Brain Drain Report: Wisconsin

The battle over brain drain is heating up in Wisconsin. Severe state budget constraints put the issue into focus. Some leaders want to pursue the talent dividend. Others wonder how Wisconsin can afford to pursue this goal:

Wisconsin has done a good job up until now. It already beats national averages by graduating 65 percent of students within six years. Reilly would like to increase the percentage of Wisconsin adults with degrees from 34 percent to 50 percent.

That touches on the concept of "brain drain," wherein young people from Wisconsin communities go to college, get a degree then move to where the jobs are -- and it's not Wisconsin. Some communities in Wisconsin, including Wisconsin Rapids, market their work forces as skilled, educated and ready to work. Many of these employees lost jobs due to plant closings and downsizing. With roots already in the community, it's more difficult for them to pick up and leave in search of a job.

Boiling it down, why pay more in taxes to help someone graduate who will leave the state? Investing for a talent dividend exacerbates outmigration. I'm sure Chicago appreciates the subsidy.

The debate gets more bizarre. Politicians are floating the idea of a student loan tax credit:

“During my career as a college professor, I’ve seen many bright students from around the country, and even from around the world, who have come to Wisconsin to get a first rate education,” Rep. Kim Hixson, D-Whitewater, said at the hearing. “However, according to several studies, Wisconsin is losing many of these qualified graduates to other states.”

Hixson said he believes the bill can help keep students in Wisconsin and combat the so-called “brain drain” — from 1989-2007, Wisconsin has ranked among the 10 worst states in net migration of people holding a bachelor’s degree.

By keeping more graduates in the state, Hixson added, Wisconsin will increase its highly trained workforce, which can also spur economic growth. The tax credit would also help to make higher education more affordable for students.

Great idea, except:

Paul Gabriel, executive director of the Wisconsin Technical Colleges District Boards Association, said the organization is supportive of any bill that would help make college more affordable for students. Students from technical colleges typically tend to stay in Wisconsin, however, so the ”brain drain” is not as much of an issue for them.

I see. Wisconsin would be offering financial assistance to graduates who tend stay instate. During a budget crisis.

Wisconsin's workforce development strategy is completely incoherent. The state could forgo the costs of improving college graduation rates in order to afford the student loan tax credit. The lunatics are running the asylum.

Small City Attraction

A guest editorial at Rust Wire ponders the fate of third-tier (and further down the urban hierarchy) cities. The author clarifies the concern in the comments section:

Should a city like Cleveland, Buffalo, or St. Louis actively recruit young talented people from smaller cities nearby? Or just make due with whoever is there or whoever wanders in and likes what they find? When rustbelt cities had their growth spurts in the past, a large part of their new population was coming off the farms and out of small towns. There was a lot of natural increase (4-8 kids/family) so they weren’t necessarily depleting the countryside.

Since Erie is one of the cities discussed, I'll use it as an example. For shrinking cities, skimming off the cream from urban areas lower on the food chain makes sense. The Erie Diaspora in Pittsburgh is proof of concept. Expatriates from my hometown sure have put a big stamp on Pittsburgh's social media scene. To some extent, I'm part of it. I'd rather see my fellow natives move to another part of the Rust Belt as opposed to Charlotte (where most of my kin relocated). However, the destination matters little to Erie. Brain drain is brain drain.

Believe it or not, people do move to Erie. Truth is, we don't know much about the talent churn within the Rust Belt. We know all about the exodus to the Sun Belt. We know all about friends and family leaving our birthplace. I haven't studied Erie demographics, but I can tell you that many newcomers in Youngstown hail from Pittsburgh. There's no rule against smaller cities targeting outmigrants from bigger cities. For a good example, see this story about Iowa. Big cities push out more people. Big, successful cities push out even more people.

Some thoughts on the matter from Ryan Avent:

Say that you have one kind of skilled worker who likes to live near other skilled workers for the mundane benefits of agglomeration: access to suppliers and clients and the advantages of a deep labour market. For this worker, any large, skilled market is an attractive place to be. Then there is another kind of skilled worker who enjoys those benefits of agglomeration but also the externality-oriented benefits: things like knowledge spillovers in specialised industries or Jacobs externalities, in which urban diversity breeds serendipitous opportunities. The first category of worker is happy to be in any collection of skilled workers. The second, on the other hand, needs to be among other externality-dependent skilled workers.

