NewGeography.com blogs

Here at ZenPayroll, we care a lot about how compensation is done, and the effect compensation can have on the relationship between employers and employees. Using the employment data we have as a payroll provider, we decided to look at whether the 1099 economy, which has garnered quite a bit of media attention recently, is really growing as fast as people think.

The short answer is that over the past year, the ratio of independent contractors to full-time employees has meaningfully risen among small and medium-sized businesses in states and major metropolitan areas across the country.

The nature of work is changing given the decline of lifetime employment. Today, very few people plan to work for the same company their whole life, and people often have several jobs at one time. As a result, and as shown by ZenPayroll's data, more small business owners are employing contractors as a part of running their business. There are a number of other reasons for this general trend toward a more flexible work structure.

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First, employees want to have more choices when it comes to where and when they work, but also who they work for. Millennials in particular are frequently asking themselves whether they're fulfilled by what they're doing. Jess Ostroff, founder of a full-service virtual assistance agency called Don't Panic Management, said that some of her contractors in New York City are aspiring actors, and they do contract work to support themselves as they pursue longer-term passions and ambitions. 

Others do contract work purely for the flexibility -- one of the first contractors to work for the Don't Panic Management team is a mother of three who has her own cooking show and also runs a photography business. She supplements those jobs by contracting so she can earn money while spending time with her family.

For some entrepreneurs, hiring independent contractors is key to their business. Lina Pakrosnyte is the founder and owner of UrbanLeash, a professional pet care company based in Chicago. There are four full-time employees on her team, but she works with over 30 contractors for tech and marketing help, as well as dog walking and cat sitting. With the high turnover in pet care professionals, Lina needs to keep finding contractors to serve her UrbanLeash clients.

I've also talked to many small business owners who prefer having a remote or distributed workforce. Adam McLane, founder of a youth ministry resources company called The Youth Cartel, is one example. Because his business requires expert writers and public speakers, he works with over a hundred contractors from all over the country to produce content and events.

After the economic downturn several years ago, many people who lost their full-time jobs found contract and part-time work as a way to fill that gap. When times are uncertain, employers also tend to prefer contractors. With the government promising to crack down on employers who misclassify their workers as contractors rather than employees, it's important for business owners to know the distinction between the two. We published a post recently on the ZenPayroll blog to help small business owners avoid misclassifying their workers. 

The future isn't set in stone, and there will be ongoing debate about the responsibility employers have towards their workers, whether they are employees or contractors. It is important to care of your people if you want to attract and retain great talent.

The Responsive City: Engaging Communities Through Data Smart Governance

by Stephen Goldsmith and Susan Crawford

Technology, and especially the use of data and analytics, has been transforming the way cities manage service delivery. Former Indianapolis mayor New York City deputy mayor Steve Goldsmith, and his colleague at Harvard Susan Crawford, recently wrote a book called “The Responsive City” looking at this technology revolution. I recently read the book and posted some thoughts in a review posted at City Journal. Here’s an excerpt:

The book chronicles more than just technology’s potential; it also highlights what some local governments have already achieved with innovative approaches. After several fires resulted in the deaths of five people, New York City built a system to identify buildings at high fire risk, using predictive models and integrating data from multiple sources. City inspectors are now aggressively targeting those buildings for upgrades. To fight its rat problem, Chicago is using data analytics to predict where rats will gather, instead of waiting for resident complaints. Boston has developed a civic customer-relationship management system, with mobile-device apps, to link residents more easily with city services. Mimicking the way that Yelp collects restaurant reviews, Washington, D.C. uses a website to solicit ratings of city services. Cities around the country are adopting open-data portals.

…

Goldsmith and Crawford are candid about the challenges facing their responsive-city vision. Progressive-era reforms designed to eliminate corruption also curtailed government employees’ discretion, leaving them with narrowly defined roles and limited ability to respond effectively to real-world problems. Rigid job descriptions, such as “temporary full-time permanent intermittent police officer,” are common in cities like New York, which has more than 2,000 such classifications. Procurement rules require that detailed specifications be prepared in advance, unlike in the private sector, where technology and other solutions are often developed iteratively. Government’s rigid contracting processes make it tough to respond to findings during development.

You can click over to City Journal to read the entire thing

I also sat down with Steve Goldsmith recently to talk about the book, and some of the challenges and pitfalls of this technology-drive approach. If the audio embed doesn’t display for you, click over to listen on Soundcloud.

We have posted population data for the nation's major metropolitan areas for censuses from 1900 to 2010 and as estimated in 2013. These data are use the current (2013) boundaries to define metropolitan areas. There is no consistent list historical listing of metropolitan area populations using the commuting criteria that define the 2010 and 2013 metropolitan areas. Thus, in using the data in this new report, caution should be employed.

Efforts are underway by the Taiwan government for a government led restructuring to avoid bankruptcy (Plan to stop Taiwan's high-speed rail going bust set for review). Since opening in 2007, this privately financed and operated system has been plagued with ridership well below projections. The Taiwan experience is consistent with the research showing that ridership on high-speed rail lines has been frequently over-projected.

