NewGeography.com blogs

Could the next zone of opportunity exist in the middle of the country? Census unemployment figures seem to signify this notion, especially in the Great Plains.

State-wise, November 2010 unemployment rates were lowest in North Dakota at 3.6%; South Dakota at 4.6%; Nebraska at 4.9%; Kansas at 6.5%; and Iowa at 6.8%. Compare these numbers to the ever-growing Sunbelt states where unemployment is at its most dismal with Arizona at 9.6%, California at 12.4%, and Nevada at a depressing 14%.

The top ten cities with the lowest unemployment rates are all found in the Midwest and the Great Plains, with the exception of Burlington, VT and Portsmouth, NH. The strength of the growing, younger manufacturing industry that escaped the huge manufacturing employment declines in the 80s and 90s may be fueling the prosperity in the plains.

Upon closer inspection of the economies of these cities, a few common denominators are revealed. Health care is a prevailing industry recurrent across many of the cities. Unsurprisingly, agribusiness and manufacturing also dominate, along with insurance services, food processing, and, in some cases, higher education.

Metromonitor prepared this interesting piece using data from the Bureau of Labor Statistics allowing one to see unemployement rates throughout the Midwest and the Rust Belt that appear to be on the rebound. The bottom map is of particular interest: One year’s growth has shown a decrease in unemployment throughout much of the Rust Belt, while cities in California and Florida consistently flounder. As far as overall performance, many cities in the Midwest – and much of the Great Plains – remain strong out of the recession and are comparable to the sturdy Texan cities that possess surging economies.

Perhaps these urban centers across the Midwest, and especially the Great Plains, should be viewed as models for effective economic development. Large cities throughout the Great Plains offer integral services not found for miles and serve as regional havens for essential activities such as health care, education, business services, and food processing. Meanwhile, cities with declining industries, exploding real estate prices, and a surplus of workers suffer. Areas such as the Sun Belt, California, Florida, and some Northeastern cities bare the weight of this dilemma. Our focus should rest on the well-grounded economies of the often-ignored flyover states, instead of those on the crumbling coasts.

Remember cigar-smoking union leaders, those portly white guys who sat around the pool at AFL-CIO conventions in Miami Beach?

We called them the “old guard” and blamed them for allowing what looked at the time to be a very foreboding decline in union density, power and influence.

When I started in the Labor Movement in the 1980s, the struggle to replace that generation with smart, progressive and militant leadership was well underway.

Now many national unions and locals around the country are led and staffed by a new breed, schooled in strategic thinking and coalition-building, and committed to organizing members for action and recruiting workers into the ranks.

The result:

The plunge in the number and percentage of union members continues without a blip.

The latest stats show 14.7 million union members in America; that’s 11.9 percent of the “wage and salary” workforce, a drop of almost a half a percent in one year and more than eight percent since 1983, when the rate was already tumbling.

I’m not accusing my friends and colleagues of incompetence, lack of commitment or anything of the kind.  In fact, many have been – and are – involved in heroic struggles to reinvigorate and rebuild the movement.

But the labor relations framework in the U.S. – effectively manipulated by a sophisticated union avoidance industry – makes union growth almost impossible.

For true believers – you know who you are – a fleeting moment of euphoria ended two years ago when labor law reform was buried by a senate filibuster and a white house with other priorities (the president, by the way, made one oblique reference to unions in his speech to congress this week: the UAW’s support for his free trade pact with South Korea).

Another daunting challenge facing the labor movement is the growing gap between the number of public sector union members (7.6 million) and those union members working in the business economy (7.1 million).

How do we convince nonunion working class taxpayers to support government employees being scape-goated for their “budget-busting” pension payouts?

Finally, a couple of interesting numbers on union distribution by states:

Of the big ones, California has the most members (2.4 million), New York has the highest percentage (26 percent).  But two “outlier states” also share the spotlight:

Heavily democratic Hawaii (23.5 percent) is no surprise.

