R2I: Return to India

I'm recycling an earlier post, from November of 2006, about the Return to India (R2I) movement. R2I is, of course, the template for R2P. Thanks to Jon Udell, you can learn a bit more about R2I. Without much further ado ...

During my conversation with InfoWorld's Jon Udell, he broached the subject of the Return to India (R2I) Movement, a diaspora experience worth investigating. Save the tech boom in Bangalore, there are a number of similarities between the Indian Diaspora and the Burgh Diaspora. However, I'm not convinced that Pittsburgh expatriates harbor a similar burning desire to return to their homeland.

Nonetheless, perhaps the Pittsburgh region would benefit from Pravasi Bharatiya Divas:

Pravasi Bharatiya Divas aims at bringing the expertise and knowledge of the Indian overseas community to India and integrating it into India's development process. Pravasi Bharatiya Divas is focused to highlight networking opportunities and collaborating them to confer a mutual developing platform. Generating this synergy to excel together towards a bright India along with the Indian overseas community is what Pravasi Bharatiya Divas 2007 proclaims with its head held high.

Think of Pravasi Bharatiya Divas as a government sponsored festival in the homeland that celebrates the diaspora. Some Indians might be enticed to return, while others seize the opportunity to do business. At the very least, Pittsburgh could signal to its own diaspora that it is ready to foster a relationship.

Edit: The seventh Pravasi Bharatiya Divas kicks off today.

America Hates Steelers Nation

If you are a defensive Steelers fan, then don't read this. While I count myself among the Black and Gold faithful, I can appreciate why so many other people think Steelers Nation is obnoxious. Wearing my blogger hat, I got the biggest kick out of this comment from the makebelieve Duquesne anthropology professor:

But I can’t seem to connect the dots on the Steelers’ fan base. Pittsburgh’s population is just a little more than 300,000, and it has regional competitors for fans in Philadelphia, Cleveland, Buffalo, Cincinnati, Washington, and Baltimore. I’d like to attribute it to the team’s massive success in the 1970s just as the steel industry failed, displacing fans across the country… but that simply doesn’t account for the numerous Steelers bars in every American city. ...

... It almost seems to be a pervasive, debilitating personality trait, in which seemingly intelligent people find ways to justify their fandom of a team they have little or no regional connection with, just because cheering for a team that tends to win more satisfies some aspect of their malformed personalities.

I'm one of those malformed personalities. Some Pittsburgh natives refer to us as bandwagon Steeler fans. That I insist on adding an "s" to "Steeler" only further reduces my Yinzer cred. There are two "Steeler" Nations, which is why I prefer to write "Steelers Nation." There are the true Pittsburgh-based fans and there are the products of the 70s dynasty, particular the people who were born in a city or region without a franchise.

I've noticed that some bandwagon fans, even those who have never glimpsed the Three Rivers, have an attachment to Pittsburgh the city. Thus, the Burgh Diaspora can include the even bigger Steelers Diaspora. As I advance the R2P project, I will further explore this important connection.

Coming Home

Here is the story of an expatriate planning to return before she even left Pittsburgh:

We knew that neither of us was brimming with enthusiasm for the move to Texas, and that we were already wondering how to get home. It was with heavy hearts that we had our last night in Pittsburgh. So that last day, we resolved that we would come back after all - no last night for us. Not goodbye, but see you later.

So now, it is finally the year that we move home. No cold feet for this move - the resolution stands firm. That’s what New Year’s Day means this year, and I don’t want to change a thing.

Pittsburgh 251, the Year of the Boomerang.

March of the Cake Eaters

Big steel is now seeking some bailout love with manufacturing making a hasty retreat from the global economy. Such gloomy news still affects Pittsburgh despite the region's latest reinvention. National Public Radio elaborates:

-- Jay Rosen wants to know why, when the Senate spikes a rescue for U.S. automakers, Japanese stocks go down. One answer comes from Vinny Catalano, president of Blue Marble investment firm and keeper of a cool blog.

-- Automakers in Detroit say they're too big to fail. As business historian John Steele Gordon tells David Kestenbaum, we've heard that one before -- from the U.S. steel industry.

-- Last year, Adam Davidson went to Pittsburgh to see what remained of the steel industry and its workers. Also, to find out what a "cake eater" might be.