It's open season on the first kind of skilled worker. At least, that may be the case. Whatever the reality, we would do well to understand the market. What kind of talent can Erie reasonably expect to attract?

The author of the Rust Wire editorial misses this part of the migration equation. Of course, so does Cleveland, Buffalo and St. Louis. Every place, shrinking or growing, has a talent retention initiative. Few have anything like a talent attraction initiative, particularly in the Rust Belt. Let's face it, there isn't the job creation to justify either approach.

Why would I run through a brick wall to live in Erie?

Baton Burgh

Baton Rouge is coming to Pittsburgh:

The chamber is lining up a trip to Pittsburgh. The mayor and a canvassing group will travel to Pittsburgh in September to look around the city. It was recently ranked by The Economist as America's most livable city.

The group has made two previous trips to Austin and Portland.

Austin, Portland and Pittsburgh. Pittsburgh?

Why St. Louis Can't Compete

Kudos to the St. Louis Post-Dispatch for helping to set an agenda for the region's revitalization. A recent editorial in the newspaper attempts to suggest a few ways forward:

• Time. It’s going to take a while. In 2009, when Pittsburgh hosted the G-20 Summit of Industrialized Nations, the world suddenly noticed that the one-time Steel City had done a remarkable job of making over itself. But Pittsburgh had been working at it for more than 30 years, ever since the American steel industry was overtaken by foreign steel. ...

• Invest in people, not just projects. What about tax breaks for bright college graduates who agree to stay home? ...

• St. Louis, even as it tries to keep its best and brightest, must cultivate the loyalty of those who have left. You can see them on television wearing Cardinals hats at away games; an “alumni club” could spread the word — not only is this a good place to be from; but it also is a good place to be.

There is a laundry list of considerations and I cherry-picked three to make a point. I don't think the author of the piece has a good understanding of what other communities have done and therefore gives bad advice to the readership. The Pittsburgh reference might be rewritten to state that the world took 30 years to notice the city's make over.

More troubling is the policy suggestion for talent retention. Tax breaks? Again? Sigh ...

St. Louis needs to be more aware of what is going on in other regions, other states. Neighboring Iowa is a good guide, having tried just about everything under the sun to deal with brain drain. Also, Joel Kotkin provided an assessment of the St. Louis talent landscape that the leadership should revisit. There are more than a few demographic surprises in the report.

Unfortunately, St. Louis is preparing to go the road more traveled and the excellent newspaper series will be in vain. That's exactly what happened in Cleveland. I expect business as usual in St. Louis.

Rust Belt Podunk

Everywhere else is nowhere, Loserville. To employ a bit of phenomenology, home is sacred. Beyond the pale is profane. Outsiders are uncivil, cannibals. We spend a lot of energy trying to dispel these stereotypes. But they are stubborn because they are useful.

Getting to know one place is hard enough. That's the genius of regions (or nationalism). The abstraction allows us to relate to a place that otherwise would fall under terra incognita. Thus, we can all understand the following joke from The Onion:

INDIANAPOLIS—Members of the Indianapolis-based Butler University basketball team, which defeated top-seeded Syracuse on its way to the school's first-ever Final Four, wondered aloud Wednesday what more they had to accomplish to finally get the hell out of Indiana. "We've won 24 games in a row now, a longer streak than anyone else, and in recognition we get to travel where? To New York? To Los Angeles? No. Across town," Butler star Gordon Hayward said during a press conference. "How am I supposed to motivate and inspire my teammates? We've excelled at the game, and our reward is to be trapped in this armpit? My only consolation is that the three visiting teams get to see how lousy some schools have it." Hayward, an Indiana native, ended the press conference early and left without comment when told an Indiana Pacers scout would be attending the Bulldogs' game against Michigan State.

Devoid of context, the satire isn't funny. For folks intimate with Indianapolis, the words sting. The city gets a bum rap. The point being that most of us laugh because we share (roughly) the same geographic stereotype.

That matters because it affects migration. With this in mind, I want to discourage Richard Longworth:

If the Midwest is to act as a region, it must know what it is. It must define itself. It needs a unifying portrait, a communal myth. To paint this portrait, we look to our writers, especially our novelists.

I argue that the Midwest needs more detail. For example, consider pizza:

The pizzas have a thin crust, which some customers liken to a New York-style pizza. However, Blough, who grew up just outside of Pittsburgh, said her pizzas naturally remind her of the ones she had in her childhood. Each order takes about 15 minutes to make and bake, including the time to stretch the dough onto the pan.

