Why the US Economy Needs Immigrants… and Where.

Earlier this month, President Trump made headlines by repeatedly claiming that the United States is “full”—suggesting that, therefore, new immigrants to the US would no longer be welcome.

Journalists, commentators, and others were quick to take issue with the statement. Some argued on philosophical grounds. Others took issue on a more factual basis. In one response, reporters from The Upshot at the New York Times—in characteristically astute form—pointed out that, between declining birth rates and an aging population, prime-working age population is already decreasing in many places around the US. Without immigration, these places will face a decline in their labor force in coming decades.

In other words, not only is the US (and specifically, the US labor force) not full, many places are in serious need of migration.

A few days later, President Trump further confounded critics with the suggestion that migrants to the US would be sent to so-called sanctuary cities (a ubiquitous but legally informal phrase that has been self-designated by many cities, including many of the country’s largest, as well as many counties and several states).

In response, residents and representatives of many of those jurisdictions proudly suggested that they would be happy to accept immigrants. (I was glad to read that Pittsburgh’s own Mayor Peduto said as much.) But amidst all of the rhetoric, I worry that we are collectively paying woefully insufficient attention to important economic issues that underlie the conversation about immigration and workforce.

At Fourth Economy, we encounter workforce issues throughout our work. Attracting, retaining, and preparing the workers of tomorrow is a challenge that touches nearly all of our clients, from the Agricultural System of West Virginia to the Metro Hartford, Connecticut, and throughout the US. The age distribution of the workforce is also an important factor in the framework of our Community Index.

But communities around the country are not affected equally by this ongoing challenge. One way to measure the likely challenges of future labor force needs is to look at the concentration of an area’s labor force by age. The map below shows the percentage of the resident labor force in each US county that is above 55 years-old—that is, people who are active in the labor force, but who are older than what might generally be considered prime working age (25 to 54 years-old).

Communities where the current labor force is highly concentrated among older workers are likely to face increasing economic struggles in coming years. As older workers retire, there will likely be too few younger workers to take their place. Growth will decrease. Employers in some industries will compensate through automation. In other industries, remote work will become more common. But many employers in hard-hit areas will likely relocate or close.

The confounding bit is that the communities facing labor shortages are generally not the “sanctuary” communities where the President is threatening to send more new immigrants. They are instead more likely to be rural, and politically conservative communities, as shown in the scatter plot below. (Whereas many of the countries largest, youngest, and most rapidly growing cities are sanctuary cities.) Indeed, among the counties with greatest share of their labor force over 55 years-old—what we might reasonably designate the communities most in need of new workers—92% voted for president Trump in 2016.

Those facts on the surface are not that surprising. Sure, “Trump Country” is populated by rural communities with older labor forces. But the economic implications are being glaringly overlooked. What is being used to threaten to one part of the country is, in fact, a significant threat to the economic vitality of another.

3 Thoughts for the 20 New Governors

January is an exciting month in many state capitals around the country. There are twenty new Governors being sworn in and starting to announce their teams. There are others who were re-elected and recognize that a second term provides a unique moment to be bold with their agendas. Soon, many will need to submit their first budget request and begin the shift from campaign rhetoric to actual programmatic and policy-driven agenda setting.

We have seen the good, the bad, and everything in between in how these leaders – well, LEAD. Some will seek to lead in a hands-on way, meeting with key constituents and helping to manage the daily agenda of the government. Others will choose to rely on the talented people they hire to carry out the vision.

Most are in agreement that the economy of their state – jobs for residents, happy employers, outsiders interested in moving in – are all important to their political futures. They recognize that a healthy economy makes the other tough issues they must deal with easier.

So how do they ensure economic success?

Think Beyond Transactions

It’s hard to argue against wanting the press release and the photo op with the big scissors or golden shovels. The announcement of an expansion, a new housing development for millennials, or a major infrastructure project, all attract interest and ‘show’ that things are getting done. I’ve seen too many economic development leaders focus on these wins and ignore what’s bubbling beneath the surface in their communities.

The announcement of these transactions must be accompanied by an understanding of the  short and long term consequences. Often these broadcasted wins fall short of the excitement promised. Economic forces change the narrative and project scope as the growth ramps up; or worse, the face-value excitement is for a deal that will strain the community fabric. For example:

Community Win: Job creation!