Davidson defines cake eater as the upper class part of the steel industry. The point of his report is how the cake eaters have taken over the entire process of what is left of manufacturing in Pittsburgh. Even the "blue collar" parts of the job require extensive education.

Janko was kind enough to bring the NPR piece to my attention. I asked him what became of Youngstown's cake eaters. He informed me that city cake eaters left. The evidence is the availablity of cheap mansions, many of which border the urban treasure Mill Creek park. My guess is that the cake eaters did not abandon Pittsburgh, at least not to the same extent experienced in Youngstown. Instead, the cupcake class runneth over. In the early 1980s, talent didn't leave Pittsburgh for dead so much as it played the geographic mobility card in order to escape the stiff competition for the jobs in the new economy.

R2P: Return to Pittsburgh

I'm ringing in 2009 with a reinvention of this blog. Burgh Diaspora was born on June 1st, 2006. I set out to explore the economic potential of Pittsburgh's diaspora network. Along the way, I learned a great deal about the geographic mobility of talent and the anachronistic means of developing a local labor pool. Also, I discovered how many other Rust Belt cities shared the same set of problems. I morphed the blog into Cleveburgh Diaspora, an attempt to build a larger identity geography. My aim was to grow the Tech Belt between Cleveland and Pittsburgh into a coherent economic region. I'm betting that any kind of successful mega-regional project will depend on Pittsburgh's fate. The biggest drag on the Burgh's most recent renaissance is the lack of people with certain skills. The goal of R2P: Return to Pittsburgh is addressing this shortcoming.

Bill Toland's latest "Diaspora Report" inspired me to undertake this new initiative. The Pittsburgh Regional Alliance is looking to "fill the talent pipeline" but adamantly denies designs on facilitating more boomerang migration. Despite the troubled economy, the war for talent still looms on the horizon. Looking at everyone save loyal expatriates for needed talent is foolish. China is calling home its best and brightest. The numbers are small, but few people are really ready to help China maintain a head of steam. Furthermore, the geographically mobile may not be interested in a cloudy climate and a distinct lack of urban chic. Austin or Pittsburgh?

I still contend that the Burgh Diaspora is a unique economic asset. The lack of sunshine or proximity to the ocean will hamper Pittsburgh's ability to fill the talent pipeline. In a labor shortage, that's a huge disadvantage. Boomerang migration won't abate population decline, but it can fill key positions such as a CEO for a green tech startup. Like China, Pittsburgh should be highly selective in the expatriate members it courts.

Since the Pittsburgh Regional Alliance sees fit to ignore Carl Kurlander's call for the Burgh Diaspora to come home, I've decided to pick up the slack. My plan is to leverage what I've learned over 2.5 years of blogging and chronicle my own attempt to return to Pittsburgh. I will teach other expatriates how they can successfully move to Pittsburgh while filling the talent pipeline with the kind of skilled workers the region most needs.

TiE Cleveburgh

The Cleveland Plain Dealer provides a follow up to the TiE Ohio story, which mentions a provocative and ambitious mega-regional initiative in the works:

The chapter's next step is to begin matching people who want to launch businesses with experienced entrepreneurs who can coach them.

"That's the TiE model," [said Baiju Shah, president and CEO of BioEnterprise and one of the founders of the local TiE chapter].

The TiE connection will allow Cleveland-area businesses to tap talent and resources from Silicon Valley to London, England, he said.

Organizers plan to hold more focused meetings in the future, exploring topics like biotechnology, Shah said. They also envision convening a Great Lakes conference to foster the concept of a "tech belt" stretching from Chicago through Cleveland to Pittsburgh.

TiE Ohio needs a geography lesson. Not only is the scale too big, but the Rust Belt is really two mega-regions, not one. There is some coherence to the mega-regional conception of the Great Lakes, but I see a number of economic sub-regions, or "corridors". I can imagine (actually, see) venture capital flowing between Cleveland and Pittsburgh, but all the way to/from Chicago? And if there is a tech belt for Chicago it is north and west of the city. Something as large as Minneapolis-Chicago might work, but even that is a stretch. Chicago-Milwaukee would be more like it.

Stop Investing in Shrinking Cities

CEOs for Cities is soliciting opinions about the "City Beautiful" approach to urban economic development. The debate is played out in a Boston Globe article and one economic development expert from New Brunswick lampoons the policy recommendations as evidence of the "Floridian virus" taking hold, referencing the obvious influence of Richard Florida's work on the preferred strategy. The connection between "City Beautiful" and Florida isn't that clear cut, but there exists plenty of common ground between the research in question and the Creative Class hypotheses. But I don't know if one necessarily validates the other. Once again, the dichotomy (e.g. Joel Kotkin versus Richard Florida; Flat World versus Spiky World) strikes me as a false one.