Although she acknowledges that pizza places are a dime a dozen, Blough said her homemade dough, sauces, and soups, generous salads, a special blend of cheeses and jumbo-sized pepperoni rolls set her apart from the competition. She uses the same amount of dough in her 12-inch pizza to make a single stromboli, calzone or pepperoni roll.

I'm not here to insist that there is such a thing as Pittsburgh-style pizza. Instead, I'd note the pride in what is perceived to be a local tradition. A few years ago, I had no idea what made a pizza from St. Louis or Youngstown distinct. Like most people (despite being from Erie, a city with its own delicious spin on pizza), I delineate between Chicago and New York style. Now, I'm developing into a Rust Belt connoisseur.

I appreciate Longworth's perspective. Fighting over a shrinking economic pie is no way to turn things around. However, people need to see the geographic variance within the Midwest. To paint with such a broad brush threatens to reinforce the stereotypes crippling the region.

Regional thinking is an artifact of the British Empire and the genius of late 19th-century geographers (e.g. Mackinder). I internalized it as the Berkeley School. It's a powerful way to carve up the world ready-made for statecraft. The knowledge serves an industrial economy. A school kid can quickly ascertain the value of a place in the production chain.

Ironically, Richard Florida reproduces the same contradiction. Florida speaks of economies of agglomeration yet noodles with ideas about megaregions. The latter misses the point of a knowledge economy. The concept of region is vestigial. Geography still matters, but not in the classic sense of the discourse.

Globalization is not eroding the power of states so much as it is deconstructing nationalism. Nation is being decoupled from state. The local comes to the fore, again (early 19th-century thinking). Tribal identities are more important (i.e. hyperlocal). What is Mahoning Valley literature?

Burgh Energy Report: Uncertainty

Another drag on the Marcellus Play is the novelty of unconventional natural gas. The boom in Oklahoma City doesn't map neatly onto Pittsburgh. Forecasting is hard enough, but the fact remains that no one knows for sure what the rush will bring. Via the Houston Chronicle energy blog, the DOE is revising its production projections:

The EIA has been overtaken by advances in technology, oil-shale finds and changes in the industry and has been less able to account for smaller companies that increase or decrease production. Some commodities analysts and gas producers, such as EOG Resources Inc., have long suspected that the EIA has overstated domestic natural-gas output--a factor they argue has helped push prices to seven-year lows in 2009.

The news could bode well for the energy industry in SW Pennsylvania. It also underscores the shaky terrain for investment. That said, billions of dollars in bets are already on the table. On the other hand, even the biggest commitments aren't guarantees.

I still think it is a good idea to seek training for energy jobs. The labor market is filled with its own uncertainties. The main concern I'm seeing is talent supply:

Even without an energy bill out of Washington, a green economy is emerging in California. And once demand gets rolling, green growth could power the state's economic recovery. At that point, it won't be technology or political will or even money that is holding back the green boom. As paradoxical as it sounds with unemployment in double digits, the green economy is facing a talent shortage.

Where to find the talent? Green conjures images of youth, but a study released this week by MetLife Foundation and Civic Ventures finds that the skills of Baby Boomers looking for encore careers are a good fit with the need for weatherization crew leaders, solar contractors and trainers, energy auditors and other roles that expand job opportunities for people of all ages. Make no mistake: Green jobs, like all jobs, are still in short supply. California has 159,000 green jobs, according to a study last year by Next 10 and Collaborative Economics, and green employment grew 5 percent between 2007 and 2008, even as total jobs fell.

But real job growth won't kick in without stronger consumer demand. Contractors can't afford to hire new workers without actual orders. Without a clear understanding of the benefits, home and business owners have been reluctant to invest. Training has been hampered by the lack of clear standards.

Sorting out the energy economy picture is tough right now. There is time to retool the regional workforce and prepare for the boom. Companies will go where the talent is located and training doesn't happen overnight.

Marcellus Shale Bust

I'm fascinated with the Marcellus Play and how it might impact inmigration to the SW Pennsylvania backwater (as well as the rest of Northern Appalachia). I've had visions of Pittsburgh as the next Calgary, but I'm busy reining in that enthusiasm. Via the energy blog at the Houston Chronicle, the gas rush is no big deal:

"The studies used to support the claim that drilling will bring economic benefits to New York are either biased, dated, seriously flawed, or simply not applicable to the region that would be affected," said Barth, who holds master's and doctoral degrees in economics from the University of Maryland.

