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.

Tracking Retail Closures

At Fourth Economy we have been tracking the news about retail store closures.  These store closures often can leave significant redevelopment challenges for local community and economic development officials. In future posts we will highlights some of the ways that communities are dealing with these buildings. According to Business Insider more than 5,000 store closures have been announced so far, with the potential for nearly 9,000 store closures by the end of 2017. These store closings are the most physical manifestation of the challenges facing the retail sector.

As a resource to the community, Fourth Economy has started to identify and compile a list of retail store closings. Tracking down the locations has proven to be a challenge, but we have identified 1,768 of these closings so far.  You can see the results in the above Working Map of Retail Closings, created in Tableau Public.  We are providing this as a resource to the community and will continue to update it as closings are announced and locations identified.  If you know of any closings in your area, please send them to engage@fourtheconomy.com and we will update the map.

Stay tuned for more.

Co-authors: Jamie Reese & Katie Grauer

Measure Up!

Paytas-Blog1-Web-05-2016The ripple effect of big data and analytics is hitting economic development. There has been a resurgence in new tools that package economic data to make it more accessible to a wider audience. A lot of these tools are using aggregated data that is useful but it is often not granular enough to inform an individual EDO or city about how to improve its economy and what is working.

To do that we need better data that is more granular with details about specific projects and specific companies. Big Data relies on and pushes for this kind of transactional data. Much of this kind of economic data does exist but it is walled off by various bureaucratic walls. We are a long way from incorporating Big Data into economic development, and there are real risks with a pure Data Analytics approach to understanding economies and creating development strategies. Continue reading “Measure Up!”

What Is Not Being Addressed that Will Kill Your Economic Development Strategy

BooksforBlogAt this point I think we are all familiar with the struggles facing Detroit Public Schools, at least on the surface: mushrooms growing in schools, teacher strikes, financial crisis. However, as detailed by this incredibly thorough and thoughtful report by LOVELAND Technologies, 200 years worth of poor decision-making led Detroit to where it is today. This speaks to the need for a new approach to public accountability in our education system. Recognizing the critical role of public education to economic development, in Nashville, it has been the Chamber that has been stepping up to provide that platform for accountability by conducting annual holistic assessments and concrete recommendations for improvement. Continue reading “What Is Not Being Addressed that Will Kill Your Economic Development Strategy”

What? Me Worry?

What-Me-WorryWhen people are looking for a safe place to live, they overestimate the danger from low-risk threats such as crime.  No one would say that they want to live in a high crime area.  The reality is that nationwide there are only 5.1 deaths per 100,000 people from homicide. Crime is highly distorted because the reporting of crime rises in areas with more people and therefore more full-time police officers.  Perceptions and fear about crime are always much worse than the actual frequency and risk of crime.  Continue reading “What? Me Worry?”

Ready, Set, Survey…

Survey-Tailgate

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…”

Survey: Environmental Factors and Site Selection

Air-Quality-SurveyWe are asking corporate real estate managers, location consultants and economic developers to identify how air quality affects location decisions.

 

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As an incentive, all respondents completing this short survey will have an opportunity to win a $200 prepaid Visa card. All respondents will also have access to the final results.

We appreciate you taking 10-15 minutes to complete the survey by Monday, October 17, 2015. Results will be used in summary form only in order to protect confidentiality. Continue reading “Survey: Environmental Factors and Site Selection”

The Future of Work [Podcast]

Workforce-Disconnect

In September, Dr. Jerry Paytas was featured on Workforce Central, hosted by the National Association of Workforce Boards‘ President/CEO Ron Painter. Workforce Central features public & private sector leaders in workforce development, education, business and economic development discussing key workforce issues and investment strategies to help America compete globally.

Continue reading “The Future of Work [Podcast]”

Beware of Black Boxes

Beware-Black-BoxA variety of “black box” applications are being introduced for economic and data analysis.  These tools claim to offer intelligently organized data that provides neatly packaged insights.

On the positive side, these tools are very helpful and they are democratizing economic and data analysis.  They enable the user to see a variety of indicators with a few clicks, or do drill down into various industry sectors.  They also enable users to easily combine and compare indicators. Continue reading “Beware of Black Boxes”

Working as a Freelancer

Freelance-Worker-DeskMore Americans are becoming freelancers, and enjoying the freedom of working independently and making their own decisions. Various studies predict that over 40 percent of the American workforce will be freelancing by 2020. Freelancing is what the “American Dream” is all about for many people. Basically, anything you might consider doing in your own business, you can do on a freelance basis under your own name.  Freelancers can be asked to do just about any kind of work you could imagine with no expectation of a permanent or long-term relationship with a single employer. Continue reading “Working as a Freelancer”