Where Are the Hardest Places to Live in the U.S.?

July 7, 2014

By: Alan Flippen
Via: The New York Times

Click for interactive version

Click for interactive version


Annie Lowrey writes in the Times Magazine this week about the troubles of Clay County, Ky., which by several measures is the hardest place in America to live.

The Upshot came to this conclusion by looking at six data points for each county in the United States: education (percentage of residents with at least a bachelor’s degree), median household income, unemployment rate, disability rate, life expectancy and obesity. We then averaged each county’s relative rank in these categories to create an overall ranking.

(We tried to include other factors, including income mobility and measures of environmental quality, but we were not able to find data sets covering all counties in the United States.)

The 10 lowest counties in the country, by this ranking, include a cluster of six in the Appalachian Mountains of eastern Kentucky (Breathitt, Clay, Jackson, Lee, Leslie and Magoffin), along with four others in various parts of the rural South: Humphreys County, Miss.; East Carroll Parish, La.; Jefferson County, Ga.; and Lee County, Ark.

We used disability — the percentage of the population collecting federal disability benefits but not also collecting Social Security retirement benefits — as a proxy for the number of working-age people who don’t have jobs but are not counted as unemployed. Appalachian Kentucky scores especially badly on this count; in four counties in the region, more than 10 percent of the total population is on disability, a phenomenon seen nowhere else except nearby McDowell County, W.Va.

Remove disability from the equation, though, and eastern Kentucky would still fare badly in the overall rankings. The same is true for most of the other six factors.

The exception is education. If you exclude educational attainment, or lack of it, in measuring disadvantage, five counties in Mississippi and one in Louisiana rank lower than anywhere in Kentucky. This suggests that while more people in the lower Mississippi River basin have a college degree than do their counterparts in Appalachian Kentucky, that education hasn’t improved other aspects of their well-being.

As Ms. Lowrey writes, this combination of problems is an overwhelmingly rural phenomenon. Not a single major urban county ranks in the bottom 20 percent or so on this scale, and when you do get to one — Wayne County, Mich., which includes Detroit — there are some significant differences. While Wayne County’s unemployment rate (11.7 percent) is almost as high as Clay County’s, and its life expectancy (75.1 years) and obesity rate (41.3 percent) are also similar, almost three times as many residents (20.8 percent) have at least a bachelor’s degree, and median household income ($41,504) is almost twice as high.

America’s New Industrial Boomtowns

July 2, 2014

By: Joel Kotkin and Michael Shires
Via: Forbes


David Peebles works in a glass tower across from Houston’s Galleria mall, a cathedral of consumption, but his attention is focused on the city’s highly industrialized ship channel 30 miles away. “Houston is the Chicago of this era,” says Peebles, who runs the Texas office of Odebrecht, a $45 billion engineering firm based in Brazil. “In the sixties you had to go to Chicago, Cleveland and Detroit. Now Houston is the place for new industry.”

With upward of $35 billion of new refineries, chemical plants and factories planned through 2015 for Houston and the surrounding Gulf Coast, companies like Odebrecht, which runs chemical plants and is working on a new freeway in the area, have converged on the nation’s oil and gas capital. They are part of the reason why the Texas metropolis ranks first on our list of the best large cities for manufacturing.

Houston, with 255,000 manufacturing jobs, is not yet the country’s largest industrial center; it still lags behind the longtime leaders Los Angeles, with 360,000 manufacturing jobs, and Chicago, home to 314,000. But it is clearly on a stronger trajectory. Since 2008, Houston’s manufacturing workforce has expanded 5% while Los Angeles has lost 13% of its industrial jobs and Chicago’s factory workforce has shrunk 11%.

Why Manufacturing Matters

Whether America is on the path to a sustainable industrial expansion or is just seeing a weak bounce back has been widely debated, but the recent numbers are impressive. Since 2010 the U.S. has added 647,000 manufacturing jobs. New energy finds have led to the construction and expansion of pipelines and refineries, and has sparked foreign industrial investment reflecting electricity costs that are now well below those in Europe or East Asia. Besides Houston, also ranking high on our big cities list are two other energy towns, No. 5 Oklahoma City and No. 10 Ft. Worth, Texas. Our mid-sized cities list is led by Lafayette, La., with nearby Baton Rouge in 11th place.