Christian Harris, an analyst with the New York State Department of Labor, said Marcellus jobs could buttress a weak economy, but added that it's hard to estimate the impact.

Depending on your source, you can find a different story. Most of the news indicates a big deal. The main issue is the unknown. The legal terrain is uncertain, as is the pending climate change legislation currently in limbo.

Another issue is infrastructure. The gas needs to go where it can be used. Right now, that isn't happening. Those jobs, the ones dealing with delivery, might be the real game-changer. The drilling itself can limp along on itinerant labor. All the associated industry, including policy analysis and workforce development, should benefit from the unconventional gas rush.

A good example is the V&M Star expansion in Youngstown. Driving this is the steel pipe used to release the shale gas for harvest. These are, forgive the pun, pipeline jobs. Right now, the Marcellus Shale is mostly hype. Tomorrow, I expect the bulls to run.

Homewood Nation

My Homewood is no more. I followed this blog in the Pittsburgh Post-Gazette because of the many references to the diaspora. Usually, that voice came from the dedicated readership. Blogger Elwin Green obviously appreciates this expanded sense of neighborhood:

The end of "My Homewood" is the beginning of "Homewood15208," a blog that will appear tomorrow as part of a new website, Homewood Nation.

When "My Homewood" began, some of the first responses came from people who used to live in Homewood, but who now live somewhere else. Some of the best responses came from people who haven’t lived in Homewood at all, but who care about Homewood. I learned to think of Homewood not as merely a physical place, or as a neighborhood, but as a far-flung nation of people who care about that neighborhood. Homewood Nation is in Atlanta, and in Seattle, and in Baltimore. It is in Iraq and in Korea. Homewood Nation is not my Homewood, it is ours.

And now, online, Homewood Nation is here. Please visit; enrich us with your presence.

Green articulates what I think is the new geography of journalism. The community is both hyperlocal and global. The boundaries are unclear. Places in Atlanta are closer to Homewood than many residences within the City of Pittsburgh.

To me, the migration from the Post-Gazette to a stand-alone website makes perfect sense. Like our schools, newspapers are from another time and economy. Almost all of us are connected to some place where we don't pay taxes. What media covers that beat?

The geography of community has changed, but journalists are still trying to catch up.

Migration Tales

The morning survey of news items yielded a find that inspired me to revisit all the recent articles I've collected about migration. Albeit pre-Great Recession, deconstructing the rush to Atlanta:

This week the Atlanta Regional Commission released one of its periodic Regional Snapshots -- the topic was "Domestic Migration: Who's Moving In and Where Are They Coming From?" The snapshot looked at the 20-county greater metro area that includes Coweta County from 2000 through 2007. The source of the report was IRS tax records. That makes the report somewhat skewed because everyone does not file a tax return, but the report is a good indicator of where people are coming and going.

The first revelation is that most moves are local. In fact, 52.1 percent of the people on the move in metro Atlanta moved from one of the 20 counties within the region. Slightly more than 37 percent of those moving to the region came from a different state. And 7.5 percent moved from another county in Georgia outside the 20-county region. Other migration made up slightly more than 3 percent of the incoming population.

The phrase I emphasized is one of the ironies of migration. The apple doesn't fall too far from the tree. That's just as true for the Rust Belt as it is for the Sun Belt. Yet the rule continues to be a "revelation". More interesting (to me) is the out-of-state inmigration compared to that coming from the rest of Georgia. The interstate migration pattern is another story, but the data are net migration and hide more than they reveal.

Concerning the more recent numbers, I have three remarkable stories. First, the battle between Rochester and Buffalo:

During the past decade, the Census Bureau estimates, the gap between New York’s second-and third-largest cities has narrowed to about 88,000 people. The Buffalo Niagara region, which encompasses both Erie and Niagara counties, ranks as the 50th largest in the nation at about 1.2 million people, while the Rochester region, which covers five counties, ranks 51st at 1.03 million.

My read on this is that Rochester is emerging as the city of gravity in this part of New York. What I mean is that I'd bet on Rochester to be the best performer in the region over the next decade. Again, the Rust Belt is shaking out in different directions. More on Upstate here.

Perhaps the most profound shift in the United States is occurring in California:

After decades on the rise, California's foreign-born population has peaked and in some large areas -- including Los Angeles County -- has even slightly declined, with that trend expected to continue, according to a new report.