There is another controversy embedded within the conclusions that is much more vexing and it concerns the expected federal economic stimulus package:

If the goal of a stimulus package, or any economic development plan, is to stimulate growth, does it make sense to continue investing in places that will never be attractive?

Many of the 15 variables that Carlino and Saiz have identified as triggers for new growth - like coastlines, historical buildings, and a lack of rainy days - are not something a city can choose to build. Rather, they are permanent elements of place based on irreconcilable fates of history and geography. Why send another federal dollar to bolster manufacturing in Akron when it could support a golf course in sunny Phoenix?

The suggestion is to invest in the places where talent already prefers to live, not the glum cities currently shrinking. Upon my first reading of the Globe article, I immediately thought of Chicago and globalization. Chicago essentially invested in the healthiest part of the city, the rest be damned. Globalization would seem to reward urban triage. Only the fittest places will survive.

Another reading of the article revealed to me a loophole in this geography. What is popular now may not attract talent in the next decade. If Rust Belt Chic is the latest urban fad, then the geographically mobile will stream to rebuilding postindustrial cities. All the money poured into the Sun Belt might go to waste.

I think the main problem is that most Americans are not that geographically mobile. If Obama ignores all the people "stuck" in the Rust Belt, then he risks alienating a large part of his constituency. We all saw how politically divisive the bailout of the American auto industry was and still is. Sometimes the best policy is the worst choice.

Cleveburgh Immigration Update

Richard Herman has a new post up. I'll focus on the study from two scholars at the University of Akron that Richard mentions. Part of the long passage Richard presents at his blog:

Population growth normally happens in two different ways. The first is due to natural processes where the number of births exceeds the number of deaths in a given area. The second is due to migration with individuals moving into (immigration) and out of (emigration) the area. For years, the United States and the Northeast Ohio region have faced what has been termed as zero population growth or a relative equity between the number of births and the number of deaths.

However, as the dominant middle-aged population in Northeast Ohio reach their senior years, the pendulum may actually shift to more pronounced negative natural population growth where the number of deaths significantly outnumber births.

In this case, population growth in the region will be even more dependent on immigration.

Attracting more immigrants to the Tech Belt is absolutely vital to the region's economic prosperity. Increasing domestic in-migration or plugging the brain drain will not halt the population decline. Cleveburgh needs to aggressively court foreign-born talent. Despite growing unemployment, worker shortages have not abated. Countries such as Australia and Canada are forging ahead with plans to attract high-skilled immigrants.

The Talent Blueprint Project deserves the full support of anyone concerned with the economic development of Northeast Ohio. As Richard Herman's efforts and this white paper from the University of Akron make clear, the benefits of increasing immigration are undeniable. Unfortunately, Ohio has it backwards. The focus is on decreasing out-migration and cultivating local talent. We've seen these parochial initiatives before and they don't work. Voters and politicians seem to have short memories. These desperate times call for new measures and the Talent Blueprint Project is worthy of your consideration.

Pittsburgh VC

New York Times story about Florida's attempt to grab more of the venture capital market share lists Pittsburgh as a hotbed:

Venture capital is spreading outside its historic hotbeds in Silicon Valley and New England, but so far, Florida has not been getting a significant chunk of the money. The fastest-growing regions for venture capital investment over the last decade are New Mexico, Pittsburgh, Seattle, Los Angeles and the District of Columbia, according to the National Venture Capital Association. Florida will receive only a small fraction of the $30 billion that is expected to be invested in start-ups this year.

I suppose Pittsburgh skeptics could pick apart the numbers. But at some point, the latest renaissance becomes more than regional boosterism. The current economic recession began before most people recognized the downturn. I think Pittsburgh's revitalization is further along than most analysts are willing to admit. My sense is that Pittsburgh has already moved beyond the tipping point.

I'll risk overstating the case by dragging the PNC Bank takeover of National City into consideration:

Pittsburgh-based PNC will be a much more formidable competitor for the remaining local banks and will be a national powerhouse as the fifth-largest bank in the United States. That will make life a little tougher for Northeast Ohio's dozen or so major banks. ...

