via The Wall Street Journal

By Conor Dougherty

AUSTIN, Texas—As the nation grapples with stubbornly high unemployment, Texas’s political and high-tech capital shows one way to create good jobs for people who didn’t go to college: Attract highly skilled entrepreneurs, and watch the companies they start hire lower-skilled workers.

Praxis Strategy Group, an economic-development consultancy, estimates Austin added 50,000 “middle-skill” positions in the past decade. These are jobs that require a two-year associate’s degree or the equivalent work experience, and pay a median wage of $17.30 an hour, or $38,000 a year. That pace of growth is roughly four times faster than the nation’s as a whole, three times that of New York and Portland, Ore., and twice that of Phoenix.

Austin’s success in creating middle-class jobs runs against the grain of national trends. As America’s shift from manufacturing to the service sector has accelerated, economists have noted a hollowing out of such jobs.

In recent decades, a select number of brain hubs like Austin have attracted a higher percentage of well-educated workers and a lopsided share of new investment and young companies. In 1970, the top 10 most-educated metropolitan areas among the nation’s 100 largest had an average of 23% of workers holding a bachelor’s degree or higher, compared with 10% in the bottom 10, according to an analysis of Census data by Harvard University economist Edward Glaeser. The 13-percentage-point gap has widened every decade since, and had doubled by 2010.



Click on the interactive graphic to see the growth in middle-skill jobs from 2001 in Austin and other regions.

Beyond creating new middle-skill jobs, such brain hubs have generally higher incomes and for the most part have performed better through the recession. In Austin, the 7.1% average unemployment rate in 2010 was well below the nation’s during the same period.

Of course, Austin also has a fast-growing population, which helps create jobs in any economic environment. And it’s not as if other cities can create a more-educated populace overnight.

Still, Austin’s success in creating middle-level jobs shows how a well-educated work force can raise the fortunes of lesser-educated workers as well. Raleigh, N.C., has benefited from the same dynamic.

One consequence of the economy’s shift away from production toward brain work is that companies are constantly seeking new ways to break down high-value intellectual tasks into smaller, cheaper bits. Much the same way that assembly lines created millions of new jobs by reducing mass production to a sum of tasks, employers in Austin and elsewhere are constantly breaking down higher-skill jobs to “create new middle-skill, middle-income specialties,” according to a recent report by the McKinsey Global Institute.

Take Homeaway Inc., a vacation-rental service founded here in 2005 that went public this year. Its rapid growth allows entry-level employees to substantially raise their income, said Brent Bellm, the company’s chief operating officer.

Mr. Bellm points to customer-service representatives, who earn from $25,000 to the low-$30,000s range and field phone calls and e-mails from people using the company’s website. About one-third of them are promoted annually to areas such as a security team that monitors the site for fraudulent listings and removes shoddy properties. “In a few years, you can go from the high 20s to the 50s,” he said.

Simply put, rapid growth boosts the value even of workers who have a limited education but possess knowledge of a company’s systems.

Enrico Moretti, an economist at the University of California, Berkeley, notes that highly educated cities see faster wage growth for less-educated citizens as well as the high fliers. One reason is that that many lower-level employees use the most productive technologies and act as complements to more-expensive and highly-educated workers, making it much easier for companies to raise their wages faster than overall inflation.

Another force, Mr. Moretti notes, is called “human capital spillovers,” a fancy way of saying that many “middle skill” workers begin to acquire skills that are much more valuable than their overall education level might suggest.

That’s how Douglas Kanneman went from a bored retail clerk feeling grim about his prospects to a computer-equipment technician with a four-bedroom house and the chance to let his wife work part-time while looking after their two children.

Mr. Kanneman, 37 years old, began his working life like a lot of people who didn’t go to college—at a retail store with low pay. Looking to better his prospects at 25, he went to community college for computer training and eventually landed a customer-service job at SolarWinds in Tulsa, Okla., which makes software that controls companies’ information infrastructure like computers and phone systems.

Later, when SolarWinds moved to the tech hub of Austin, Mr. Kanneman went with it. As the company grew, he worked his way into the better-paying information-technology department. A year ago, he did something that he said validated the worth of his new skills: He quit for a higher-paying job elsewhere in Austin, and with overtime can now earn more than $90,000 a year.

“It proved that I was worth as much as I thought I was,” Mr. Kanneman said.

