Sunday, April 22, 2012

Economic Development Myths

Complaints about brain drain are baloney.  That's my default setting for evaluating regional economic development policy. Now add talent shortage to the list of uncritical analyses boondoggles:

Some experts see talk of a crisis as overblown, however.

In fact, Dave Swenson, an Iowa State University economist, calls work force shortage complaints “baloney.” Iowa has recovered fewer than half of the 65,500 jobs lost in the recession.

“The lament about work force shortage is not substantiated to the degree that the rhetoric has gotten play,” he said.

Workers train in response to the job market, migrating to industries and areas where pay and opportunities provide the greatest return, he said.

“The cream of our talent gets skimmed off,” Swenson said. “Metropolitan areas draw from rural areas, and other states draw from Iowa. If you pay enough money, you get the workers.”

Does Swenson have an ax to grind? Is his voice a lonely one in the wilderness? I can't answer the first question. As for #2, no. Brian Kelsey (Civic Analytics) has been Tweeting about this very subject:

Yet another cry of worker shortage in #Texas w/ no mention of wages offered. Would expect more from academics.

I'm reminded of the strange disparity between reports from demographers and the brain drain hysteria gripping states such as Michigan. If Dr. So-and-So says there is brain drain, then what's a blogger to do? Another great link from Brian Kelsey, memes are stronger than data:

The sociologist Joel Best's recent book captures this phenomenon: "Flavor of the Month: Why Smart People Fall for Fads."

How does this bedazzling process work? Every institutional fad needs a good story -- a perplexing problem and a compelling solution.

What is the problem that Rosenstone seeks to solve? Minnesota's jobs-skills mismatch. How is he going resolve this predicament? He has made an "all in" bet on workforce development.

Where did MnSCU's "mismatch" story line come from? Credit David Olson, president of the Minnesota Chamber of Commerce and chairman of the MnSCU Board of Trustees from 2007-10.

Olson proselytized the jobs-skills mismatch for the chamber while simultaneously reshaping MnSCU's educational mission as workforce development.

Replace "jobs-skills mismatch" with "brain drain" and you have a neat summary of six years of blogging futility at Burgh Diaspora. As I dig into the world of economic development, I keep unearthing more examples of meme or mesofact trumping data analysis. My favorite example is the journey of superstar talent attraction expert Joe Cortright to Akron, OH to offer a compelling solution to the city's perplexing problem of brain drain. Baloney.


Allen said...

Looking at Minnesota's census numbers over the last 2 decades, would it better to say they have a problem attracting out of state talent than a brain drain? Either way it, from that one simple measurement, it appears that more skills are leaving the state than arriving.

Jim Russell said...

I think it would be better to employ a rigorous analysis of the purported skills mismatch. We have the technology:

Tom Mc said...

What I am hearing is that most of these folks are snake oil economic development experts that are milking our local governments for tax dollars to fight a ghost. If there we no promises from the public sector to the private sector that they would provide a lower cost skilled labor force, then the private market would sort this out with employers either moving, training or paying hire wages or the talent would retrain, move or starve.

Elected official wishing to keep their well compensated on the back end jobs, dole out tax payer dollars to companies to attract them. Then the companies will say there is not enough talent and the politico send out the usual snake oil salesman to drum up the same old nonsense and they get paid. The companies get off the hook hiring because there is no talent in the area or it cost more.

So the politicos then give them larger tax breaks to keep them. They stay and the politico claim they save xyz company from leaving with effectively stopping brain drain, now we need to work hard on our skill mismatch. repeat the cycle.

Brian Kelsey said...

I'm going to talk about this during my presentation at the NAWDP annual conference in a couple of weeks. I'll let you know if I get booed out of the room.