This peaking of the foreign-born population has occurred earlier than previously forecast because of sharp declines in new immigrant arrivals, largely attributed to stepped-up border enforcement and the downturn in the economy, according to the report by USC demographer Dowell Myers. In the report's figures, California has a population of roughly 34 million.

"In the last decade, homegrown residents have surpassed migrants and immigrants to become a majority of the California population for the first time since before the Gold Rush," Myers said in his report.

That's staggering. Pittsburgh is reversing a trend that has lasted about 50 or 60 years. The above has stood for more than a century (and change), practically antebellum California. I keep running across optimistic stories that the migration will return to normal once the economy recovers. I'm not so sure.

Lastly, the changing face of Iowa:

A steady influx of black people to Iowa, many from Chicago, Milwaukee and other urban areas, has created tension in some Iowa communities.

White, blue-collar Charles City in northern Iowa, with about 7,500 residents, experienced some social friction about five years ago when 25 families moved from Chicago to take advantage of more readily available public housing. Within about two years, 44 black children from Chicago enrolled in Charles City's public schools.

Some residents complained of spikes in crime at the time, but police denied it. Mayor James Erb said recently there is still some grumbling related to residents in public housing, but people are generally getting along.

Blacks and Latinos represent a demographic boon for Iowa. But this inmigration gets swept under the rug in "Hollowing Out the Middle". I found the book to be shocking in the way the authors point the finger at residents sowing the seeds for leaving home. I'm perplexed as to why many of the most progressive thinkers about shrinking communities seem to eschew talent attraction. I'm troubled by the romantic notions of local culture. Regardless, the tension is a good indicator that the demographic tale for Iowa is pointing in the right direction.

Diaspora Economics: Sports

When real Pittsburghers refer to the diaspora of football fans, they say "Steeler Nation". Since I'm one of those bandwagon folks who have no real connection to the city, I say "Steelers Nation". Typically, I explore what that phenomenon means for Pittsburgh and other Rust Belt cities. But there is another side to the story at the other end of the migration:

Hawks guard Jamal Crawford makes the case that support for visiting teams is due to the significant number of transplants in Atlanta. Crawford was on the other end of that equation when he played for the Knicks, who were supported by relocated New Yorkers in several cities.

Will it motivate the Hawks if the Lakers get too many cheers in their arena?

“We will have our fans in there, too,” Crawford said. “It will be like one of those boxing matches where the same place is kind of divided. I am sure it will be a lot of fun.”

Atlanta has a reputation as a lousy sports town. The fan culture is largely an import from other cities, usually in the Rust Belt. But the business model for franchises there is local. Boomtowns are just as guilty for outdated frameworks as shrinking cities.

Atlanta is a great sports towns. Many athletes from teams all over the country live there in the off-season. It is America's domestic diaspora center, built up by people from elsewhere. Instead of lamenting the lack of homefield advantage, the region should embrace it. No sense trying to convince the natives to come out to the ball game. Most of them have left.

Brain Drain Report: US Senator Sherrod Brown

I read all the stories about US Senator Sherrod Brown touring Ohio and talking to his constituents about brain drain. He solicited ideas and best-practices. The result:

“One of the real missions I have in the Senate over the next ten years is to turn around this brain drain of some of our youngest, brightest people going to Chicago putting down roots down there,” Brown said. “I understand people want to leave, but there’s so much here. There’s going to be increasing economic opportunity here and except for the weather, there’s no reason to go.”

He could have made that statement before he did any fact-finding. It doesn't advance the discussion. If anything, it sets the discourse back a few decades.

That's the wrong direction for Ohio. Brown should be talking about attraction. Why would I want to move to your state?

Please pass this report along to Max.

St. Louis Diaspora

The last of Tim Logan's three-part series about the regional workforce challenges facing St. Louis is published today. There's a good bit about talent retention. I'm not a fan of the suggested policy, so I'll refrain from commenting. My contribution to the story shows up in the diaspora discussion:

All over the country, in hip, high-priced cities such as San Francisco, Chicago and New York, thousands and thousands of 20- and 30-something ex-St. Louisans are, living, working and building careers. Call them our diaspora.

And they are a huge resource.

Because they know St. Louis. These people know how we pronounce Gravois. They've eaten toasted ravioli. To them, St. Louis isn't just another piece of "flyover country," indistinct from Indianapolis or Milwaukee. It's home. And if more of them could be lured back for good, they could give a big shot of new blood to our work force.