... While other banks may be breathing a sigh of relief about pricing, they will face a much more daunting competitor than National City was in recent years, said banking expert Fred Cummings, president of Elizabeth Park Capital Management in Beachwood.

PNC, by contrast, is mighty and doesn't have to be distracted by the financial problems that most banks face. It hasn't cut a lot of jobs or its $2.64-per-share annual dividend. PNC actually increased the dividend this year.

Unlike National City, which has been on defense for most of the past two years, PNC will have the luxury of being on offense.

"When you say who are the most stable banks in [Cleveland], you have to say PNC and U.S. Bank," Cummings said.

Pittsburgh's financial district has a sound anchor in PNC. Pittsburgh will fund a big share of Rust Belt redevelopment and entrepreneurial activity. Pittsburgh is booming while other cities and states are going bust. To some extent, the recession is catching up with Southwestern Pennsylvania. But not enough to bury the stark economic contrast with its regional cohort. I'm liking Pittsburgh's position when the national economy starts its recovery.

Steelers Nation in China

Globalization is good for the Steelers, bad for the Browns.

Stuck in Columbus

One of the defining features of the current economic crisis is the large number of Americans unable to relocate for purposes of gainful employment. The "Global Squeeze" is undermining domestic geographic mobility with horrifying results:

In Ohio, which has shed 100,000 jobs in the past year, Gov. Ted Strickland (D) and his budget team spend a lot of time delivering bad news to constituents and plotting ways to wring money from the federal government. He announced $640 million in cuts for the budget year ending June 30, for a total of $1.9 billion since the economic crisis began.

"We're not crying wolf. This is real," Strickland said in an interview in his statehouse office, pointing to charts that project the most serious erosion of state income in 40 years and a two-year budget deficit of $7.3 billion. Revenue shortfalls in the upcoming two-year budget could amount to about 25 percent of the state's discretionary spending.

Strickland recently picked up the telephone and called Rahm Emanuel, the incoming White House chief of staff. When he heard the recorded voice of his former congressional colleague, he left a message: "Rahm, it's Ted. You've never failed me and I need $5 billion."

The despair in Columbus, Ohio is shocking. My image of the city is one of a university town with a growing tech scene attracting a number of talented graduates from Pittsburgh schools. That Columbus still exists. The region is undergoing the same kind of globalization transformation that Chicago endured during the 1980s. Contrast Chicago's East Side neighborhood with that of Lake View, as Ted McClelland does to open his book "The Third Coast", and you'll begin to understand where Columbus is heading.

The New Argonauts of Columbus aren't living in the areas with boarded up houses and long lines of people seeking government assistance. If the regional economy were to collapse, then these economic nomads might move as far away as China. But those lacking a high school diploma, let alone any college experience, have no such options. They have nowhere to go or lack the means to pull up the stakes and head to North Dakota. The Mobility Paradox is coming to fruition.

California Diaspora

Californication is a phenomenon at least two decades old. States such as Colorado and Washington have well established antipathy towards the real estate refugees in search of a more affordable life. That out-migration from California is now news is, well, news:

A noted historian, Joel Kotkin, recently wrote that the net out-migration of residents indicates a state in deep trouble — trouble that will only get worse because of state government’s dysfunction, and the widening gap between California’s rich and poor.

At the same time, however, a study released by the Pew Research Center adds credence to California’s reputation as the place to be — still. While Californians are often depicted as rootless souls in search of the next good wave, the plain truth is that nearly three-quarters of the folks born in this state stay here.

The curious element is that Californians need reassurance that there isn't an exodus going on. Immigration has, for quite some time, kept the state from being America's capital of shrinking cities. And a 75% immobility rate is not worth celebrating.

IF Pittsburgh is sincerely interested in "filling the talent pipeline", then the region should try to tap into this out-flow. I've heard that Pittsburgh could use more software programmers. Look no further than Los Angeles. Pittsburgh has strong links there and the talent could further fuel the growth of the emerging economic niche of distance-trust technologies.

30,000 Jobs Available in Pittsburgh

The Allegheny Conference on Community Development has finally launched its talent initiative. Perhaps I buried the lede in my post about China's quest to reclaim a few choice expatriates from the States. No matter because Bill Toland more than picks up my slack in his latest Diaspora Report:

"This is not a boomerang initiative," says DeWitt Peart, president of the Pittsburgh Regional Alliance. The Alliance, part of the Allegheny Conference, is trying to bend the ears of that fugitive talent via imaginemynewjob.com, a new jobs portal that lists 30,000 Pittsburgh-area positions. ...