Minister of Transportation and Communications (MOTC) Yeh Kuang-shih offered this sobering assessment:

“This is not the best time to address the financial problems, but it is the last window of opportunity. The Taiwan High Speed Rail Corp will definitely go bankrupt if the problems are not addressed by the end of the year. The only other solution would be a government takeover. If the company files for bankruptcy and the government is forced to take over operation of the system, the banks will probably collect on their loans, but neither large nor small investors will get anything back.”

Kuomintang Party legislator Lin Kuo-cheng said that the "debt" and "accumulated losses" mean that the Taiwan high speed rail line is "broke."

The doubtful claim that low density US cities impose a cost to the economy of $400 billion is countered by their being the most affluent in the world. Nine of the top 10 cities in GDP per capita are in the US and more than 70% of the top 50. The highest GDP per capita city in the world is one of the least compact, Hartford, with an urban population density among the bottom 10 out of more the than 900 urban areas larger than 500,000 (See here and here).

Mobility is an important driver of economic performance. US cities have less traffic congestion, and shorter work trip travel times than their international peers (Los Angeles has the shortest work trip travel times of any megacity for which there is data). The key to this productivity is more dispersed residential and employment locations (less than 10% of jobs are downtown) and the less intense traffic congestion that is associated with such development. In the US, just as in Western Europe, commuting by car is much faster than by transit. The coming fuel efficiency improvements will narrow or eliminate the gap between personal vehicle and transit GHG emissions per passenger kilometer. US fuel efficiency standards are projected to reduce gross car GHG emissions by more than a quarter by 2040, according to the US Department of Energy. That's before any de-carbonization.

The US has some of the best housing affordability in the world (excluding cities like San Francisco and Portland, where politically correct policies raise prices, lowering the standard of living and increasing poverty). The miniscule reductions from favored urban policies are exceedingly expensive per tonne and incapable of making a serious contribution to GHG emission reduction.

Maintaining the standard of living and reducing poverty requires cities that are mobile and affordable. It is important that GHG emissions reductions be chosen for their cost effectiveness, rather than consistency with expensive academic theories that long predate GHG emissions reduction concerns.

This piece was posted to comments at The Economist.

What’s often forgotten in politics and governance is municipalities are the creation of state legislatures.  A good deal of the population growth in major cities in the second half of the nineteenth century was due to annexation. One of the best examples is New York‘s amazing growth due to annexing Brooklyn. Few people are talking about it but it’s time to consider smaller political units. As Detroit struggles with failure of bankruptcy, the geographical size of the Motor city is becoming a major issue.

Detroit’s long decline eventually put it a federal bankruptcy court. The reasons are numerous but the reality is here.  How Detroit exists from bankruptcy court is now an issue. Putting Detroit on a sound economic footing is essential to preventing another bankruptcy. The Detroit Free Press reports:

The investment banker representing the City of Detroit had talks with billionaire real estate investor Sam Zell and investment firm the Blackstone Group about selling them the city’s vacant property — but the investors weren’t interested, the Free Press has learned.

The revelation comes as the value of Detroit’s abandoned and blighted property — which the city considers assets in its Chapter 9 bankruptcy — is in dispute.

Creditors argue that city-owned property is a source of significant value that is being ignored in the city’s bankruptcy restructuring blueprint, called a “plan of adjustment.” The creditors argue the approximately 22 square miles of vacant or blighted property the city owns could be sold — with the proceeds distributed to creditors and even reinvested in the city.

But Ken Buckfire, president of the city’s investment banking adviser Miller Buckfire, testified that city-owned land “to some extent has negative value,” according to a deposition transcript obtained by the Free Press.

One way to interpret the comment about “negative value” is where the land is located. If Michigan’s state legislature re-drew Detroit‘s geographical boundaries, investors would be more interested in the land. A new municipality, without Detroit’s corrupt and expensive politics would be a major reform. Detroit as it exists today isn’t viable for job growth and a stable population. Detroit’s local politicians and special interest groups would obviously fight any changes in geographical boundaries in Michigan’s state legislature because a declining Detroit was a way to plunder taxpayers. But Michigan taxpayers need to start asking themselves: is Detroit’s 143 square miles a viable long term enterprise?

Maps have been published illustrating the City Sector Model functional urban classifications for the 52 major metropolitan areas in the United States. The maps are available at Demographia City Sector Model Metropolitan Area Maps.

Functional Classifications of Metropolitan Areas

The City Sector Model allows a more representative functional analysis of urban core, suburban and exurban areas, by the use of smaller areas, rather than municipal boundaries.

The nearly 9,000 zip code tabulation areas of major metropolitan areas are categorized by functional characteristics, including urban form, density and travel behavior. There are four functional classifications, the urban core, earlier suburban areas, later suburban areas and exurban areas. The urban cores have higher densities, older housing and substantially greater reliance on transit, similar to the urban cores that preceded the great automobile oriented suburbanization that followed World War II. Exurban areas are beyond the built up urban areas. The suburban areas constitute the balance of the major metropolitan areas. Earlier suburbs include areas with a median house construction date before 1980. Later suburban areas have later median house construction dates.

