By: Catherine Rampell
Via: The New York Times

Last month I wrote about how state budget cuts were forcing public universities to raise tuition and cut programs. Some of the subjects most valuable for job and economic growth — like engineering, computer science and health sciences — have been most vulnerable, because they also happen to be among the most expensive to teach.

One new and especially high-profile example is the University of Florida, which this month announced a plan that would gut its Computer and Information Science and Engineering Department.

Last week, Gov. Rick Scott of Florida signed a law cutting higher education funds in the state by $300 million, according to local papers. This follows cuts totaling $767 million over the previous five years, according to the Center for the Study of Education Policy at Illinois State University.

The University of Florida, the state’s flagship school, has been hit particularly hard. In an opinion article in The Gainesville Sun, a former university administrator said this year would bring “$38 million in budget cuts, creating an accumulated reduction in state funding to U.F. of 30 percent, or $240 million, since 2006.”

The university has responded to these cuts with tuition increases, although the Legislature has set ceilings on tuition that keep schools from fully offsetting the cutback in state support. This is true in many other states, too.

So the university, like others across the country, is making some draconian spending cuts.

These include eliminating all graduate and research activity in its computer science department. Some of the department’s faculty will be scattered to other departments, and some will have their jobs converted to full-time teaching/advising positions with a much higher teaching burden. The school plans to cut the department’s entire teaching-assistant budget.

Needless to say, many of the faculty members are expected to leave, and their innovation, ideas and research will go with them.

For context, Governor Scott made some controversial statements last October about favoring higher education that generates more job growth and economic activity because education is fundamentally a kind of investment in your work force.

“If I’m going to take money from a citizen to put into education, then I’m going to take that money to create jobs,” he told The Sarasota Herald-Tribune. “So I want that money to go to degrees where people can get jobs in this state.”

“Is it a vital interest of the state to have more anthropologists? I don’t think so.”

By: Dawn Wotapka
Via: The Wall Street Journal

CHATTANOOGA, Tenn.—The housing boom largely bypassed this midsize city in the Appalachian foothills, which many big developers found too small and too remote to warrant many major investments.

But missing out on the national joy ride turned out to be a double blessing for residents: Not only did the local economy dodge the foreclosure hangover that continues to dog other areas, but local and state officials instead spent the time devoting resources to lure big employers that have helped give the former manufacturing city a second act.

European Pressphoto Agency
In Chattanooga, Tenn., employees work at VW assembly plant, which got a boost from land and tax benefits.

Tax incentives and land grants totalling about $630 million were used to help attract $2 billion of investment from dozens of companies—Volkswagen AG, Amazon Fulfillment and Alstom SA—which helped to create more than 7,500 jobs and turned this once struggling town into one of the nation’s strongest local economies. The number of people employed in the region has grown in the past few years to 240,000, putting the unemployment rate at 7.6% in February, below the national rate of 8.3% that month, according to the Labor Department.

Residents “who have lived here for a long time once again have hope,” says Mayor Ron Littlefield, whose city has a population of about 170,000. “We aren’t losing our young people. We are attracting other people’s young people.”

Rising demand has boosted average home prices here by 2.3% since February 2011, at a time when prices have continued to fall in many metropolitan areas. And Chattanooga properties in some stage of foreclosure tumbled 27% from the prior year during the first quarter, compared with a 16% decline nationwide, according to RealtyTrac.

Average rents, meanwhile, grew 3.9% from the prior year in the first quarter, making it the nation’s third-largest gainer, behind San Francisco and San Jose, according to Reis Inc.

The city also is working to grow its tech scene. Since late 2010, EPB, the city-owned nonprofit power provider, has offered one gigabit-per-second Internet speeds, up to 200 times faster than the national average—to both businesses and residents. This summer, public and private partners will pay for dozens of entrepreneurial businessmen and students to come to town for several weeks to develop applications and businesses that could benefit from the high-bandwith. Locals hope the city will benefit from new business ideas.”Here is an old industrial city that now has the tools of the next generation,” Mr. Littlefield says.

Brian McCord for The Wall Street Journal
John Sweet, says sales have jumped at Niedlov’s Breadworks, his downtown bakery.

But using tax breaks, free land and other incentives to attract companies remains unpopular in many quarters. Some critics call the practice “corporate welfare” and some small-business groups argue that incentives are unfair because they often draw big out-of-town businesses rather than sustain smaller local companies.

Peter Fisher, research director at the Iowa Policy Project, says governments usually overstate the benefits of incentives, which he says are usually a bad use of taxpayer funds. The packages “end up costing a lot of money that should be going to the fundamentals of long-term economic growth, primarily education and infrastructure,” he says. Instead, “we end up focusing on these short-term, spade-turning opportunities.”