Write to Conor Dougherty at conor.dougherty@wsj.com

By A.G. SULZBERGER, NYTimes
ULYSSES, Kan. — Change can be unsettling in a small town. But not long ago in this quiet farming community, with its familiar skyline of grain elevators and church steeples, the owner of a new restaurant decided to acknowledge the community’s diversity by adding some less traditional items to her menu. Cheeseburgers. French fries. Chicken-fried steak.

“American food,” the restaurant owner, Luz Gonzalez, calls it. And she signaled her move by giving her Mexican restaurant a distinctly American name: “The Down-Town Restaurant.”

Such fare was all but extinct in a place where longtime residents joke — often with a barely disguised tone of frustration — that the dining options are Mexican, Mexican or Mexican. After the last white-owned restaurant serving American favorites closed this year, it fell to one of the recent Hispanic arrivals to keep the burgers-and-fries legacy alive. Ms. Gonzalez even enlisted the help of neighbors to teach her to cook more exotic dishes — like potato salad.

For generations, the story of the small rural town of the Great Plains, including the dusty tabletop landscape of western Kansas, has been one of exodus — of businesses closing, classrooms shrinking and, year after year, communities withering as fewer people arrive than leave and as fewer are born than are buried. That flight continues, but another demographic trend has breathed new life into the region.

Hispanics are arriving in numbers large enough to offset or even exceed the decline in the white population in many places. In the process, these new residents are reopening shuttered storefronts with Mexican groceries, filling the schools with children whose first language is Spanish and, for now at least, extending the lives of communities that seemed to be staggering toward the grave.

That demographic shift, seen in the findings of the 2010 census, has not been uniformly welcomed in places where steadiness and tradition are seen as central charms of rural life. Some longtime residents of Ulysses, where the population of 6,161 is now about half Hispanic, grumble over the cultural differences and say they feel like strangers in their hometown. But the alternative, community leaders warn, is unacceptable.

“We’re either going to change or we’re going to die,” said Thadd Kistler, a lifelong resident who recently stepped down as mayor. “This is Ulysses now, this is the United States now, this immigration is happening and the communities that are extending a hand are going to survive.”

After years in which mostly white communities throughout the region used gimmicks to lure new residents with limited success, like offering free land or lengthy tax abatements, many are wondering if this unexpected multicultural mix offers one vision of what the future of the rural Great Plains may look like.

“The face of small towns is changing dramatically as a result,” said Robert Wuthnow, a Kansas-born Princeton professor who studied the Hispanic influx for his book “Remaking the Heartland: Middle America since the 1950s.” “The question is: Is this going to save these small towns?”

There has long been a strong Hispanic presence throughout the region, which is rich with difficult work in meatpacking plants and on farms, feedlots and oil fields. But over the last decade, as their population in the rural Great Plains spiked by 54 percent — a figure comparable to gains in metro areas in the region — Hispanic residents have pushed from hubs like nearby Dodge City, Garden City and Liberal into ever smaller communities, buying property on the cheap, enticed, many say, by the opportunity to live quiet lives in communities more similar to those in which they were raised.

In the sparsely populated western half of Kansas, every county but one experienced a decline in the non-Hispanic white population, two-thirds of them by more than 10 percent.

At the same time, a vast majority experienced double-digit growth in Hispanic population, more than offsetting the declines in seven counties and many smaller cities and towns. Those places with the highest percentage of Hispanic residents tend to have the lowest average ages, the highest birth rates and the most stable school populations.

“These towns, I don’t know what they would do without Mexicans,” said Oscar Rivera, a Honduran immigrant who lives in a community of a few hundred people and travels through rural parts of western Kansas selling prepaid phone cards used to call overseas. “It would be like ghost towns.”

One such town is Bazine, about two hours from here and little even by the standards of its neighbors. The decaying strip of downtown stores was abandoned long ago, and empty houses dotted the surrounding streets. A few years back, the high school closed and the building was sold on eBay. There was talk about shutting the elementary school as well.

“The decline was happening,” said Patricia Showalter, the mayor, standing inside the little post office she runs. “And then the Hispanic people came.”

For the first time in more than a half century, the population grew in the latest census, inching up to 334 as the Hispanic population jumped to 86 from 4. Now every house in town is occupied. A new church, La Luz del Mundo, just opened. Though there are no new businesses on Main Street, some entrepreneurial newcomers sell homemade tamales door to door.

And, most importantly to those who had watched the town become ever older, the school enrollment is growing.

