger, and the importance of what we
were doing made those six months before the buses rolled some of the most
interesting and exciting of my career. Every child got to school safely that
January morning in 1973.
One man captured what happened and its importance at the
time. His name is John
Egerton. He graduated from the University of Kentucky, served in Army, and
in 1965 moved to Nashville to work for Southern Education Reporting Service.
John reported on civil rights as it unfolded and later wrote ten books about
integration in the South and was the co-creator of the documentary A Child Shall Lead Them, which is about
the desegregation of Nashville's schools.
While it is less well known than many of his books, he also
wrote a short history of our work in Memphis. It is titled "Promise of
Promise," which he wrote for the Southern Regional Council. Memphis was
the first major city in the South to peacefully desegregate its schools in 1972-73.
John told the story of our people, our strategy, our tactics, and our success.
It made me proud to be a part of the story.
John Egerton died on Thursday at his home in Nashville.
While he later wrote about food and the connection of social justice with our
Southern culture, I know what he cared about the most. He wanted the South to
be better than it was, and he knew we had to do it together. Thanks John. I,
and many others, will miss you and not forget what you wrote all those years
ago.
Thursday, November 21, 2013
The Future of a Car Reliant City
I grew up in suburban Florida where mass transportation and a walkable community were outlandish topics so Atlanta, comparatively, is a transportation mecca. Not to say that Atlanta doesn’t have work to do. Like many other cities, Atlanta is faced with setbacks that are up to the city leaders to address. After the initial implosion of TSPLOST the dreams of Atlanta becoming a city that doesn’t depend as much on their cars seemed doomed. A year and a half later, there’s been a lot of rumblings around town lately about Atlanta’s transportation “issue” and ways the City is trying approach it and prove that it – in certain areas – is an alternative commute-friendly place. Below are some examples of how Atlanta is trying to incorporate new and old ideas into its transportation infrastructure.
I’m sure everyone is well aware of Atlanta’s traffic woes but significant strides are being taken to offer other options to residents. Progress has been most noticeably evident over the past couple years in areas like Midtown and parts of Downtown. To solidify that statement, the City of Atlanta was recently awarded a bronze level “Walk-Friendly” honor. The “gold level” wasn’t achieved but at least it means the City is making progress and hopefully will continue to work on its walkable options. With more walkability comes positive attributes like less car reliance, healthier communities, supporting local business, more green space, etc. Supporting efforts include the newly paved bike paths around Atlanta and, of course, the always popular and one of my personal favorites – the Beltline.
Another effort to help with transportation that has been getting a ton of press is the streetcar that’s currently being built downtown. Atlanta is looking to its past for inspiration and currently constructing a 2.6 mile path from Downtown to the Martin Luther King Jr. historic district, which is located about a mile away. The streetcar will be the first modern line in Atlanta and hopes to reach North Atlanta in the coming years. The “past” is referenced here because back in the day – before cars – Atlanta was reliant on streetcars as the main source of transportation. Now – due to congestion issues and lack of transportation options downtown – the City has decided to bring back the streetcars to provide a more efficient system and hopefully put an ease to traffic.
Atlanta Streets Alive! is another program that the City is backing – allowing people to get out and just be social. The streets are closed for four hours in a participating neighborhood and the whole objective is to encourage people to take part in outdoor fun by walking or biking. According to the Streets Alive! website the three goals they strive for are to celebrate neighborhoods, expose attendees to outdoor fun, and to encourage people to take the streets by foot or bike.
While Atlanta still has to overcome a lot of obstacles to truly become a walkable city with a plethora of transportation options, progress is happening. It might not be as swift as many may like but as the old saying goes, Rome wasn’t built in a day.
I’m sure everyone is well aware of Atlanta’s traffic woes but significant strides are being taken to offer other options to residents. Progress has been most noticeably evident over the past couple years in areas like Midtown and parts of Downtown. To solidify that statement, the City of Atlanta was recently awarded a bronze level “Walk-Friendly” honor. The “gold level” wasn’t achieved but at least it means the City is making progress and hopefully will continue to work on its walkable options. With more walkability comes positive attributes like less car reliance, healthier communities, supporting local business, more green space, etc. Supporting efforts include the newly paved bike paths around Atlanta and, of course, the always popular and one of my personal favorites – the Beltline.
Another effort to help with transportation that has been getting a ton of press is the streetcar that’s currently being built downtown. Atlanta is looking to its past for inspiration and currently constructing a 2.6 mile path from Downtown to the Martin Luther King Jr. historic district, which is located about a mile away. The streetcar will be the first modern line in Atlanta and hopes to reach North Atlanta in the coming years. The “past” is referenced here because back in the day – before cars – Atlanta was reliant on streetcars as the main source of transportation. Now – due to congestion issues and lack of transportation options downtown – the City has decided to bring back the streetcars to provide a more efficient system and hopefully put an ease to traffic.