A New York Times article by Sam Roberts indicates that

"According to Census Bureau estimates released last week, in the year ending July 1, 2013, the city recorded the third consecutive gain in its non-Hispanic white population.

During that same period, the city gained more people than it lost through migration. Neither of those gains has probably happened since the 1960s, according to demographers."

It is true that net migration, domestic and international, was positive between 2012 and 2013. However, net migration was also positive in the years ended 2012 and 2011, according to Census Bureau data.  Among the three recent years, the lowest net migration total was in 2013 (Table).

Further, net domestic migration has continued to be negative. The city has lost a net 187,000 domestic migrants in the first three years of the decade. This is an average of more than 60,000 annually. This is, however, an improvement from the 2000s, when net domestic migration averaged a minus 135,000.

Today, there are about 30 megacities in the world, where more than 10 million residents live. The largest is Tokyo, at about 38 million. Recent announcements by the government of China could lead to the worlds' first gigacity (for want of a better term, used here to denote a city of more than 100,000,000 population, see note). According to the Nanfang Insider, the economic integration of megacity Beijing, megacity Tianjin and eight cities (prefectures) in the province of Hebei would result in a city of 130 million. China Daily is a bit more circumspect, indicating that the Beijing supercity would have only 85 million.

The giga/super city would be tied together by new rapid transit lines and highways and surrounded by the 7th Ring Road, adding to the six that have already been built. The 7th Ring Road would consist of two roads, circling most of the area, and extending to a combined 850 miles (2,200 kilometers). By comparison, London's M-25 is 117 miles long (188 kilometers), the Moscow MKAD 68 miles long (109 kilometers) and the Washington beltway is 64 miles long (103 kilometers)

The giga or super city is not likely to really be a city, because it would be much larger than a labor market (this is why the near continuous urbanization from Boston to Washington or Tokyo to Osaka-Kobe-Kyoto is not a city). The estimated land area is 67,000 square miles (175,000 square kilometers). This is nearly as large as Cambodia or the state of Oklahoma. Providing the point to point daily commuting in such a large area is well beyond the capability of any affordable transportation system. Star Trek like teleportation could do the trick. Meanwhile, however, there is plenty to be gained from the economic integration of this large area.

Graphic of the new 7th ring road from nanfang.com:

Note: Technically, a gigacity would need 1 billion people (10 to the 9th power). However, megacities, with their 10 million minimum are also wrongly named. A city with a mega city would have 1,000,000 people (10 to the 6th power). Artistic license justifies the gigacity term under the circumstances. Besides, with the slowing growth of world population, it seems unlikely than any city will achieve a population of 1 trillion.

It seems that Destination LI, “a nonprofit community building and educational organization dedicated to helping people create and sustain vibrant centers” on Long Island, has been quietly busy in recent months.

Recently, the group released a survey, which, to nobody’s surprise, shows that millennials are not exactly thrilled with Long Island’s housing options.

The solution? Those “vibrant” walkable communities that have been pitched so many times before. The survey also touched upon Long Island’s need for jobs that match millennial skillsets and salary expectations, two critical issues that policymakers must address.

In a nutshell, “the survey, conducted on social media web forums between Feb. 27 and March 24, drew 413 respondents.” To solicit responses, the group used sites such as Facebook, Twitter, LinkedIn, Reddit and others. Seventy-five percent of those who participated said that they either “agree” or “strongly agree” that Long Island’s housing options limit their ability to stay, with 58.7 percent saying they currently live with parents or relatives.

For perspective, consider this: According to U.S. Census data from 2010, there were 478,988 millennials in the Nassau-Suffolk region. Destination LI’s survey of 413 represents 0.08 percent of the sample size – far from a representative sample of that segment of population. Given the large gap between population and those surveyed online (which, by surveying standards, is a poor solicitation method), it’s important to take the results for what they are – anecdotal, but still an important commentary. Long Island clearly has issues with providing housing, but we’re going about it the wrong way.

The survey brings to light significant questions concerning Long Island. Is regional housing availability holding millennials back, or is it Long Island’s stagnant economy? The survey infers that walkable apartments keep millennials here, but what about affordable single-family homes? Are apartments the only housing option for this age group? Is more development the answer to our regional woes? Are the survey’s findings legitimate given the methodology?

Finally, the big question remains: Should developers be driving the regional conversation on housing needs?

The answer to any of these questions is up for debate, but the last one should resonate. Have Long Islanders become so apathetic that they now are reliant upon stakeholders to conduct surveys that not only get ample press coverage, but are sure to influence policy decisions on the regional level? Shouldn’t planners be conducting these studies, with their recommendations being based off appropriate methodology and professionalism?

Our policy solutions are only as good as the data that informs them. With land-use, the cost of failure is too expensive and repercussions too severe and far reaching to rely on stakeholder-driven solutions. We all are leaders in that we have the power to collectively shape our community. Let’s take back the reins and give our problems the thoughtful analysis they deserve.