In neighboring Ransom, which is almost entirely white, the student population has declined to 34 from 62 in the last eight years. Meanwhile, in Bazine, the numbers have increased to 46, up from 35. The average age in Ransom is 15 years older than in Bazine.

In Ulysses, which grew a modest 3 percent over the last decade, much appears unchanged by the years. Livelihoods are still tied to the earth, where people grow wheat and corn in the dusty soil, drill for the generous deposits of oil and gas beneath the surface and feed cows inside muddy pens that line the roads. Churches — there are more than a dozen — still play an important role, and the pace is still slower than what one usually experiences in a bigger city.

But the influx of Hispanics, a majority of whom were born in Mexico, has left an unmistakable impact.

Rachel Gallegos remembers that as a young girl she was the only Hispanic student in her class and her parents’ Mexican restaurant was the first Hispanic business in town. Now, Hispanics make up two-thirds of the school population and own bakeries, clothing stores, car dealerships and computer repair shops, some catering to Hispanics and others simply filling vacant niches.

And when children become adults, a time when residents have historically headed to bigger communities seeking opportunity, her family was becoming rooted in the community — Ms. Gallegos said that of her nine siblings and their two dozen children, all but a couple remained.

Ginger Anthony, director of the Historic Adobe Museum, which chronicles the history of the onetime frontier town, discussed the changes with dismay, pausing repeatedly to reiterate that she did not want her criticism to seem “politically incorrect.” She is so unnerved, particularly by illegal immigrants, that she recently started locking her door — saying that the police-beat column in the local paper disproportionately features Spanish surnames.

“This wave of new people coming into the Midwest, it’s not always a good thing,” she said, as a co-worker nodded in agreement. “If you talk to the average working person, a lot of them are sort of fed up. Our town isn’t what it was.”

But Hispanic residents here say they have been mostly well received, even if the non-Hispanics sometimes keep their distance. There are exceptions, like when students at a neighboring high school showed up to a basketball game in sombreros and tossed tortillas onto the court.

Jose Olivas, a longtime community developer with Mexican American Ministries, said that it took years of pressure to hire Hispanic employees at schools and at some businesses. Now employers are taking Spanish lessons, and expressing preference for bilingual job applicants.

“For a while you had to be careful,” Mr. Olivas said. “But they’ve really changed their attitudes.”

Mr. Kistler, the former mayor, agreed that there were culture clashes, but said they were slowly dissipating.

“At first every community, including Ulysses, was very unwelcoming, but a lot of that was because we wanted to hold on so tight to what we were,” he said. “In the last five years, we’ve really seen that they’re here, they’re staying, they’re part of the community. We’ve kind of gotten used to each other.”

Part of that has been dictated by demographics.

At the hospital in town, exactly half of the 102 babies born last year were Hispanic. And in a telling sign of the future of the community, 13 babies were listed as having one white and one Hispanic parent.

This article has been revised to reflect the following correction:

Correction: November 15, 2011

Because of an editing error, an article on Monday about the growing Hispanic population in small rural towns throughout the Great Plains misstated, in some editions, the population for one of the towns, Ulysses, Kan. In the 2010 Census, the population was 6,161, not 6,933. And also because of an editing error, the article referred incorrectly in some editions to the decline in the non-Hispanic white population in western Kansas. It declined in all counties but one (Ellis County) — not in all counties.

via Harvard Business Review

by Thomas Duesterberg

In what now seems a distant past, company research facilities like Xerox PARC and Bell Labs fueled innovation and growth for dominant American manufacturing firms. As the pace of technological change has quickened and the costs of R&D have grown, that model has ceased to work. Meanwhile, global competition has intensified the imperative to innovate; even long-standing manufacturing companies, such as Parker Hannifin, Timken, Kennametal, and United Technologies, strive to have 20% or more of their products be new or substantially revamped each year. Although many companies still maintain proprietary research operations (Google X lab, for example), they’re increasingly turning outward and depending on distributed or open research, in which firms or clusters of firms tap into larger networks of academic and applied work to drive new product and process development.

Of course, no single model of distributed R&D works for all companies. Large firms like Proctor & Gamble can push R&D and product innovation out through their supplier networks. P&G maintains a goal of 50% of its total innovation from outside the company, and half of that from outside suppliers. As Henry Chesbrough has argued, such a model requires rethinking internal organization as well as effectively working with the broader research community. Japanese automakers have long relied on their suppliers as innovation partners. U.S. automakers too have pushed product and process improvement out through their supply chain via the relentless drive to achieve 3% cost reduction year after year and still build competitive new models. Large firms can also buy smaller ones to acquire new technology.

