Wednesday, December 02, 2009

Shrinking City Brain Gain

Both Null Space and the Cuyahoga County Planning Commission Weblog reference a report titled, "Immigrants and the Economy: Contribution of Immigrant Workers to the Country’s 25 Largest Metropolitan Areas". Chris Briem notes, "Pittsburgh ranked number 1 in terms of the net benefit of international immigrants to the regional economy." One of the comments takes a pessimistic view:

I hate to be negative, but the study also shows pgh has the smallest share of the labor force among the 25 metros. And, of course, if trends keep up pgh will be out of the top 25 in five years (replaced by Orlando).

Pittsburgh confounds common (i.e. rudimentary) demographic analysis. The headlines remind us that the population is shrinking and more people are leaving the region than moving into it. This is interpreted as an indication of economic weakness and that the leadership is doing something wrong. Briem often posts in vain why all this anxiety completely misses a more important story:

Seriously, there are today roughly 300K jobs located within the city limits of Pittsburgh, which is roughly the exact number of jobs that were located in the city in 1960. Few cities like Pittsburgh can claim any such comparison. When you realize that a lot of those jobs in 1960 were retail and service jobs supporting the much larger population, then the ability of Pittsburgh to retain jobs is a remarkable story.

The numbers of immigrants may be small, but the impact is disproportionately large. That might help to explain why some are calling for the creation of an entrepreneurship visa. From Vivek Wadhwa:

Richard Herman, a Cleveland-based immigration attorney and co-author of the upcoming book Immigrant, Inc.—Why Immigrant Entrepreneurs Are Driving the New Economy (and how they will save the American worker), says that allowing thousands of founders to get special immigration status could spur sufficient economic activity and innovation to realize billions of dollars in real economic gains for this country within a short time span. We're talking years, not decades.

How palatable would such a program be politically? U.S. Representative Jared Polis (D-Colo.), himself a former entrepreneur, is developing legislation to make it easier for foreign founders of investor-backed startups to secure visas to remain in the U.S. On the other end of the political spectrum, even Newt Gingrich, the Republican former Speaker of the House, has blogged about the need to make the country "more accessible to skilled immigrants." He wrote this after witnessing "the dynamic entrepreneurial and high-tech business culture in Tokyo, Beijing, and Seoul"—countries with which we are competing for top talent. Representatives of both ends of the political spectrum can agree on this issue.

Relative to the population of the entire world, the numbers of "top talent" are very small. The issue is total numbers of in-migration, but the quality of that in-migration. The result is a wealthier and more productive city that no one notices because its population declines every year. Considering all of the above, perhaps you can see how my proposed boomerang migration incubator could work.

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