I recommended to Tim that he investigate what is going on in Louisville (KY). Louisville is a best-practice example and is similar enough to St. Louis to be an instructive example. Tim pressed me for metrics measuring success, but I'm not aware of any. What qualifies as a successful talent boomerang campaign?

Brain circulation is a relatively new concept in the arena of international economic development. Concerning domestic migration, you could say that I'm one of the pioneers exploring the potential of diaspora geography. This is a policy frontier at any scale.

Part of the problem is that most workforce development programs are retarded, stuck in the industrial era. Hence the local orientation that dominates Logan's narrative. Retention gets top billing and that is a mistake.

International economic development has moved boldly beyond designing better brain drain plugs, finally recognizing a futile exercise. At the vanguard of this paradigm shift is China, with its policy of intentional talent exports. On the whole, brain drain has been very good for China. I suspect the same could be said for India.

Domestically, I think we are on the cusp of a major paradigm shift in workforce development. Educational attainment is a mainstream concept and migration data are ever finer. But I'll end with a comment from Aaron Renn which serves as a postscript for a recent post about urban talent policy:

BTW: I continue to be astonished at how many cities completely don't get it on talent. They talk a good game but are completely unserious.

St. Louis And Pittsburgh

First note, I'm sticking with the series about competitive St. Louis for today and tomorrow. Second note is that anyone concerned about shrinking cities should watch the two online videos about the turnaround in Pittsburgh. Also via Chris Briem, astounding changes in Tioga County:

Edward Trask, a retired nonprofit executive who grew up near Mansfield, is arranging $18 million in financing for a restaurant, a motel, and permanent housing for gas workers on his family's 160-acre farm.

Tioga County is experiencing its first population increase in a century, he said.

"There are so many opportunities to make money from this," said Trask, who lives near Harrisburg. "This is such a shock to the system."

For sure, plenty of strange-but-true migration tales out there right now.

Related to the two videos and yesterday's post, St. Louis as desirable destination:

Right now, St. Louis is not on the list.

You know, the list of cities where things happen. Those magnets for smart, creative people, where talent, innovation and capital generate new ideas, new companies, new industries. Places such as Seattle; Raleigh, N.C.; Austin, Texas; and Boston. Places where the new economy is being built.

"We're not really on the radar in terms of hip and happening places," said Jeff Vines, an area entrepreneur.

Before I remark on that passage, a comment on the first article in the series:

When I told friends I was moving to STL for school, every single person wrinkled their nose and asked why. I have never received a compliment on my decision to move here.

I can assure you that my passion for Pittsburgh generates a similar reaction. What Rust Belt cities are on the radar in terms of hip and happening places? I'd offer up Minneapolis as a city that has morphed during my twentysomething years, around the same time Grunge Seattle got big (as well as Slacker Austin).

My guess is that Pittsburgh is going to emerge from this recession like both Seattle and Minneapolis did in the early 1990s. Keep in mind that the economic landscape now will look a lot different from dotcom boom. I'm not expecting another talent migration rush. That would seem to suit Good Enough Pittsburgh.

As for St. Louis, time to lay the groundwork for the next economic reset. I hope locals will take the Post-Dispatch series to heart, in a constructive fashion. Also, I have no idea what might be already in the pipeline for this region. I'm not aware of any St. Louis buzz, but I'm not looking for it either.

Mesofact Migration St. Louis

Chris Briem has more today about Pittsburgh's new migration paradigm. I have a few of my own thoughts on the recent spate of Census data, perhaps tomorrow. More pressing, the St. Louis Post-Dispatch launched a series on that region's economic competitiveness. Tim Logan kicks it all off with a look at workforce issues. Tim interviewed me via e-mail concerning initiatives designed to bring native talent back to their hometown. I don't know if any of my comments will make the cut, but I tried to point him in the direction of existing programs that might serve as a model for St. Louis. As for Logan's current piece, this passage stands out:

As president of the Regional Chamber and Growth Association, Fleming spent a year just before the recession trying to woo a major employer to open a data center. Fleming wouldn't name the firm, but said it was "a Fortune 50" company that wanted to hire 1,500 people at good wages. Forty cities wanted the facility, and the company narrowed it down to two finalists — St. Louis and Raleigh, N.C.

The firm's consultants recommended St. Louis, Fleming said. But the company was worried about the region's slow growth, concerned that it couldn't get the workers here it would need over the years to come.

"Perception became reality," Fleming said. "And we lost the deal."