Smaller companies in the manufacturing sector, competing in a global environment for increasingly sophisticated products, often don’t possess the financial strength or the in-house technical expertise to take advantage of the available science and engineering resources that can help them innovate and grow. New types of local and regional consortia or clusters are popping up in response to this problem, sometimes facilitated by public-private partnerships. An interesting example, just getting under way, is the Midwest Project for SME-OEM Use of Modeling and Simulation–a consortium of large OEMs like General Electric, Proctor & Gamble, and Deere; the State of Ohio; and several projects funded by the National Science Foundation (NSF), including the Center for Manufacturing Services, the Ohio Super-Computer Center, and the Network for Computational Nanotechnology (NCN). NCN serves as a virtual laboratory through online simulation and education. It develops models and simulation tools to predict behavior at the device, circuit and system levels for nanoelectronics, nanomechanics, and nanobio systems. It serves over 180,000 users and mounts over 10,000 simulations a year, and also provides access to supercomputers to its users as needed.

The idea behind the Manufacturing HUB, a NSF-funded initiative at Purdue and a key part of the Midwest Project, is similar to the NCN but more explicitly designed to aid small and medium manufacturers (SMEs) in getting access to models, computing power, and technical expertise to aid their product and process innovation. The models and computational resources will give SMEs access to the resources needed to solve advanced problems in areas like fluid flow, structural behavior, and material strength which are crucial to building advanced products and processes.

The common thread of these developments is building and accessing larger networks — beyond the single firm or even clusters of small firms — to create the new products and processes needed to compete in a global manufacturing market. Many questions about these models remain to be solved with actual experience — systems integration, disconnect between R&D and production, intellectual property rights issues, tragedy of the commons, leaking competitive advantage — but the trends are well embedded at this point.

What are you seeing in your business or research that can point to the strengths and weaknesses of these models?

THOMAS DUESTERBERG

Thomas Duesterberg is the executive director of the Program on Manufacturing and Society in the 21st Century at The Aspen Institute.

Coinciding with Veteran’s Day, a number of new initiatives were announced to help put veterans back to work. Here are a few resources for communities with large military operations, as well as veterans returning home.

President Obama has announced a new initiative to support veterans looking to return to the workforce. The Returning Heroes Tax Credit provides firms that hired unemployed veterans with a maximum tax credit of $5,600 per veteran. The Wounded Warriors Tax Credit offers firms that hire veterans with service-connected disabilities a maximum credit of $9,600.

Indeed.com and Google also launched products aimed at supporting the veteran community this month. At military.indeed.com, veterans can now enter their Military Occupational Code (MOC) to search for civilian jobs on Indeed that match their skills and experience. In a similar spirit, Google launched a Veterans Job Bank in partnership with the Department of Veterans Affairs.



These initiatives are timely in light of the Bureau of Labor Statistics report that put the unemployment rate for veterans who served in the military at any time since September 2001 (known as Gulf War-era II veterans) at 11.5% in 2010 (as compared to 8.7% for all veterans and 9.4% for nonveterans). Additionally, about 25% of Gulf War-era II veterans reported having a service-connected disability, compared with 13 percent for all veterans.

In a recent National Public Radio (NPR) report veterans describe a job market that presents some unique challenges. These challenges include a generation of managers who are less likely to have direct military experience (and therefore less likely to fully comprehend the range of skills veterans bring to the job) and the fact that some military qualifications do not automatically transfer to the private sector. However, David Loughran, senior economist at the Rand Corporation, goes on to describe how veterans actually have an employment advantage over the long run, including lower unemployment levels than civilians (8.7% vs 9.4%).

via The Official Google Blog

The website Google for Veterans and Families brings together Google products and platforms for servicemembers and their families. We believe it will be useful to all veterans, whether still in the service, transitioning out, or on a new path in their civilian lives. Here are some examples of what you’ll find on the site:

VetConnect – This tool helps servicemembers connect, communicate and share their experiences with others who have served using the Google+ platform.

Google Veterans Channel – A YouTube channel for discussion about military service for veterans, their families and the public. Veterans can share their experiences with each other as well as with civilians to help shed light on the importance and complexity of service. If you have not served, this is a great place to offer your thanks by uploading a tribute video.

Resume Builder powered by Google Docs – We found that Docs can be a particularly helpful tool to transitioning servicemembers seeking employment. Resume Builder generates an auto-formatted resume that can be easily edited, saved and downloaded to share with potential employers.