But, ironically, the republican state of Alaska finishes second in union density (24.8 percent).  It’s where big oil pays union wages, enabling our giant state’s ethic of  “up by your bootstraps” individualism.

This first appeared at laborlou.com

The city of Kalamazoo in southwestern Michigan may be a shining pinnacle in an otherwise economically withering state. The secret may lie within the city’s well-educated population and its incentives to support an enlightened oasis. For 25-year-olds and older in Kalamazoo, 84.2% have finished high school or higher; 32.7% have accomplished a bachelor’s degree or higher; and 14.4% can boast a graduate or professional degree.

Compare this to Detroit’s much more bleak statistics: 69.9% of 25-year-olds have graduated high school; 11% have attained a bachelor’s degree; and a petty 4.2% have acquired a graduate or professional degree. The percentage of unemployed in Detroit is 13.8%, while 12.5% are unemployed in Kalamazoo.

These numbers reflect a well-educated workforce that hasn’t had such an apparent impact from the declining industries in the area. It seems that the answer may be in Kalamazoo’s education services. The most common industries for men and women are educational services, where 13% of men and 17% of women are employed. The area also employs 4% of men and 4% of women in professional, scientific, and technical services, which may lend the city with a more developed economy. Universities such as Western Michigan University and Davenport University help diversify Kalamazoo’s employment base opposed to the historically more manufacturing dependent Michigan .

Unsurprisingly, Detroit’s leading industry for males is transportation equipment (includeing auto manufacturing) at 15% of the workforce. The share in educational services is much lower than Kalamazoo with only 4% of males and 10% of females employed in the area. Figures for professional, scientific, and technical services were not listed.

Kalamazoo also has incentive programs for students in the local school systems. The “Kalamazoo Promise” is a program funded by anonymous donors who provide scholarships for students who attend and finish high school in Kalamazoo. Scholarships can total up to 100% of the student’s college tuition. The program started in 2006 and has likely contributed to the area’s 3% growth in student enrollment. In 2008, Detroit began a similar program in hopes of replicating the small economic boom that the Kalamazoo Promise instigated.

If the city can leverage its higher education institutions and its surging base of high school students entering college, it could ultimately become a prime example of a community improving itself through education. Incentives and opportunities provide citizens with a solid and encouraging way out of a weakening economy inthe state while still providing a standard that the rest of Michigan can attempt to replicate.

For more Kalamazoo facts and figures, visit http://www.city-data.com/city/Kalamazoo-Michigan.html.

This should be the year that China's intercity expressway system exceeds the length of the US interstate highway system. China's expressways are fully grade separated, freeway standard roadways, but unlike most interstate highways, have tolls.

The China Ministry of Transport indicates that, as of the end of 2010, China had 46,000 miles (74,000 kilometers) of expressways. Currently, the expressways of China have a total length about 1,000 miles (1,600 kilometers) less than that of the US interstate highway system. In the last year, 5,500 miles (9,000 kilometers) of new expressways were completed. If that construction rate continues, China's expressway system would exceed the interstate system length late in the first quarter of 2011.

By 2020, China expects to have 53,000 miles (85,000 kilometers) of expressways. This compares to the US total of approximately 57,000 miles (92,000 kilometers), including non-interstate freeways. However, the China expressway mileage does not include the expressways administered by provincial level governments, such as in Beijing (with its five expressway ring roads), the extensive system of Shanghai and the expressways of Hong Kong. No data is readily available for the lengths of these roads.

Now it is possible to travel, uninterrupted (except for traffic jams in the vicinity of the largest urban areas), from north to south from near the Russian border, north of Harbin (in Heilongjiang or Manchuria) to near the resort island of Hainan, well south of Guangzhou, Hong Kong and the Pearl River Delta and not far from the border with Viet Nam. This is a total distance of 2,700 miles (4,400 kilometers).