Evangelists of the “information economy” may think that industrial jobs are passé, as epitomized by a recent Slate article that recommended that working-class people from places like Detroit should move to areas like Silicon Valley or Boston where they can make money cutting the hair and walking the dogs of high-tech magnates. But the notion that U.S. manufacturing is doomed, and that the jobs are of lower quality than those in high-tech centers, is largely bogus; even in Silicon Valley the majority of new projected jobs are expected to pay under $50,000 annually. In contrast manufacturers pay above-average wages, in some cases due to unionization, but in many others because of the increasing sophisticated skills required by today’s factories.

Although we will likely never see a boom in factory employment on the scale experienced in the last century, the demand for blue-collar skills is projected to increase in future years. Among all professions for non-college graduates, manufacturing skills are most in demand, according to a study by Express Employment Professionals. By 2020, according to BCG and the Bureau of Labor Statistics, the nation could face a shortfall of around 875,000 machinists, welders, industrial-machinery operators, and other highly skilled manufacturing professionals.

Southern Comfort

Our research suggests that much of this growth will be in metro areas in the South and the Great Plains that are known for friendly business climates. New industrial investment is tending to go to places that are largely non-union, and feature lower taxes and light regulation. Epitomizing this trend is the No. 2 city on our large metro area list, Nashville-Murfreesboro-Franklin, Tenn., where manufacturing employment is up 6% since 2008. Nashville has become a hotbed for foreign investment in manufacturing, with the expansion of the Nissan facilities in nearby Smyrna, as well as a host of suppliers.

This is occurring, in part, because some large companies are shifting production to America from China in response to rising Chinese wages as well as sometimes unpredictable business conditions there.

Investment inflows, both from overseas and domestic companies, have boosted other standout southern industrial hubs, as well as the smaller metro areas on our mid-sized city list, notably Mobile, Ala. (third place), with its expanding industrially oriented port, and No. 14 Charleston-North Charleston-Summerville, S.C., which has been a beneficiary of major new foreign investment as well as the expanded presence of U.S. aerospace giant Boeing. The South also is home to our No. 1 small manufacturing city, Florence-Muscle Shoals, Ala.

The Resurgence of the Rust Belt

The progress is not confined to the Sun Belt. The resurgence of the U.S. auto industry has revived the economy of Warren-Troy-Farmington Hills, Mich., also known as “automation alley.” The home to many parts suppliers, engineering and tech support for the car industry, this area has enjoyed an impressive 12.7 percent growth in manufacturing jobs since 2008, placing it third on our big cities list.

Detroit, the center of the auto industry, ranks a respectable 16th on our big city list, but the big improvements in the Rust Belt are occurring in mid-sized cities such as Lansing-East Lansing, Mich. (eighth), Grand Rapids (ninth) and Ft. Wayne, Ind. (10th).

But arguably the strongest Rust Belt recovery has occurred in Elkhart-Goshen, Ind., third on our small cities list. Since 2008 Elkhart’s industrial employment — much of it in the recreational vehicle industry — has expanded 30%, one of the most dramatic employment turnarounds of any place in America. Unemployment has fallen to 5% from a recession high of 20.2%.

Western Exposure

The South and the Great Lakes may be America’s industrial heartland, but there are several strong pockets in the West. One region that is doing particularly well is the Pacific Northwest, led by Seattle-Bellevue-Everett, which has experienced 11% manufacturing employment growth since 2010.

Boeing is key here, but the Pacific Northwest’s industrial expansion has also been fueled by low electricity rates, largely due to the area’s strength in hydroelectricity. Portland-Vancouver-Hillsboro OR-WA (11th) is usually associated more with hipsters, but manufacturing growth has taken off, particularly with the expansion of Intel’s large semiconductor facility in suburban Hillsboro.

Another Western industrial hotspot is Utah, a state with low energy costs and business friendly regulation. Salt Lake City, 12th on our large metro area list, has enjoyed a 5.7% increase in industrial jobs since 2010. Growth has been even stronger in two other Utah cities, Provo -Orem and Ogden-Clearfield, which rank fifth and seventh, respectively, on our mid-sized cities list.