Tour Builder powered by Google Earth (coming soon). A new way to tell your military story. Today, you can view some sample “tours”— 3D maps of veterans’ service histories, complete with photos and videos. Stay tuned for more details and updates on the Google Lat Long Blog.

This week, we introduced the Veterans Job Bank in partnership with the Department of Veterans Affairs. The Veterans Job Bank is a customized job search engine in the National Resource Directory (NRD), which is powered by Google Custom Search technology and crawls the web for JobPosting markup from Schema.org to identify veteran-committed job openings.

The Geography of Jobs data visualization we first created in the spring of 2008 has been updated through November 2011. The animated map shows the net change in jobs over a rolling 12-month period in the top 100 metropolitan areas (by population). In layman’s terms, the size of the bubbles on the map represent the net change in jobs from April ’09 to April ’10 (for example), and so on.

About the Map
This animated map provides a striking visual of employment trends over the last business cycle using net change in jobs from the U.S. Bureau of Labor Statistics on a rolling 12-month basis. The animation highlights a number of concurrent trends leading up to the Great Recession, as well as evidence of a recovery.

The Dot-Com Bust & Recovery
The timeline begins in 2004 as the national economy recovered from the bursting of the dot-com bubble. At first, broad economic growth was apparent across most of the country. Two notable exceptions are the Bay Area — the hub of the tech boom that drove job growth during the prior decade — and several metropolitan areas within the Midwest. The map reveals that much of the industrial Midwest never fully recovered: manufacturers shed jobs while other parts of the country were adding them.

The Housing Bubble & Hurricane Katrina
The nation’s appetite for new homes is also evident. During the middle of the decade, job growth related to construction and real-estate occurred in Sun Belt states, such as California, Florida, Georgia, and Arizona. The map also captures dramatic job losses in New Orleans in 2005 as a result of Hurricane Katrina, as well as the city’s slow recovery driven largely by construction-related employment.

The Downturn Begins
By 2007, regional evidence of the coming economic downturn began to appear. Employment growth in California and Florida waned, with actual losses becoming evident in Los Angeles and Tampa. Layoffs also accelerated in the nation’s manufacturing heartland. By the first quarter of 2008, job losses in the Southeast and Midwest spread, setting off a chain of losses in neighboring areas. The same pattern was seen on the West Coast, with the epicenter in Los Angeles marching eastward to the Front Range of the Rockies.

Manhattan is an Island. Or is it?
As much of the nation was showing clear signs of entering a recession, New York City continued to boom as the flow of easy credit stimulated employment growth in the nation’s financial center. In late spring 2007, however, the financial bubble burst and New York experienced severe losses. Texas benefited from the run-up in oil prices through the middle of 2008, but began to recede by January 2009 as the energy and construction sectors weakened.

The Great Recession
Through early and mid-2009, job losses intensified across the country with layoffs peaking in August. At that time, the nation’s largest metropolitan areas New York, Los Angeles, and Chicago had also shed the greatest number of jobs from the previous year. For example, the Los Angeles metropolitan area had seen a net decrease in employment of 426,000. None of the top 100 MSAs had been immune to mass layoffs. The map shows that the bleeding had begun to stop in the fall of 2009.

A Reticent Recovery
In early 2010, the first signs of over-the-year job expansions emerged along the Texas-Mexico border and in Central Texas. By May, gains were seen along the I-95 corridor in D.C., New York, and Boston, and momentum spilled over the Appalachians into the nation’s industrial heartland in June. Net increases also appeared in San Jose and San Diego that summer. Most of the nation’s major metro areas were enjoying net job gains for the first time since before the recession that fall.

As of January 2011, only a few metros, including Atlanta, Memphis, Las Vegas, Sacramento, and Albany were still experiencing net job losses. Notably, many of the remaining red bubbles are in state capitals where budget shortfalls are having a negative impact on their recovery.

Are We There Yet?
While it is encouraging to have visual evidence of our national economic recovery, this does not indicate that all jobs lost during the course of the recession have been regained. Nor does it mean that all those seeking employment can get a job. In the chart below, we see that the total number of unemployed workers remains near a record high as more than 13 million Americans are seeking work.

Chart: Total unemployed in the US (in millions), seasonally adjusted

Source: US Bureau of Labor Statistics (Current Population Survey)

The bad news: six million more people are seeking jobs than at the start of the recession.