East to west travel without signals is now possible from Shanghai to near the Myanmar (Burma) border, beyond Kunming, a distance of 1,800 miles (3,000 kilometers). In the longer run, it will be possible to travel from the Russian border in Manchuria to the border of Kazakhstan in Xinjiang, a distance of 3,500 miles (5,700 kilometers).

The expressway system is indicated in the map below. The blue the routes have been opened and the red routes are yet to be completed.

“In public Congress hugs them, in private they mug them!” So said the late Milt Stewart, one of the architects of the Small Business Innovation Research (SBIR) Program in the 1980s and a renowned advocate for America’s small businesses.

I first met Milt in 1992 and eagerly joined forces with him and others from business and government to generate more research opportunities for America’s small businesses – then and now, the most potent force for innovation and job creation on the planet.

Unfortunately, small business continues to get what Fred Patterson, echoing Milt Stewart, calls the "Huggem-Muggem": lots of lip service but very little productive legislative action that facilitates their creation of jobs.

Case in point is the current plight of the SBIR program, which has received considerable bi-partisan support in the Congress for more than 25 years. The Senate of the 111th Congress wanted to reauthorize the SBIR but their counterparts in the House leadership played the old "Huggem-Muggem" game.

The outgoing Chairman of the House Small Business Committee, Nydia Velazquez (D-NY), blocked all efforts to openly debate many Small Business Administration (SBA) initiatives, including the SBIR Program, before her committee. The incoming committee chair, Sam Graves (R-MO), has previously aligned with her to thwart SBIR reauthorization. Their opposition to reauthorization appears to center on the fact that companies which are majority-owned by venture capital firms are now ineligible to apply for SBIR funds.

The National Small Business Association puts the facts on the line. “Despite the remarkable achievements of SBIR, federal R&D funding is still skewed against small businesses. Today, small R&D companies employ 38 percent of all scientists and engineers in America. This is more than all U.S. universities and more than all large businesses. Furthermore, these small companies produce five times as many patents per dollar as large companies and 20 times as many as universities—and more small-business innovations are commercialized. Yet small companies receive only 4.3 percent of the federal government’s R&D dollars. The SBIR program provides more than half of this amount.”

If our country is serious about innovation, competitiveness and job creation it makes sense that we put our resources where they have the most impact. Instead, we are served up the same old tired "Huggem-Muggem" game by those who profess to be advocates for small business.

I've said it before, and will say it again- instead of weakening the SBIR program we should be doubling, if not tripling, our country’s investment in the program. At a minimum a $5 billion SBIR program should be put in place. It will give us much more job growth than the Treasury bailouts of domestic banks and, as we now know, foreign banks too. The SBIR program represents both what America wants and needs in these times of economic stress: job growth driven by small business innovation.

Delore Zimmerman is President of Praxis Strategy Group and publisher of newgeography.com

In expressing its opposition to the California High Speed Rail line, Washington Post editorialists noted that critics of the now approved Borden to Corcoran segment have called the line a "train to nowhere" ("Hitting the breaks on California's high speed rail experiment"). The Post call this:

...a bit unfair, since some of the towns along the way have expensively redeveloped downtowns that may now suffer from the frequent noise and vibration of trains roaring through them.

What the Post missed, however, is that a "train to nowhere" is not a "train through nowhere." There is no doubt that the high viaducts and the noisy trains have potential to do great harm to the livability of the communities through which it passes. This is one of the reasons that the French have largely avoided operating their high speed rail trains through urban areas, except at relatively low speeds. Stations, except for in the largest urban areas, are generally beyond the urban fringe and towns are bypassed. Yet, one of the decisions not yet made in California, for example, is whether the town of Corcoran will be cut in half by the intrusive, noisy line.

There would be nothing but grief for the towns through which the California high speed rail lines would pass, but not stop (this is not to discount the disruption the line will cause even where it would stop, such as in Fresno). It may be a train to nowhere, but it is a train through places that people care about.