Proponents counter that incentives have become a necessary tool in economic development. “Cities need to be working with businesses, providing incentives in some fashion,” says William F. Fox, director of the Center for Business and Economic Research at the University of Tennessee in Knoxville, who has advised the state on economic development.

It seems clear the incentives have played a role in the decades-long effort to revive Chattanooga’s economy. Like many old factory towns, the city struggled to recreate its identity after its manufacturing base began disappearing in the late 1960s, leaving behind mostly pollution and despair. In 1969, CBS news anchor Walter Cronkite called Chattanooga America’s dirtiest city. “We were dying,” Mr. Littlefield recalls.

Mr. Cronkite’s remark spurred residents to action. In 1973, a group of local executives redeveloped the train station as a tourist site and hotel, calling it the Chattanooga Choo Choo hotel and complex. In the 1980s, the city began to revitalize its riverfront; by the mid-1990s, the downtown boasted new museums, a theater and an aquarium.

Next, city leaders turned to wooing businesses. In the past decade, dozens of companies have received various breaks to relocate or expand in Chattanooga. The largest package so far has gone to VW, with incentives valued at $500 million in 2008 from the city, county and state that included a 30-year property-tax deferral, 1,340 acres of city and county-owned land and infrastructure, and training grants, according to the Chattanooga Area Chamber of Commerce. The $1 billion auto plant, VW’s only one in the U.S., employs more than 2,500 workers and the German company recently announced it would hire 1,000 more this year.

Amazon, which built a facility the size of 17 football fields where customer orders are filled, was awarded a multimillion-dollar package in 2011 that includes 75 acres of former Army land adjacent to the VW site and no property tax for a decade, according to the local Chamber.

Alstom, whose new local factory makes turbines for coal, nuclear, gas and hydroelectric power plants, received a similar property-tax abatement in 2008 and help in training workers through a local college. It also received a $63 million clean-energy manufacturing tax credit from the U.S. Department of Energy.

The job growth is helping everything from retail to real estate. Last year, sales climbed 10% from the previous year at Julie Darling Donuts. Sales jumped more than 25% last year at Niedlov’s Breadworks, a bakery downtown, says owner John Sweet. And Chattanooga-based CBL & Associates Properties Inc., a publicly held mall operator, says sales at its flagship Hamilton Place mall have climbed in the “high single digits” from a year ago, while customer traffic has been up by double-digits.

Several new retailers, including cosmetics retailer Bare Escentuals and tea purveyor Teavana, have come to the market. “We have a number of inquires [from prospective tenants] that we’re trying to figure out how to satisfy,” says Chief Executive Stephen Lebovitz. “Our biggest challenge is we don’t have space.”

By: Aaron Corvin
Via: The Columbian

Washington State University Vancouver career counselor Christine Lundeen works with student Annise Nassib on Wednesday at the Student Services Center.

A slow economic recovery is under way in the U.S., as employers enlarge their payrolls and the unemployment rate inches down.

For young job seekers, however, the numbers tell a different story.

While the federal unemployment rate is 8.2 percent, unemployment for 20- to 24-year-olds is 13.2 percent. In Washington state, the unemployment rate is 8.2 percent. By contrast, the jobless rate for 16- to 24-year-olds was 21 percent in 2011. That’s up from 11.8 percent in 2007.

While there are no equivalent unemployment data for counties, it’s likely that Clark County’s job market mirrors the statewide figures, according to Scott Bailey, regional economist for the Washington State Employment Security Department.

What is known about Clark County is that the number of jobs held by high school-age workers plummeted by 40 percent from the first quarter of 2009 to the first quarter of 2011, Bailey said. For those ages 19 to 21, the number of jobs in Clark County dipped by 11 percent in the same period.

The situation for young job seekers in Oregon is similar. The unemployment rate was 19 percent for 16- to 24-year-olds in 2011. That’s more than double the overall jobless rate, and it’s up from about 11 percent in 2007.

The numbers underscore the tough spot that an entire generation of young workers find themselves in: They face an economy marked by lower pay and fewer job prospects, experts say, and rising pressure to attend college to have a shot in an economy that increasingly favors the highly skilled.

More seekers than jobs

The long-term weak economy has favored employers with a wealth of qualified candidates, and has caused the most pain for the newest entrants to the workforce.

Employers usually lower wages when there’s an oversupply of job applicants. What’s more, they’re able to be choosy, hiring the most experienced job candidates while eschewing younger ones, according to Dave Wallace, senior economist for the state Employment Security Department.