... "This is a talent initiative," Mr. Peart said. "We need to find a way to fill the talent pipeline in this region ... if someone is looking to relocate, we think Pittsburgh is better off than a lot of other regions."

Why is the Pittsburgh Regional Alliance so adamant in its denial of launching a boomerang initiative? Mr. Toland makes a compelling case that Mr. Peart is playing fast and loose with the facts. The target of the "talent initiative" is the Baltimore/DC area. Granted that a great deal of Pittsburgh's in-migration comes from this region, but there is likely a substantial number of returnees in that flow.

I'd have to see more of the marketing campaign in order to offer a salient critique. I don't know the goals of the talent initiative. However, there are three demographics that could "fill the talent pipeline":

1) Urban professionals looking to start a family or with a young family. This group typically is looking at a move from the city to the suburbs.

2) College graduates are an important group. I'd bet that Mr. Peart is satisfied with the production of local colleges and universities. This talent initiative doesn't appear to be targetting this group.

3) Foreign born talent, particularly those already residing in the United States, is highly geographically mobile. Unfortunately, there is no indication that the Pittsburgh Regional Alliance is interested in attracting high-skilled immigrants.

Group #1, loosely defined, appears to be on Pittsburgh's radar. Given the evidence available to me, I predict the initiative will fail. However, I suspect that the goal isn't to "fill the talent pipeline" with people for the 30,000 available jobs. Given how Mr. Toland frames his introdution to this Diaspora story, he may share my suspicion. I'm certain that a powerful job aggregator won't spark an influx of workers. Locals will benefit the most from this one-stop job hunt.

From the efforts of Alberta or North Dakota, I've learned how hard it is to attract labor from outside of the region. But Pittsburgh isn't that desperate for talent. The latest from the Pittsburgh Regional Alliance better be a part of a larger picture. Is the plan available for public consumption? I'd like to read it.

Diaspora Christmas

The holiday season reminds many of us how difficult geographic mobility is on families and communities:

There's my sister who lives in Virginia and my brother and his family in Nevada. Then there is my other brother who lives in Ontario. I can't forget my aunts, uncles and cousins who live in the Boston area. And I have to connect with my cousin in Washington. Of course, I need to try and connect with the many friends that have moved away from New Brunswick over the years and are now living in Ontario, Alberta, New York and Virginia. I feel worse for my parents as I am the only one of their four children that has remained in New Brunswick.

Think of it as my own little Campbell diaspora or far-flung network of ex-New Brunswickers most of whom left New Brunswick for economic opportunity elsewhere. You can probably see why I am so passionate about fixing the province's structural economic problems. For me it is intensely personal.

If there was more economic opportunity in New Brunswick, would less people leave? Actually, the opposite is true:

Which brings me to this week's mystery: Why do people still live in Detroit, which has suffered so much for so long? Why not move to Chicago or New York? People originally moved to places like Treorchy because there was coal to be mined. Now that the mines have closed—and the Burberry factory too—why do they stay? ...

... Even when we look only at internal migration, the barriers are formidable. Wherever people seem particularly keen to own their own homes—as in the United Kingdom, Spain, and some U.S. states—employment suffers as a result. English economist Andrew Oswald has shown that across European countries, and across U.S. states, high levels of home ownership are correlated with high levels of unemployment. More conventional factors such as generous welfare benefits or high levels of unionization don't explain unemployment nearly as well as the tendency to own houses. Renting your home and staying flexible do wonders for your chances of always finding an interesting job to do.

Recent research in the Economic Journal suggests that people who own their own homes form denser local networks, which help unearth local jobs. Still, the jobs tend to be less well-matched and commuting distances are longer. So, professor Oswald is right to argue that we should do everything possible to free up impediments to renting or to selling a house and buying a new one. It would be handy if we were allowed to build houses near Manhattan, too.

In short, staying put is economically disadvantageous and we tend to see more rooted people in poor areas. Except in extreme cases (acute economic shock), out-migration is lowest in the regions with the fewest jobs.

I'll put it another way: Decreasing geographic mobility is bad for the economy.