"Spend first, answer questions later." So concludes a critical editorial in the January 12 edition of the Washington Post, commenting on California's proposed $43 billion High-Speed Rail program. The Post editorial, along with a January 11 article in the New York Times (both of which we reprint below), are emblematic of the increasingly skeptical press and public opinion concerning the fiscal and economic soudness of the Obama Administration's high-speed rail initiative. "It's unclear that the public benefits attributed to high-speed rail...would outweigh the inevitable operating subsidies," observes the Washington Post, confirming the conclusions already reached by the states of Wisconsin, Ohio and Iowa.

Other states and their freight railroad partners seemingly are having similar second thoughts, judging from the parties' lack of progress in reaching cooperative track-sharing agreements. Conspicuous among them is the state of Florida which has been promised a $2.4 billion federal grant to build an 84-mile "high-speed" line from Tampa to Orlando. That line, by all evidence, is too short to produce any meaningful time savings over car trips along a parallel interstate freeway. Moreover, as the New York Times article points out, the proposed line has scored among the lowest in terms of projected ridership in a study of the nation's high-speed rail corridors recently published by America 2050, a national urban planning initiative (www.America2050.org). Its authors cited the low population and employment density of the cities at either end of the line (and a lack of internal transit distribution systems, we might add) as the reason for low ridership estimates and the line's low score. The article notes that "the report represents another blow to the Florida high-speed rail network after a report from the Reason Foundation found the project could cost Florida taxpayers $3 billion."

As the Washington Post editorial observed, "The president has a vision of a national high-speed rail network almost as grand as the interstate highway system. We have our doubts about the ultimate feasibility of this vision, in part because in much of the country passenger rail can't compete with car travel by interstate highways." The editorial could also have noted one other fundamental difference. Pres. Eisenhower's ambitious plan for the interstate highway system was placed on a sound fiscal basis by being backed by a user fee (aka the gas tax). Mr. Obama's high-speed rail vision, on the other hand is funded by a one-time $8 billion federal stimulus grant with no visible source of continued support. Indeed, the high-speed rail initiative faces little prospect of sustained congressional funding, it has yet to show evidence of attracting private capital, and it exposes the taxpayers to continued operating subsidies,as Amtrak experience suggests.

No wonder Pres. Obama's vision is increasingly being questioned, even by the mainstream media.

Last week NYT columnist and economist Paul Krugman wrote a very popular column pointing to Texas' revenue shortfall and declaring it an example of the failure of conservative government.  I found the whole piece a muddled mess and dismissed it, but you can't believe the notes I've gotten from people requesting a response.

The thing is, I don't really get his point. The bad national economy was going to cut state revenues no matter what. Is he saying we'd be better off if we had a fat government with easy cuts, instead of a lean government with tough cuts?  How much sense does that make?

The nice thing about delaying my response is that others have already made great cases against the column (saving me the work).  Kevin Williams at the National Review is a bit sarcastic for my tastes, but makes several great points - the main ones being:

Bill Watkins here at New Geography also lays into Krugman's fuzzy thinking:

"People are not as stupid as many Nobel Prize winners might think; they move for opportunity, not just for cheap houses or low-paid work."

Then he comes up with a great new acronym:

"A business moves to or expands in a region based on a whole host of reasons. These include available infrastructure, resource availability, market size and location, labor supply and costs, worker productivity, facilities costs, transportation costs, and other costs. Those other costs include what I call DURT (Delay, Uncertainty, Regulation, and Taxes)."

Conveniently, the Wall Street Journal made the case for Texas' growth and opportunity the next day:

WSJ.com - Opinion: The Great Lone Star Migration

Today one out of 12 Americans lives in Texas—the same proportion that lived in New York City in 1930.

...Finally there is Texas. In 1930 there were (rounded off) six million people in the Lone Star State versus 13 million in New York. In 1970 there were 11 million in Texas and 18 million in New York: Each had grown by about five million. But in 2010 there were 25 million in Texas and 19 million in New York.