Community Loss: All of the jobs pay below the community’s living wage.

Too many communities are losing with this rhetoric, and trust in leadership is lost as excitement deflates.

Announcing improvement in areas like place, investment, diversity, sustainability, and talent are the wins that leaders should aim for to create a lasting impact and to maintain trust and excitement about local development.

The Fourth Economy Community Index is a great resource for economic development officials to start looking into key indicators, like those listed above for each county in their state. The Community Index is a free resource that profiles almost every county by using 19 indicators that we think illustrate what is needed for success.

Quality of Place Drives Economic Development

For years now, I’ve been preaching that the best tool for economic development is a vibrant community that supports diverse lifestyles. There are a lot of people who get paid to tell you how bad your tax system is, why you should throw truckloads of incentives at companies and that your red tape is ‘crushing business’. Our research has shown that in a vibrant community those issues become footnotes and not the lead story. People want to be in communities that have culture, recreation, good education, and a welcoming environment. If you have those things people will stay or move to be there and the jobs will follow.

A few years back we researched the most transformed places in the country and found the quality of place to be the common thread. The message and results of that research are stronger than ever.

Power Comes From Collaboration

The history of governors and economic development leaders is filled with those who have tried the Command and Control approach, and those that pursue Collaboration.

The command and control leaders think that the path to success can be dictated. They fail to recognize that economic development is a team effort that can sometimes involve hundreds of organizations and leaders.

The Collaborative crowd recognize this and use their positions to rally, to leverage, to inspire those in their network to pursue a shared vision. The collaborative leaders will have a longer-lasting positive impact. They are the ones that collect awards and are well-regarded by their peers and communities they serve.  

These are my three pieces of economic development advice to our newly-elected officials:

  1. Don’t get caught up in flashy announcements
  2. Pursue quality of place for all citizens
  3. Work collaboratively with organizations and local leaders.

Governors that uphold these standards will set themselves, and their state, apart from the rest. I hope that all leaders, not just governors, can use this advice to help chart a better course and support vibrant communities in their state.

Top 10 Mid-Sized Counties in the US

We see the Fourth Economy Community Index as a starting point for communities, providing a baseline to help understand where they are doing well and see where there is room for improvement.

We envision using the information:

  • When developing an RFP to create specific strategies to improve your community
  • To lead community discussions about areas of relative strength and weakness
  • To inform presentations to stakeholders about the state of your community
  • To compare your community to top ten communities of the same size

The Index model incorporates twenty different indicators in the areas of Investment, Talent, Sustainability, Place, and Diversity. While we know there is no single recipe for economic success, we also know that these five areas are critical ingredients in vibrant communities everywhere.

What do we mean by each of these?

  • Investment: active businesses, access to capital, and investment in physical infrastructure
  • Talent: a growing workforce with education and job skills, equipped to excel in high-wage opportunities
  • Sustainability: transportation, land use, and environmental conditions that promote healthier lifestyles and a healthier planet
  • Place: affordable housing and transportation options that provide access to recreational and cultural amenities
  • Diversity: personal and professional interaction across lines of race/ethnicity, age, and wealth

Top 10 Mid-Sized Counties in the US (50K – 150K)

  1. Minnehaha County, SD (Sioux Falls)

Minnehaha County, South Dakota, has strengths in Place, Investment, and Talent, and has experienced a whopping 8% growth in population over the past five years. Along with the increase in the population of Minnehaha and the Sioux Falls area, the county also has a robust business community and has seen increasing development to meet demand, as illustrated by the blossoming communities around Sioux Falls.

Continue reading “Top 10 Mid-Sized Counties in the US”

Ready, Set, Survey…

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As summer BBQs turn to fall tailgates, how often do you find that neighborly backyard burger flipping leads to discussions on how great your town is or how much better it could be.  Sure there is always room for improvement, but ever wonder how those opinions and impressions sync-up with the facts.  Sometimes we are too hard on our own community when it may really be doing quite well, while other times it is heading for a cliff that nobody seems to notice or care.  In either case, gaining a better understanding of how impressions align with the facts is a good starting point for long-term strategic planning. Continue reading “Ready, Set, Survey…”

Fourth Economy Releases 2015 County-by-County Competitiveness Analysis for Pennsylvania

PA-County-Competitiveness-Analysis-FEC-IndexNew analysis highlights the economic competitiveness of counties across the Commonwealth.