“That’s where (younger workers) really lose out,” Wallace said.

And older workers are staying in their jobs longer and putting off retirement, according to Guy Tauer, a regional economist for the Oregon Employment Department.

College grads in demand

Before the recession, younger workers filled a lot of Clark County’s production and construction jobs, Bailey said. Those low-skilled, entry-level positions were the first to be vaporized by the nation’s economic spiral.

In fact, some experts say a fundamental shift in the economy is well under way, where the U.S. labor market is increasingly open to only those who possess a college education.

In 2011, Jon Roberts, principal of Austin, Texas-based TIP Strategies, who oversaw development of a new economic development plan for Clark County, publicly urged regional leaders to boost Washington State University Vancouver’s role in creating economic growth.

He cited data showing that the jobless burden in the U.S. is shared unevenly. People who lack a high school diploma are experiencing a jobless rate of 13.7 percent, while 7.4 percent of those with college degrees are unemployed.

“Any region that isn’t committed to higher education and higher education training is likely to suffer significantly high unemployment,” Roberts told a gathering of more than 300 people at The Heathman Lodge in Vancouver.

David Autor, professor of economics at Massachusetts Institute of Technology, told Bloomberg.com that the U.S. workplace is polarizing between the education haves and have-nots.

And more jobs — even if they’re blue-collar jobs such as auto repair — will require some kind of college or post-secondary training, Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce, told the Philadelphia Inquirer. “The only thing more expensive than going to college is not going. Kids are damned if they do, damned if they don’t.”

Employers say they will hire 10.2 percent more new college graduates in 2011-12 than they did in 2010-11, according to a survey released in March by the National Association of Colleges and Employers.

That’s a slight increase over employers’ initial projection — 9.5 percent — “and marks the second consecutive year in which employers have adjusted their hiring expectations upward,” the survey said.

That’s “encouraging data” for new or soon-to-be college graduates, including those at WSUV, said Christine Lundeen, the branch campus’ career counselor.

Lundeen said she began her job about 3 years ago, when the economy was in a tailspin. Since then, she said she has noticed an increase in the number of employers showing interest in WSUV students.

“It’s definitely been encouraging,” she said. “Every year, I have more and more employers contacting me to post jobs and internships.”

No guarantees

However, as the national survey shows, a college degree hardly guarantees landing a job. Competition is high: About 32 new college graduates are expected to apply for every job posting during the 2011-12 recruiting year, according to the survey. That’s up from 21.1 applicants for every job posting during the 2010-11 recruiting year.

And that’s all the more reason for college students to get aggressive about reaching potential employers rather than just passively searching online, Lundeen said.

In fact, she said, campus leaders are encouraging students to get some experience, via internships and other programs, in the fields they’re pursuing while they’re still in college.

College departments are teaming with community organizations and business leaders to bring real world issues into classrooms, Lundeen said.

Students are taking the initiative, too, she said. One WSUV student group focused on accounting, business and finance recently secured a visit to campus by two potential employers: the Federal Bureau of Investigation and the Bonneville Power Administration.

In an economy that still has weak spots, Lundeen said she’s noticed students becoming increasingly aware that a college degree, while an important key to unlocking the labor market, isn’t necessarily a sure lock on a job.

“There’s definitely been an increase in the use of services,” she said of the career and networking advice her office provides. “The word’s getting out; it’s a tough market, and you need to be developing the best résumé, thinking about job-searching strategies and networking.”

Lundeen added, “The campus as a whole is really pushing to get students experienced in their field before they leave.”

By: Richard Florida
Via: The Atlantic Cities


Manufacturing is back, at least as a talking point.

President Barack Obama has been making an election-year case for a “built-to-last” economic strategy centered on American manufacturing. A recent Brookings Institution report argues that manufacturing is a powerful engine of exports, innovation, and high-wage jobs. In a feature story in the New York Times Magazine, Adam Davidson extols the resurgence of craft manufacturing in everything from high-tech precision parts for military helicopters and guided missiles to new herb mustards, all-natural beef jerky, and artisanal pickles. “Instead of rolling our eyes at self-conscious Brooklyn hipsters pickling everything in sight,” Davidson writes, “we might look to them as guides to the future of the American economy.”

Before we get too excited, I thought it might useful to put some actual numbers on the table. The chart below, by Michelle Hopgood of the Martin Prosperity Institute, outlines which manufacturing fields are most prevalent based on detailed data on production occupations from the Bureau of Labor Statistics. To save space, we have grouped some of these categories together and also shortened some of the occupational titles.


Manufacturing work is important. We should applaud the men and women who do it, and do our best to make it better, more engaging, and higher paying. The best manufacturing jobs today look more like knowledge jobs, involving high levels of analytical and social intelligence skill such as team building and developing others.

