TIP Strategies is a privately held Austin-based economic development consulting firm committed to providing quality solutions for public and private‑sector clients.
This blog is dedicated to exploring new data and trends in economic development.
As the baby boomers gradually retire, we can expect the overall size of the talent pool to decrease over the next twenty years. Because generations X and Y are both smaller cohorts, competition for talent among companies as well as communities will increase.
To maintain a sustainable workforce a community must retain and attract young professionals. While workers of every age contribute to the local economy, the presence of a young, talented, and highly educated workforce is critical to economic growth. Young professionals – generally defined as ages 25 to 40 – are educated, energetic, and mobile. Highly educated young professionals are in high demand.
Chart: The Link between Learning and Earning
Expected Lifetime Earnings Relative to High School Graduates, by Education Level
This chart illustrates the connection between educational attainment and lifetime earning potential relative to a high school graduate. For example, an individual with a bachelor's degree is expected to earn, on average, 63% more than an individual with only a high school education. (If a high school graduate earns $30,000 annually, for example, the college graduate would earn $48,900.) Earnings potential for an individual with a professional degree is 3.09 (or 309%) greater than the same high school graduate.
Mobility, Migration, and an Inverted Paradigm
In the past, economic development focused on recruiting and retaining businesses, with the underlying assumption that workers would follow the jobs. This paradigm has shifted dramatically—if not inverted—over the last decade. It is not uncommon for individuals to first decide where they want to live and then find a job second.
More than 10 million Americans moved from one county to another during 2008. The map below from Forbes.com visualizes those moves. Click on any county to see comings and goings: black lines indicate net inward movement, red lines net outward movement. Click on the map to access the interactive features.
'Rosie the Riveter' got her MBA
One talent trend that has accelerated during the Great Recession is the gap between the genders. The recession has disproportionately affected men with lower levels of educational achievement, primarily because they comprise most of the workforce in the construction and manufacturing sectors.
Chart: National Unemployment Rates by Gender
The above chart shows that unemployment rates between men and women were similar until 2008, when unemployment for men increased at a faster rate than women. Throughout the recovery, unemployment for men has remained about 2% higher than for women. The role of women--particularly young women--in the national economy is increasing for a number of reasons: more women than men are graduating from college; the wage premium for college degrees is increasing; and high-paying jobs in male-dominated fields such as manufacturing and construction are disappearing.
Women now actually outearn men in one demographic: people who are single, childless, and between the ages of 22 and 30. U.S. women earn 8 percent more than men, on average, according to a new report from the research firm Reach Advisors. The authors of the report looked at data from 2,000 towns and cities around the country, and found three main community-level factors that tend to boost women's earnings relative to men within this demographic:
(1) The community has a heavy dependence on knowledge-based
jobs, which in turn serves as a magnet for well-educated women.
(2) The community has majority-minority population (i.e., non-Hispanic whites are less than 50% of the total population). This is in part due to Hispanic and African-American women being almost twice as likely as their male peers to earn bachelor's and graduate degrees.
(3) The community has seen a decimation of the manufacturing employment base, making it more difficult for men without similarly high levels of education to earn solid incomes.
Talent is an important component of competitiveness for economic development professionals to keep in mind because it speaks to an essential asset that any company will consider before locating in your community. Engaging students, young professionals, and retirees is an important first step in talent retention; establishing a basis for recruitment and attraction campaigns requires significant, long-term investments in amenities.