One surprising place where manufacturing is making a mild comeback is in the Bay Area, which for years has exported high-tech manufacturing jobs to places like Utah as well as the rest of the world. Despite ultra-expensive electricity, high labor costs and some of the world’s most demanding environmental laws, San Jose (13th on our big metros list) San Francisco-San Mateo-Redwood (15th) have posted solid industrial growth after years of decline. Yet both remain below their 2008 levels, and may find new growth difficult once the current tech bubble collapses.

Laggards

Two of the worst performers on this list are the big metro areas that have for decades been the country’s largest industrial hubs, Los Angeles-Long Beach-Glendale (55th) and Chicago-Joliet-Naperville (56th). It appears they lack the cost competitiveness and specialized focus of America’s ascendant industrial regions.

Another clear loser is the Northeast, which accounts for seven of the eight lowest ranked big metro areas. Since 2008, Philadelphia (62nd) has lost 21% of its once-large industrial job base, while New York City, which has been losing industrial jobs for decades, ranks 45th. Here, too, high costs and regulation are a factor, as well as the loss of industrial know-how resulting from long-term erosion of their manufacturing bases.

Of course, some information age enthusiasts may argue that losing such jobs is something of a badge of honor, since “smart” regions do not focus on the gritty business of making things. Yet if you look across the country, you can see that many of the strongest local economies, from Houston and Nashville to Seattle, have taken part in the U.S. industrial resurgence. It seems this is one party more worth joining than avoiding.

Full List: The Big Cities Leading A U.S. Manufacturing Revival

Cities In South, West To Grow Faster

July 1, 2014

By: Kathleen Madigan
Via: The New York Times

Slow economic growth is projected for Binghamton, N.Y. Heather Ainsworth for The Wall Street Journal


The U.S. economy seems headed to a long-run growth rate well below 3%, but some metropolitan areas will see their economies surge above 4% annually for the rest of this decade, according to a study released by the U.S. Conference of Mayors.

Metro areas—which include cities along with surrounding suburbs—are already doing better than smaller nonmetro areas, according to the study, compiled by economists at IHS Global Insight.

Last year, metro areas saw better economic growth and hiring than smaller regional areas. Looking at 2014, the IHS economists forecast payrolls in metro areas will rise 2.0% versus 1.6% in nonmetro areas, according to the report, released Friday in conjunction with the mayoral group’s annual meeting in Dallas.

The employment gains will allow almost half of all metro areas to return to their prerecession employment levels by the end of this year. The report also projects 20% of metro areas will have unemployment rates below 5% by the end of 2014. The U.S. jobless rate stood at 6.3% last month.

Looking further ahead, metro economies will be where the growth is.

While the Federal Reserve last week projected the U.S. economy’s long-run growth at 2.1% to 2.3%, the mayors’ report says 21 metro areas will post growth averaging more than 4% from now through 2020. Heading the list is Midland, Texas, with growth projected at 5.8%. The study says agriculture, construction and mining industries will boost Midland’s expansion.

In fact, almost all the big-growth areas are in the South and West. Of the 21 growth-leading metro regions, six are in Texas and four in Florida. Construction, energy, computer jobs and professional business services will be major sources of the growth, the study says.

But the report warns that when it comes to job gains, “the low paying administrative and support-services division is expected to be the fastest grower, significantly outpacing the more lucrative management and technical sectors.”

The influx of residents into the Southwest isn’t without problems. A 2013 study by the University of Arizona showed the area lacks sufficient water to meet the needs of all its citizens, businesses and agriculture.

The biggest loser will be upstate New York. In the IHS forecast, five of the 10 slowest economies will be in New York state. At the very bottom, Utica-Rome and Binghamton will grow just 1% a year through 2020.

The concentration of U.S. economic growth in larger metro areas is causing a shift in the population. A study released in March by the U.S. Census Bureau showed that larger metro areas, along with areas rich in oil and gas, gained population last year, while nonmetropolitan areas lost residents on net.

The mayors’ report predicts that shift will continue. From 2013 through 2014, it says, “population growth in metros will dwarf that of nonmetros, averaging a 0.9% compound annual gain compared to 0.3% for nonmetros.”