But manufacturing will not provide a viable economic future, at least not by itself.

For starters, pay for productions workers is below the national average. Their average pay is $33,700 per year, or $16.24 per hour. That compares to an average of $44,410 across all jobs, or $21.35 per hour.

Even more telling: some manufacturing industries pay much better than others. The 66,530 tool and die makers or the 36,200 aircraft assemblers have great jobs earning – $48,710 and $45,230, respectively. But the nearly 150,000 sewing machine operators average just $22,630 a year, or $10.88 per hour.

The number of manufacturing jobs is also falling quickly, despite the government’s best efforts. Roughly 8.2 million American workers are employed in production jobs. This does not count the 408,000 Americans who work in fishing, forestry, and farming occupations. Add them in and it brings the total to 8.6 million workers, roughly 6.5 percent of America’s total labor force of roughly 127 million. That’s down from roughly a third of the workforce in 1950. And it’s projected to decline further, to about 5 percent, by 2020.

The decline in production workers mirrors the decline of agriculture over the course of the 20th century. But it may be even swifter. A century ago, roughly 37 percent of Americans worked on farms. This declined to just slightly more than one in five workers by 1930 and 17 percent of the workforce by 1940, a period of crisis and economic resetting analogous to the current one. More than one in 10 Americans were still employed in agriculture in 1950. It was not until 1960 that the share of workers in agriculture hit 6 percent, a level similar to the share of production workers today. Since that time, the share of Americans employed in agriculture has fallen to a fraction of one percent.

Of course, the United States still produces a huge amount of food, but we do it far more efficiently and with far fewer people. Similarly, America still makes a lot of manufactured stuff, including a great deal of advanced and artisanal products, but we also do that more productively and with far fewer people. Trying to rebuild the U.S. economy around manufacturing today is the historical equivalent of trying to build the 20th century American economy around farms.

Via: Ocala.com

Ocala/Marion County is hardly alone in its ongoing quest to lure new employers and jobs and re-energize its slumping economy. Every community in America is doing the same thing, almost all of them armed with industrial sites, incentive packages and slick marketing pitches.

So how do we set ourselves apart? That question was posed to almost 50 local business and political leaders as part of research being done by the Texas-based consulting firm TIP Strategies. TIP is advising the Economic Development Corp. and the Chamber of Commerce on merging their two organizations into a new economic development entity for Ocala/Marion County.

The answer was anything but simple. But the short version is that to be competitive in the 21st century, Ocala/Marion County has to adopt a “holistic view” of economic development that places a premium on quality of life — making our community a great place to live.

Those interviewed were asked what should be the priorities in making the community more appealing to potential employers. The consensus: continue to develop the downtown “innovation campus”; expand tourism opportunities, including securing Silver Springs as a public park; tap more into our large reservoir of retiree expertise and knowledge; keep developing world-class commerce parks; continue downtown revitalization; and, finally, “improve our public schools.”

It was that last one that drew the only comment from the audience, specifically from School Board Chairwoman Judi Zanetti.

“I just want to say there is a lot more good happening in our schools than bad,” Zanetti said.

Zanetti stated the obvious. Yet the fact is, no matter how many good programs, teachers and students she can point to, our public schools do need to be better if we are going to attract the best companies.

This much is undeniable. Marion County Public Schools ranked 44th out of 67 Florida school districts on a recent FCAT-based ranking released by the state Department of Education. And with a new, tougher school grading scale in place, the projection is Marion County could have a half dozen or more “F” schools next year.

Fair or not, these are the measuring sticks CEOs and others making business location decisions will look at, because good schools matter.

Zanetti missed an opportunity to invite those at the EDC meeting to help initiate a serious community conversation about how to improve our public schools. In recent years, any conversation about our public schools has been focused on cutting budgets, eliminating programs, four-day school weeks, trimming staff — but almost never about improving our schools.

It is time. The last time the community had a candid conversation about improving our schools was in 1998 when a group of private business people hired an outfit called SchoolMatch to conduct an in-depth assessment of our public schools. The result was harshly critical and brought about sweeping changes in leadership and policy in our schools.

That sort of serious discussion — led by the private sector and championed by the School Board — is what is needed again. Our schools do need improving if we are to compete against every other community in America for the best jobs.

Maybe the new organization to emerge from the EDC-Chamber structure will be the one that starts and leads such a conversation. Let’s hope. After all, nothing reflects a community quite like its schools. Quality schools signal a quality community.