Back in the 1930-70 period, liberal political scientists hoped and expected that America would become less like Texas and more like New York, with bigger government, higher taxes and more unions. In one important respect—the abolition of legally enforced racial segregation—that has happened. But otherwise Americans have been voting with their feet for the Texas model, with its low tax rates, light regulation and openness to new businesses and enterprises.

Today one out of 12 Americans lives in Texas—the same proportion that lived in New York City in 1930. Metropolitan Dallas and metropolitan Houston, with about six million people each, threaten to overtake our fourth largest metro area, San Francisco Bay (population about seven million), in the next decade.

That doesn't seem to be much of an indictment of Texas' approach to governance...

That's not to say the next budget is going to be easy.  A lot of hard tradeoffs will have to be made.  But it's pretty clear Texas is a very far cry from being a failed state.

According to the 2010 Census population data for the United States, the Midwest region was the slowest growing of the four Census regions, at a 3.9% increase overall. South Dakota led the Midwest for population with an increase of 7.9%, while the lowest was the battered state of Michigan at -0.6%. These numbers seem to suggest a shift from the Rust Belt to the Great Plains.

This is more apparent when considering CNN Money’s list of the top 100 best cities to live in for 2010. Four cities represented the Dakotas on this list while only one city, Ann Arbor, stood for Michigan at number 46. The four cities from the Dakotas were Bismarck, ND at 74; Sioux Falls, SD at 77; Fargo, ND at 86; and finally Grand Forks, ND at 97.

The odds seem to be against the growing state of South Dakota when compared to the once-great Michigan. Michigan has 32 Fortune 500 companies (the largest being GM, Ford, and Dow), a notable IT strength, three well-known universities (University of Michigan, Michigan State University, and Wayne State University), and is one of the biggest leaders of industrial research and development. However, Michigan’s weaknesses lie in its disintegrating manufacturing industries whereas South Dakota has attained a more promising outlook.

South Dakota’s major city is Sioux Falls in Lincoln county, which has been named one of the “best counties to find a job” with a 67% increase in job growth in the last decade. Sioux Falls has been named one of the “best places to start a business” by CNN where operating a business costs an estimated 45% less there than it does in New York City. It also boasts a crime rate that is half the national average, is home to offices of many financial giants including Citibank and Wells Fargo that come to the state for its slackened usury laws and positive banking regulations, and has some of the region’s leading hospitals. A determined arts scene and a strong retail sector round out the package.

Can Sioux Falls be compared to the crumbling Detroit? When considering Sioux Falls to be the major hub of its region (the most proximate major cities are Omaha and Minneapolis, both over 150 miles away) it’s no wonder that many people are flocking there to be a part of its thriving economy that can’t be found for miles. Detroit, on the other hand, is a homogenous product in a competitive market. Other Rust Belt cities find themselves in a corresponding situation, offering a similar lifestyle while depending on declining industries.

Could these awful events in Tucson really forge a national “cooling off period?”

Many would make the case that American tragedies are exploited by media and government elites to manipulate public sentiment.

But even if that’s true, I believe there is an American community that grieves, celebrates and grows together.

Despite my dedicated opposition to George Bush, for example, I was moved four years ago by his memorial speech after the Virginia Tech massacre.

Americans look to the president for comfort.

In November ’09 I watched President Obama’s reaction to the Fort Hood shootings and was appalled by his dispassionate affect.  I criticized him in my blog for sounding like a white house staffer reading a prepared statement.

I want and expect Obama to console Americans over the next several days and not just to gain political advantage. 

But to make us feel less confused.  (I was unsettled by the way cable and the internet went into overdrive seconds after the rampage: weekend tv anchors stumbling through worthless conversations with elected officials and over-the-top instant online analysis).

This is a time for the country to rise above political differences.

And this is an opportunity for Barack Obama to show all Americans that he is – after all – one of us.

This first appeared at laborlou.com