Austin Vs. Seattle: Talent, Innovation, And Place

June 30, 2014

By: John Karras, Consultant, TIP Strategies & Jeff Marcell, Senior Partner, TIP Strategies

The View from the Austonian by Todd Dwyer Via Flickr
Seattle Space Needle by David Lee Via Flickr

Now that TIP Strategies has a permanent presence in both Austin, Texas and Seattle, Washington we’ve been having fun comparing and contrasting the two regions. One feature the two share: momentous growth. According to two recent articles, Austin’s metro area is the “fastest growing large metro area” and the City of Seattle is the “fastest growing large city.” This growth is a direct result of another commonality between Austin and Seattle, a cool factor that generates a gravitational pull of people, investment, and attention.

Speaking of cool, Seattle was recently named America’s Most Hipster City by “Thrillist” …Austin came in at #3. And between the two cities, you have a long list of internationally recognized events and festivals: South by Southwest, the Austin City Limits Music Festival, the Formula 1 U.S. Grand Prix, Bumbershoot, the Seattle International Film Festival, Seafair, and many others. If you want to define cool, you can’t get closer than Austin and Seattle. The evidence is substantial:


While the competition for cool is a fun conversation, we at TIP Strategies do take successful economies very seriously. There is much more than the entertaining buzz of oddball rankings that drives the success of these regions. Our firm has identified the formula to economic success as Talent, Innovation, and Place. Austin and Seattle have tapped into this formula and are benefiting from job growth and investment because they deliver on these critical components of a successful economy.

The regions are similar in a number of important ways:

  • The Austin and Seattle metros are national leaders in population growth as evidenced by the latest Census data.
  • Both cities also lead the nation in job growth. In fact, the U.S. News & World Report recently included Austin and Seattle in its list of “The 10 Best Cities to Find Jobs” (Austin is #5, Seattle is #6).
  • The Austin and Seattle regions contain the most significant concentrations of high-tech companies in the country outside of Silicon Valley and Boston, thanks to headquarters and major facilities of tech companies like Microsoft, Amazon, Google, Facebook, Dell, Apple, Samsung, and many others.
  • Both cities have high levels of educational attainment (44.8% of Austin residents age 25 and older hold a bachelor’s degree and 56.5% of Seattle residents age 25 and older hold a bachelor’s degree, compared to a U.S. average of 28.5%).


But each region meets the Talent, Innovation, and Place formula in its own unique way. Let’s briefly explore how the regional economies of Seattle and Austin are leading the pack:

Talent:

Austin and Seattle are both magnets for talented professionals and entrepreneurs. The talent pool in each metro area is the basic building block of each region’s economy. Of course, the cool factor in both cities helps to attract talent from across the country. But each city also has a strong pool of locally grown talent thanks in large part to the University of Texas at Austin and the University of Washington, two of the top public universities in the world. As economic development professionals, we understand that access to talent is the number one issue for both companies and communities. Here’s how Austin and Seattle compare in the competition for talent:

  • A recent study by the Milken Institute ranked the Austin and Seattle metro areas as two of the “Top 10 Best-Performing Cities” (Austin is #1, Seattle is #6). The study analyzed the 200 largest metro areas based on job, wage, and technology growth.


Innovation:

There’s a special kind of energy in Austin and Seattle that you just don’t feel in most cities. Both places are hotbeds of creativity and innovation. This is partly due to the influx of people moving to these cities each day, but it’s also due to the level of growth taking place in locally based start-ups and small businesses. Austin and Seattle are among an elite group of cities that are on the cutting edge of innovation and entrepreneurship.

Here are a few examples of how the economies of Austin and Seattle are driving innovation:



Place:

The level of growth (population, jobs, investment) taking place in the regional economies of Austin and Seattle is strong evidence of each metro area’s quality of place. You can experience this first-hand simply by seeing the amount of construction cranes towering over each city’s urban core. Yet even if you’ve never visited either city, chances are you have a good impression of them. Each city has its own unique brand, but they are both vibrant cities with strong identities.