Younger, wealthier students pick community college, bringing expectations

By: Paul Fain
Via: Inside Higher Ed



Community colleges are hot these days, and not just with photo-op seeking politicians. They’re an increasingly popular choice for 18-22 year-olds from the upper middle class, thanks to cheap tuition, a career focus, smoother transfer options and growing public respect for the sector’s academic chops.

Nationwide, 22 percent of college students with annual family incomes over $100,000 attended community colleges last year, up from 16 percent four years ago, according to a study by Sallie Mae.

“Community college gradually is gaining wider acceptance as the default option out of high school,” said Stephen G. Katsinas, director of the University of Alabama’s Education Policy Center.

Relatively affluent young students are typically better-prepared academically and have a good chance of earning a degree. They are also more likely to attend full-time, require less remediation than their peers and can be cheaper for community colleges to educate.

But this group is also demanding, as traditional-age students want a full campus experience with amenities like fitness centers and extracurricular activities, which can mean new buildings and strained student service budgets. They are also more likely to seek out counselors, experts said.

“You have more students coming to our campuses who see themselves transferring,” said James Jacobs, president of Macomb Community College in Michigan, and who sometimes view community college as a “stepping stone.”

Raritan Valley Community College, which is located in a suburban swath of northern New Jersey, has welcomed a surge of young students. Many of those students would have attended a nearby four-year college in the past, administrators said, such as Rutgers University or Fairleigh Dickinson University.

Over the five years before 2011, Raritan Valley’s total enrollment went up by 32 percent. But the number of students under 21 years old increased by 49 percent, from 2,472 to 3,675, while older students accounted for a much smaller portion of the growth. (See table here.) Full-time students are also gaining ground in the mix.

Casey Crabill, the college’s president, said the college hasn’t studied which four-year institutions students are passing up to come to Raritan Valley. They know, however, that more students are arriving from two wealthy counties.

Historically about two-thirds of Raritan Valley’s students have come from Hunterdon and Somerset Counties — which are among the top 10 most affluent counties in the U.S. — and that proportion hasn’t changed as overall enrollment has grown.

“Our market share from those counties is reaching deeper into the high school graduate markets,” Crabill said.

The recession has played a big role in Raritan Valley’s recent enrollment bump. “A lot of Wall Street lives in our counties,” said Crabill, and many of those families suddenly had less money in 2008, making community college a more appealing option.

New Jersey’s public universities have increased their tuition in response to state budget cuts, but they remain a cheaper option than most private colleges. The state has also seen a large population increase in the traditional college-age bracket, which means more competition for slots at public institutions, particularly at the increasingly selective flagship, Rutgers.

The competition is contributing to the growing number of young students at Raritan Valley, Crabill said. “It’s like a wave.”

New Jersey’s experience is not unique, Katsinas said. The research center estimates that the total number of 18- to 24-year-olds nationwide increased by one million between 2009 and 2012.

“A lot of folks in the middle class are taking a look at community colleges,” said Walter G. Bumphus, president of the American Association of Community Colleges. “The increases are significant.”

Fielding Teams

Raritan Valley has had plenty of recent success stories, including students who have transferred to Cornell University, the University of California at Berkeley and other high-profile institutions. Crabill said the publicity has helped convince more traditional students that the two-year college is a good choice.

“Our profile peaked at the same time” that the the recession began, she said.

The college has taken many steps to respond to the changing demographics on its main campus. To improve student amenities, college officials remodeled the cafeteria and expanded and updated the fitness center. The college also created a first year experience office and related programming. A new student life and leadership center is in the works, with a related fund-raising campaign launched in 2010.

The increase in full-time students has helped to offset those costs, said Crabill, because part-time students use student services, too, without paying full-time tuition.

So while the Obama Administration talks up job training programs at community colleges, many of which are aimed at helping workers update their skills, Raritan Valley has added some of the trappings of a four-year college.

To wit, the college recently added men’s and women’s varsity soccer teams, and a club ice hockey team. It’s a big change for a community college that has often struggled to field teams.

“I don’t think we’ve had to forfeit a game this year,” Crabill said, “which was not our tradition.”

Older students are still a strong, visible population at Raritan Valley. Jill Marie Winters is one of them. She’s in her fifties, and is working toward an associate degree in social work. Winters said she sees plenty of students like her on campus. But she likes going to class with young students, and interacting with them through Phi Theta Kappa, the honor society for students at two-year colleges.

“I just love the young kids,” Winters said. “I think they like being around us.”

Crabill said the college predicted its enrollment growth, but was surprised a bit by the numbers of students who are just out of high school. And while those students expect more campus life options, the increased energy has been a plus.

“Young students are demanding and that’s what makes it fun,” she said.