Atlanta Streets Alive! is another program that the City is backing – allowing people to get out and just be social. The streets are closed for four hours in a participating neighborhood and the whole objective is to encourage people to take part in outdoor fun by walking or biking. According to the Streets Alive! website the three goals they strive for are to celebrate neighborhoods, expose attendees to outdoor fun, and to encourage people to take the streets by foot or bike.
While Atlanta still has to overcome a lot of obstacles to truly become a walkable city with a plethora of transportation options, progress is happening. It might not be as swift as many may like but as the old saying goes, Rome wasn’t built in a day.
Thursday, November 14, 2013
The Crisis
By J. Mac Holladay, founder and CEO.
I have just returned from two weeks in Spain and Portugal. The trip was another Washington and Lee University Alumni College experience starting in Barcelona and ending in Lisbon. My wife and I extended our trip in Madrid by several days.
The overwhelming feeling I got throughout the trip is the difficult state of the economy in both countries. What we have termed The Great Recession, they call The Crisis. And for them, it is NOT over.
Spain’s official unemployment rate is 26% with little prospects of it coming down anytime soon. That is coupled with a 63% labor force participation rate (the same as the US). While Spain’s exports are increasing, only 4% of the nation’s firms export and many of them are not consistent exporters. The rising Euro threatens this strategy as many of its top customers are in Africa, Asia, and Eastern Europe. One hopeful sign is that over 75,000 Spaniards have received micro-loans (up to 25K euros) from 2008 to 2011 in order to start small businesses. Another hopeful sign for both countries is a recent rise in consumer confidence. Portugal’s confidence index rose 22 points to 55 in the third quarter, Spain’s by 8 points to 56 – confidence in Germany (92) remains notably higher. It was evident too that Portugal has not recovered from The Crisis with countless empty buildings in Lisbon. The tourism sector is providing the majority of new jobs. Many of them are low paying.
It is clear that basic services are being neglected. There is graffiti everywhere, even on some national monuments. That was particularly true in Portugal. When we arrived in Madrid, the street cleaners were on strike and the city was filthy. Even the Plaza Mayor was littered with trash. Neither visitors nor the citizenry will accept that situation for long.
There is no question that the most powerful person in Europe is not in Spain or Portugal but in Germany. Chancellor Angela Merkel has assumed a position of leadership by default in protecting the European Union and its currency. We should not forget that our financial meltdown is what began this terrible cycle. While we have serious and continuing problems in many parts of the country, nothing compares to the suffering and difficulty I saw in Spain and Portugal.
I have just returned from two weeks in Spain and Portugal. The trip was another Washington and Lee University Alumni College experience starting in Barcelona and ending in Lisbon. My wife and I extended our trip in Madrid by several days.
The overwhelming feeling I got throughout the trip is the difficult state of the economy in both countries. What we have termed The Great Recession, they call The Crisis. And for them, it is NOT over.
Spain’s official unemployment rate is 26% with little prospects of it coming down anytime soon. That is coupled with a 63% labor force participation rate (the same as the US). While Spain’s exports are increasing, only 4% of the nation’s firms export and many of them are not consistent exporters. The rising Euro threatens this strategy as many of its top customers are in Africa, Asia, and Eastern Europe. One hopeful sign is that over 75,000 Spaniards have received micro-loans (up to 25K euros) from 2008 to 2011 in order to start small businesses. Another hopeful sign for both countries is a recent rise in consumer confidence. Portugal’s confidence index rose 22 points to 55 in the third quarter, Spain’s by 8 points to 56 – confidence in Germany (92) remains notably higher. It was evident too that Portugal has not recovered from The Crisis with countless empty buildings in Lisbon. The tourism sector is providing the majority of new jobs. Many of them are low paying.
It is clear that basic services are being neglected. There is graffiti everywhere, even on some national monuments. That was particularly true in Portugal. When we arrived in Madrid, the street cleaners were on strike and the city was filthy. Even the Plaza Mayor was littered with trash. Neither visitors nor the citizenry will accept that situation for long.
There is no question that the most powerful person in Europe is not in Spain or Portugal but in Germany. Chancellor Angela Merkel has assumed a position of leadership by default in protecting the European Union and its currency. We should not forget that our financial meltdown is what began this terrible cycle. While we have serious and continuing problems in many parts of the country, nothing compares to the suffering and difficulty I saw in Spain and Portugal.
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