Windsor, Ontario is taking the attachment to place to the extreme. The local government is planning to pay for a shuttle service that allows a family to remain while the primary wage earner heads off to the Western Provinces where work is plentiful:

A recent Statistics Canada survey showed Windsor had the worst population decline of any major Canadian census metropolitan area in 2006-07. The Windsor CMA -- which includes Amherstburg, LaSalle, Tecumseh and Lakeshore -- lost a net 1,744 residents due to migration.

The troubling trend prompted Windsor Mayor Eddie Francis to propose a commuter service that would shuttle workers to and from Western Canada. ...

... Francis describes his plan as a temporary measure designed to ease both the city and workers through an economic slump that isn't going to turn around anytime soon.

"It's only one element of a broader perspective in terms of economic development here," he says. "Obviously, we need to continue to focus our efforts on creating jobs here, but we also need to be realistic in our assessment of the economic situation and challenges we are facing. The economic challenge we are facing clearly indicates that we are going through a transition. So, we either lose these people for good, as we know is happening. They're moving out west. They're relocating their entire families. Or, we provide this program and keep these people and their skill set."

That is the mother of all commutes. For those not willing to endure the separation, they stay and help to depress local wages:

The Windsor couple tried the long-distance route for almost four months after Duguay, laid off about year-and-a-half ago from Windsor Tool and Die, started working for a company in Wetaskiwin, about 60 kilometres south of Edmonton. He returned home late last month, after securing a position with Northstar Technologies -- a Lakeshore company that services the aerospace industry.

Duguay is taking a $8 an hour pay cut to remain in Windsor, but Alberta's higher cost of living cancels out the higher wages, says Darlene.

This story makes me think of Richard Longworth's book, "Caught in the Middle." The Midwest enjoyed such a long duration of prosperity that its people became used to the idea of sticking around through a number of economic cycles. Cities built by immigrants and labor from the South transformed into museum communities. Multiple generations had no reason to relocate and the workforce, for lack of a better word, eutrophied. To give progeny a reason to stay is replicating the same efforts that handicap the Rust Belt today.

Pittsblog Zombie

Pittsblog is now undead.

Rust Belt Economic Churn

This letter to the editor of the Indy Star reminds me that perception often needs a reality check:

Statistics compiled by the local electronics industry confirm that 80 percent of the companies that leave Indiana go to other Rust Belt states. Ohio is the number one recipient, Illinois second and Michigan third. China, Mexico and California are way down on the list. This trend shows all signs of continuing at the same rate regardless of the positive spin showcased in [the Dec. 13 article "The Silicon Valley of the car industry" by Ted Evanoff].

When businesses leave Rust Belt cities, how far do they actually travel? In my mind, the Indiana electronics industry story makes a good case for more mega-regional collaboration.

Linking Pittsburgh Immigration and Bakery Square

Today's tale begins with an editorial in the Pittsburgh Tribune Review criticizing the EB-5 visa program:

The Philadelphia Convention Center Authority agreed this month to consider a low-interest loan from the "Welcome Fund," overflowing with $73.5 million from 150 Chinese investors.

Public projects are notorious white elephants with voracious appetites for funding. They are no more commercial enterprises than the EB-5 scheme is legitimate immigration policy.

Thanks to a Richard Herman tip, I blogged about the EB-5 investment in the convention center back in July. Initially, the board of the project balked at the foreign capitalization. Given the Trib's admonishment, I gather the money is now flowing.

I gather that the Pittsburgh press is unaware of an EB-5 development in its own backyard. At least, I couldn't find any mention of it. Recently, the EB-5 program in Western Pennsylvania was extended to the entertainment industry. I was trying to find out if anything was in the pipeline and I came across a key actor in Philadelphia's forays into EB-5 investment: CanAm Enterprises.

CanAm Enterprises, based in Brooklyn, specializes in EB-5 investment projects. If you visit the company website you'll see that not only do they help Philadephia, but Western Pennsylvania (i.e. Pittsburgh) and Los Angeles as well. The LA connection concerns the film industry, which helps explain how the entertainment industry in Pittsburgh is now party to this foreign capital pipeline.

CanAm has a projects page with only one investment opportunity listed: Bakery Square in East Liberty (Pittsburgh). CanAm is acting as a broker, looking for 70 investors to the tune $35 million (and 700 local jobs) in exchange for permanent residency in the United States. In my opinion, this is exciting news.