HARRISBURG, PA – Fourth Economy Consulting today announced the release of the 2015 Pennsylvania County Competitive Analysis, an assessment of how counties across the Commonwealth are performing economically. At the core, the analysis is based on the company’s Fourth Economy Community Index, which examines both statistical and qualitative factors at the county-level across the U.S. within the economic factors of investment, talent, sustainability, place, and diversity. Continue reading “Fourth Economy Releases 2015 County-by-County Competitiveness Analysis for Pennsylvania”

National Fourth Economy Community Index Lists Top Ten Large-Sized Counties

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Fourth Economy Consulting announces the latest release of its national community index, listing top counties from across the nation. The Fourth Economy Index highlights those communities ideally positioned to attract modern investment and managed economic growth within the fourth economy.

PITTSBURGH, PA – The latest edition of the Fourth Economy Community Index was announced today, recognizing the top ten large-sized Fourth Economy Communities. These communities—with populations between 150,000 and 499,999—were selected because they represent regions that are poised to achieve sustainable economic growth while attracting people and investment.


Continue reading “National Fourth Economy Community Index Lists Top Ten Large-Sized Counties”

National Fourth Economy Community Index Lists Top 10 Mega-Sized Counties for 2015

141204-FECIndexFourth Economy Consulting announces the latest release of its national community index, listing top counties from across the nation. The Fourth Economy Index highlights those communities ideally positioned to attract modern investment and managed economic growth within the fourth economy.

PITTSBURGH, PA – The latest release of the Fourth Economy Community Index (FEC Index, #FECIndex) was announced today listing the nation’s top ten mega-sized Fourth Economy Communities. These communities are recognized as the regions ideally positioned to attract modern investment and managed economic growth among all regions with a population greater than 500,000 people.
Continue reading “National Fourth Economy Community Index Lists Top 10 Mega-Sized Counties for 2015”

Three Lessons Learned in the Past Three Years

130909-Turning-ThreeWe are celebrating our 3rd corporate birthday this week and it provides an opportunity to reflect on what we’ve learned. First, the pace of economic and community development continues to quicken as major global shifts drive business and social planning. Three years ago we were all worrying about the long-term impacts of the great recession, as unemployment was 9.6% with little sign of an end. Today, in many sectors we are working on strategies to not just keep the domestic jobs growing but also to bring them back by ‘making it in America’. As we have been saying for the past three years, the economic and community development toolbox must expand to include new models of planning for place, new types of infrastructure, and most importantly the people in our communities. Continue reading “Three Lessons Learned in the Past Three Years”

National Fourth Economy Community Index Lists Top 10 Large-Sized Counties for 2013

Fourth Economy Consulting announces the latest release of its national community index, listing top counties from across the nation. The Fourth Economy Index highlights those communities ideally positioned to attract modern investment and managed economic growth within the fourth economy.

PITTSBURGH, PA – The latest release of the “Fourth Economy Community (FEC) Index” was announced today listing the nation’s top 10 large-sized Fourth Economy Communities. These communities are those ideally positioned to attract modern investment and managed economic growth.

The “fourth economy” characterizes the most recent phase of our nation’s economy, reflecting a combination of the previous three to include agrarian, industrial, and technological. This new index is intended to serve as a dashboard for community stakeholders to gauge their capacity to attract and retain modern investment.

“There has never been a more important time for economic and community developers to rethink how we measure economic success,” said Rich Overmoyer, CEO of Fourth Economy Consulting, the economic development firm that created the index in 2011.  “Recent articles in the New York Times and The Atlantic on the use of state incentives to lure big companies reinforces that an outdated model of economic development needs to be evolved to one that considers a broader set of community investment opportunities. The Fourth Economy Index is an attempt to highlight what makes stronger, economically viable communities,” Overmoyer added. Continue reading “National Fourth Economy Community Index Lists Top 10 Large-Sized Counties for 2013”

Community Development in the Fourth Economy: A Year in Review

Our second year as a company has been one of increased community development related work. Much of the work that Fourth Economy has been engaged in has been around traditional, tech-based, and education-based economic development. However, in doing that work, we have realized that one critical component intersects all of those – community development. That realization led to the creation of my position and we have since been working hard to facilitate connections between community and economic development. Continue reading “Community Development in the Fourth Economy: A Year in Review”