Could the company attract the necessary talent to St. Louis? Perception of place influences hard economic choices. Stereotypes matter, particularly to the most geographically mobile. Hence, NCR relocates from Dayton to Atlanta. Pitching a job to someone who hasn't been to either city is much easier if you are in Georgia as opposed to Ohio.

In terms of workforce development, I see the region's mesofacts as the greatest challenge. St. Louis might be much improved (I'd certainly welcome living there), but the rebranding efforts will be slow to take effect. It might be too late to take advantage of the latest reconfiguration of domestic migration patterns.

Pittsburghese Economy

Late last night, my wife and I were discussing the cultural anthropology of business. Economic globalization makes obvious the problems of lost in translation. But what about the differences within a country? The Economist with a German case study:

German dialects, formed by geography and political and religious fragmentation, express deep-seated cultural differences. These persist even though borders between petty princedoms are invisible (and often no longer audible). Even small differences count. Swabians share Baden-Württemberg with Badeners. Both spoke Alemannic dialects. But Swabians, who say Haus (house), have a bias against living in the neighbouring old grand duchy, where they say Huus.

That trade is livelier among regions that share a language is well known. The paper’s authors think they are the first to find a similar effect within a single language in one country. They measure migration not trade, because the data are better and cultural factors matter more. The best predictors are still Wenker’s [maps]. “Even when we don’t speak dialect, the cultural territory is still there,” says Alfred Lameli, one of the authors.

Does this confuse cause and effect? Regions may have similar dialects because earlier generations migrated and their descendants follow suit. To rule this out, the authors looked at the way communist East Germany weakened social links that encourage migration. After unification, they found, the old migration patterns came back, suggesting that migrants respond to cultural factors more than to social ties. It seems that neither television, nor the autobahn, nor even the Kaiser, has created a single country in Germany.

I like how migration is used as a surrogate for trade. It's very clever and illuminating in terms of the significance of path dependency. Concerning economic development, I think we tend to grossly underestimate the disparate cultural geography of the United States. Creating the better rational choice rarely has the intended effect.

That brings me to regional branding initiatives and a post at Reimagine Rural. Mike Knutson is exploring the power of storytelling and how it might help revitalize rural parts of the United States. A good storyteller understands her/his audience. Unless you figure out a way to deeply connect with the listener, viewer or reader; then you won't make an impact. It is hard to beat face-to-face interaction in terms of feedback and crafting your narrative given the new information.

A cheat (or "hack") is to exploit cultural common ground. Anyone adept at con(fidence) games can explain how it is done. Want to attract the Creative Class to your town or city? Then you must first understand placelessness:

But for the more vulnerable, the stakes are higher. Mexican laborers are encouraged to work in the United States but chased away by armed vigilantes. In India, northern migrants to coastal, cosmopolitan Mumbai are beaten by armed cadres of a sons-of-the-soil political movement. In China, untold millions of rural dwellers have been drawn to the city to make the roads and buildings to fuel the country’s boom. But, under the reigning hukou system of residency permits, they find themselves without the rights of locals in the big city, without guaranteed access to education and medical care, vulnerable at any time to being sent back to the village.

Officialdom struggles to process people without a place. Census forms don’t understand them. Commercial television and cinema create few characters in their image. Tax collectors insist that they choose one of their many countries as the real one. Politicians represent particular places, not ideas or industries or genders, and so if you are a Somalian-born American working in Paris for Nissan, you live in a democracy but without meaningful representation, with no public servants driven to take up your battles.

But the problem is not just external. The placeless often also suffer a gnawing tension within, a love-hate relationship with roots.

How well can Rural America enfranchise the placeless? That question gnawed at me while I read "Hollowing Out the Middle". In that book the placeless are characterized as a threat to the cultural integrity of these communities. As someone who is very sensitive to xenophobic narratives, I didn't see any space for outsiders in the policy recommendations. I'm not against local empowerment, but I don't see how rural towns can survive with such a perspective.

This is a handicap throughout the Rust Belt. I see it in my hometown of Erie. There is little to no interest in appealing to non-natives. This reinforces the negative feedback loop that Ed Morrison draws:

"Place develops a bad reputation" is the key mesofact here. How does your community overcome that stereotype? You must be an excellent con man, not a great storyteller.