I blog about this EB-5 story in hopes that other capital starved big ideas will explore this option. The visa is not without controversy, but the Tribune Review editorial is muchado about nothing. Foreign investment should be welcome in Pittsburgh. And I'll reiterate that more communities than Pittsburgh are eligible. The geographic scope is quite generous. Pay attention, Erie. You might be able to develop the Koehler Brewery site.

Contemporary Geography of Captive Labor

During my morning round of blog reading, I read a post that started the wheels turning:

He then shocked me by saying that the government needs to go out and attract in the largest multinational player in that specific industry. He said the large players anchor the cluster and use a lot of SMEs in the market. Even if the SME (like this guy’s firm) doesn’t get any work they benefit from the cluster that builds up around the large anchor player (he cited the auto plants in Tennessee). He proceeded to name a number of services that they had to use suppliers in Montreal and beyond - increasing costs and reducing efficiency. These suppliers gravitate to the areas that have the large industry players.

By the way, that response was to my question “How do we create an environment that leads to 50 more firms like yours springing up in New Brunswick”.

Then I said to him that some company leaders have said they don’t want these big firms coming in and bidding up the price of labour and stealing their talent. His response? “That means we just have to work harder and smarter.”

A few months ago, I was doing some background research on Google's presence in Pittsburgh. I read that some business Yinzers were less than thrilled about the new office opening. The reason cited was the competition for talent. Think about that. In a region so anxious about people leaving, the business leadership was complaining about a big company coming in an eating up all the talent. The fears proved to be unfounded and as I've come to appreciate, Pittsburgh has a glut of well educated workers. The local colleges and universities produce many more graduates than the regional economy can consume. There is more than enough labor to go around, which helps explain the relatively low wages. What shortage?

As the Atlantic Canada party talk demonstrates, enterprise appreciates the dividend. I'll let you in on another secret. Politicians are keen to deliver captive labor markets to the parochial captains of industry:

While Ohio's universities provide students with a first-rate education, nearly one-third of graduates leave the state to find work. This brain drain leaves Ohio employers struggling to fill thousands of jobs each year.

Many Ohio businesses have expressed concerns about a growing "skills gap," in which companies struggle to find employees with the right training for high-tech industry jobs.

This first-of-its-kind summit revealed the common challenges Ohio universities face. We determined the need for increased integration and communication between the academic and business communities. We discussed expanding curriculum and degree options, especially those connected with the high-tech industry.

The problem was clear: Ohio has workers without jobs and employers without workers. The question became how to connect the two communities?

Well Senator Sherrod Brown's effort seems worthwhile, he's trying to figure out how to tie down Ohio's labor pool. The unemployed workers tend to be the least educated, and therefore the least geographically mobile:

Highly educated people are much more likely to be mobile: more than three-quarters (77 percent) of college graduates have moved at least once compared to 56 percent of those with a high school diploma. Younger Americans, unmarried people, and those who are foreign-born are among the most likely to move. The Midwest is the most rooted region; the West the most mobile. The main reasons stayers stay: family ties, a desire to stay in their home town.

"Rooted" people will take less money in order to stay in their hometown. Talent isn't leaving Ohio at a remarkable rate and local business isn't that starved for labor. What Ohio enterprise wants is workers at a discount. These companies don't want to compete with Austin, Seattle or Denver for the highly-skilled. Better to grow them locally and dilute the labor pool. Importing labor is expensive and difficult. A better idea is to have the state absorb those costs through subsidized training.

The native constituency eats up these kinds of initiatives. Better to hire an insider than an outsider. Labor is complicit because of the power of place, which greatly serve the interests of industry. But the aim isn't to increase the number of job in a region. The goal is to keep wages low. The best way to do that is to tie workers to a particular location.

The people most willing to move will earn the most money.

US Migration Year In Review

July 1st marks the advent of a new migration year, but the data from the previous year doesn't come out until now:

"People want to go to where it's warm and where there are a lot of amenities. That's a long- term trend in this country," said William Frey, a demographer at the Brookings Institution in Washington.

"But people have stopped moving," he said. "It's a big risk when you move to a new place. You need to know that moving and getting a new mortgage is going to pay off for you."

The big news is that more people are staying put and the population shift to the South and West is abating. Relocation is a scary prospect, the information about a new place far from perfect. The best educated will be the ones moving to improve.