If a quick look at the population and job growth data (or construction cranes) isn’t enough to convince you that Austin and Seattle are two of the most appealing places in the U.S., here are a few more examples that might do the trick:

  • Jones Lang Lasalle recently named Austin and Seattle among the “World’s 20 Most Dynamic Cities” as part of its proprietary City Momentum Index (Austin is #7, Seattle is #18).
  • Austin and Seattle both rank highly on the “City Energy Efficiency Scorecard” LINK http://aceee.org/local-policy/city-scorecard from the American Council for an Energy-Efficient Economy (Austin is #6, Seattle is #5).


TIP Strategies is linked to each of these metropolitan economies like no other economic strategy firm. Our approach is grounded in understanding these economies, taking what we know to be their successful components, and applying and leveraging these lessons for the benefit of the communities we work with across the country. Being connected to and engaged in the two capitals of Talent, Innovation, and Place is our strategic advantage.

While our staff will continue to have fun debating which TIP location is cooler, we will always place serious emphasis on the lessons we can take from each of these metropolitan economies, lessons we can bring to our clients to help them build their own unique brands through Talent, Innovation, and place.

How To Spark Downtown Development


By: Marc Stiles
Via: Puget Sound Business Journal

The performing arts center in downtown Federal Way will have views of Mount Rainier. The City Council voted on June 3 to move ahead with the $32 million project. Illustration by Stephanie Bower


The city of Federal Way [Washington] last week made a $32 million gamble by deciding to move ahead with construction of a performing arts and conference center. In economic development circles, this is known as a “catalyst project.”

With construction of the new facility at the northeast corner of South 316th Street and 20th Avenue South, city leaders hope it will jump start redevelopment of the city center — a long-time goal.

The Business Journal spoke with Jeff Marcell, a new senior partner at economic development company TIP Strategies and former executive of the EDC of Seattle and King County, about such projects, and what makes some successful.

What’s a good example of a catalyst project actually turning a languishing area in to a vibrant one?

One of the most recognized ones is Kent Station in Kent. The city purchased a chemical plant in the middle of its urban core and redeveloped the site with guidance from the private sector. They took advantage of surrounding public sector investments like a new King County Justice Center and Sound Transit’s commuter rail station to fuel traffic to the development and later added facilities for Central Washington University and Green River Community College that brought even more activity to the development.

How can cities ensure projects actually achieve their goals?

Identify clear goals, including job creation, tax revenue generation and changing the preconceived mindset about a community. Cities also should conduct a comprehensive feasibility analysis, and they should lean on private sector expertise for guidance. It is vital to have broad and strong local leadership actively involved. Cost overruns and delays should be expected, and cities should be patient. It may take several years to see results.

And what should cities not do?

They should not review elaborate architectural drawings before conducting the feasibility analysis. Visual presentations generate emotional responses that are not conducive to more objective judgements. Cities also shouldn’t develop plans and move ahead without the opportunity for community buy-in.

What Are You Going To Do With That Degree?

June 26, 2014

By: Karen Beard (Intro)
Via: benschmidt.org

In recent years, the widespread availability of high speed internet access coupled with a proliferation of new technologies and the growth of transparency movements like the federal Open Government Initiative, have resulted in dramatic growth in data visualizations. In its broadest sense, the term applies to any pictorial representation of data including charts and infographics. But the true power of data visualization is best seen when the tools are applied to enormous data sets to reveal patterns that would otherwise be impossible to discern.

A new interactive data visualization from Ben Schmidt, an assistant professor of history at Northeastern University and core faculty at the NuLab for Texts, Maps, and Networks, is an example of this power. Schmidt’s flow diagram—presented under the heading “What are you going to do with that degree?”—visualizes employment and education data from the American Community Survey. The figure explores the relationships between college majors and professions.

In many cases, the data reflect the common wisdom that many people work in fields unrelated to their degree. For example, less than half of people employed as police officers have degrees in criminal justice. The visualization also highlights differences in employment outcomes between narrowly focused degrees and those that are more academic. As might be expected, career-specific degrees such as nursing and education, have more consistent outcomes while broader fields of study, like mathematics and communications, feed into a more disparate array of professions.
Additional data visualizations created by Mr. Schmidt can be found here.