The news is particularly dire in Michigan:

The state's decline is rooted in mobility: The rising number of people who are leaving the state far exceeds the number coming into it. The state had a net loss of 109,257 people to domestic migration, up from 95,787 a year earlier and 57,257 in 2005. Immigration from abroad, once able to balance the domestic losses, continued to decline as well, with just 16,627 coming to Michigan, down from its recent high of 23,328 in 2001.

"It's that out-migration. It keeps going -- more and more and more," said Kurt Metzger, director of the Detroit Area Community Indicators System, a local nonprofit. "There's nothing else."

Births rose and deaths declined for the third consecutive year, pushing the state's "natural increase" up. But it was the loss from movers, many of whom left for economic reasons, which drove the state's population downward.

"When opportunities present themselves, people will move," said Rick Waclawek, director of the Michigan Department of Labor and Growth's Bureau of Labor Market Information and Strategic Initiatives.

I've commented that Rust Belt states often suffer from natural decline, something overlooked in the brain drain hysteria. So, the natural increase is a surprise. What continues to irk me is the droning about out-migration while citing net migration statistics. I'm not inclined to trust the quoted experts.

Interesting tidbit about Pennsylvania's population:

Sue Copella, director of the Pennsylvania State Data Center, said the state gets more of its growth from international migration than most states. The Census Bureau defines "international migration" as U.S. citizens and foreign nationals moving into or out of the 50 states and the District of Columbia.

For 2008, international migration accounted for about 40 percent of the state's growth. The only states with a higher percentage were Connecticut, Florida, Massachusetts, New Jersey, New York and Rhode Island. The District of Columbia ranked higher than Pennsylvania.

I'd bet almost all of the immigration occurs in the eastern part of the state. Score another one for immigration glossing over weak domestic in-migration. On the other hand, Texas is gaining population mostly from domestic migration:

Much of Texas' international migration historically hails from Mexico and Central America, where immigrants fled poor conditions. But the surging domestic migration into the Lone Star State is now likely to come from economically depressed states such as Michigan, which lost about 46,000 residents between July 2007 and July 1, 2008. ...

... As domestic migration has increased, international movement into Texas has slowed, dropping from nearly 104,000 in July 2006, to about 90,000 the following year. The Mexican government recently reported a 42 percent drop in the number of people trying to enter the United States illegally in the past two years.

U.S. government officials attribute the decline to stronger border enforcement, while immigrant advocates say it mostly reflects the slowing U.S. economy.

Eschbach cautioned that Texas' role as a magnet for job seekers could diminish as the state's economic troubles begin catching up to the nation's.

University of Houston economist Barton Smith said last month that Houston, Texas' most populous city, was losing its "energy cushion" and moving toward an economy that resembled the rest of the country. He predicted that Houston would lose between 11,000 and 37,500 jobs in 2009.

That's the other big story: Flagging international migration to the United States. I suspect the teetering economy has more to do with the falling numbers in states such as Texas than border enforcement. Actually, I'm sure of it. The best border control is economic decline.

Back to domestic migration, are most of the newcomers really from "economically depressed states such as Michigan"?

Blog Release: Steelers Cheer

From VisitPittsburgh:

It’s time to rally around our Pittsburgh Steelers as they head to the playoffs in January 2009 and VisitPittsburgh wants to see and hear your best Steelers cheer! We want the funniest, wackiest and most creative Steelers cheers our fans have in them. Send a video of you and your favorite fans performing your Steelers fight song to steelerscontest@visitpittsburgh.com. Contestants will be judged in five categories: wardrobe, performance, content, musicality, and originality. The winner will receive a Steelers Jersey and an Official Wilson Super Bowl XL Game Football.

Send video, along with name, email, and phone number to steelerscontest@visitpittsburgh.com. All submissions must be entered by midnight Thursday, January 8. While videos can be tacky and wild, they must be tasteful and legal! VisitPittsburgh will select a winner at on Friday, January 9, 4 p.m., EST. Employees and immediate families of VisitPittsburgh and the Pittsburgh Steelers are not eligible to win.

No studio videography will be considered. Contestants warrant that the video submission is original and that they are the sole owner and creator of the piece. Entries may not have been copyrighted or published previously in any media including books, magazines, newspapers, postcards, web sites, calendars or advertising/marketing materials. While contestant retains copyright and ownership of his/her original work, it is understood that all submissions become the property of VisitPittsburgh which has the legal right to use, publish, reproduce, alter and give legal consent to others to use the photograph.