Why Pissburgh Sucks

Aaron Renn has two new offerings about the better half of the two Rust Belts. He has some nice words for Pittsburgh while also noting the strong performance of Indianapolis. Of course, the good news is welcome. But that's not really the issue. Perception is what matters:

Most observers do not associate the Midwest with urban success, but quite the opposite in fact. But while there are plenty of places that are legitimately suffering, there are also plenty of success stories out there that don't always get the mindshare or press they deserve.

Bottom line, the success is ironic. Indianoplace? Surely you jest. Jest on. Know thyself.

Aaron serves up plenty of cold hard facts telling the other story about the Midwest. Despite his best efforts, the megaregional brand prevails. The depressed backwaters of globalization are boring. Not to mention, the weather is lousy. (One of these days, I'm going to tell my Randy Pausch story)

I've yet to drop the bombshell. This will be Data Point #2 in my attempt to triangulate the talent migration narrative for the Rust Belt:

“If we’re going to have our headquarters here, we want to support organisations that make Houston a better place to live,” Plank says. It is that attitude that has made talent intent on staying in Houston.

Mike Linn, executive chairman of Linn Energy, knows that first-hand. He decided in 2006 to move his Pennsylvania-based oil and gas company to Houston. “I couldn’t attract engineers and geologists to move to Pittsburgh. If you want to attract the most talented people to grow a company, Houston is the place to be,” he says.

His staff like running into others from the industry at soccer games, or while shopping or walking to meetings in Houston’s underground tunnel system. “It spurs conversations and deals,” he adds.

Linn, clearly at home in an expensive suit as he walks past paintings, sculptures and other treasures at the Museum of Fine Arts, felt welcome here. Despite being a newcomer, his involvement in the energy sector meant he was invited to serve on various boards that serve the local community, such as that of the museum – something, he said, that in places such as New York or Boston is reserved for sixth-generation residents.

In that extended passage from the Financial Times exists Pittsburgh's inherited misfortune and its shortcomings. Regarding the shortcomings, serendipity is not a strong suit of the city. This is a result of the legacy costs, the subtle snipe at the good old boys networks of Boston and NYC.

The inherited misfortune is that non-Rust Belt talent won't move there. This is the Ann Arbor crisis. The shadow of Detroit destroys all inmigration (but not immigration).

All of the above is why Pittsburgh won't follow Calgary. Calgary is Canada's Houston, just later to the game. What's Canada's Pittsburgh? Please don't say Sudbury.

Net Inmigration Pittsburgh

Update: In a subsequent repost, turns out that Pittsburgh did have net domestic inmigration in 1990-91. Let's just call it a 100-year flood for now.

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I've been tracking all the US Census stories populating the Google news feed today. A business rag out of Buffalo provides a drop down menu for the 2000-2009 data. Net domestic outmigration is common for US cities. Pittsburgh is in good company. However, Pittsburgh is an outlier concerning natural decline. Not many cities have more people dying than being born. The bottom line is that Pittsburgh is shrinking.

I was wondering when Chris Briem would chime in with the Pittsburgh tale of the tape. Earlier than I expected:

There was one year around 1990-1991 when there was a net migration into the region overall... but overall migration includes international immigration which by construct is almost always a net positive for the region. But in terms of gaining more people than losing from elsewhere within the nation, you really have to go back much of a century to find a period when that has been true.

Almost 100 years of outmigration has come to an end, at least for now. Add to that the good news about Morgantown:

“Migration has always been the primary driver of population growth in these counties,” said Dr. Christiadi, a demographer at West Virginia University’s Bureau of Business and Economic Research. “Migration into Berkeley and Jefferson counties has slowed considerably due to the recession occurring in the Washington, D.C., Maryland, and Virginia economies. On the other hand, migration into Monongalia County remained strong in 2009. Albeit slowing, the county still saw a solid job growth of around 1.5 percent in 2009, and at the same time student enrollment into West Virginia University remained strong. These two reasons are why Monongalia County drew more migrants, allowing it to outpace population growth in Berkeley and Jefferson counties.”

For those of you not familiar with the economic geography of SW Pennsylvania, Morgantown orbits Pittsburgh. There is a contiguous stretch of vitality from Cranberry (home to Westinghouse's nuclear complex) all the way to West Virginia's booming college town. Not only that, the worm has turned at a most curious time. We spent all of 2009 in recession. Not your typical Rust Belt tale.

Richard Longworth, from a post today at The Urbanophile, provides some context:

Most of these big cities, having been built on rivers or lakes, lie at the edge of states: think Chicago, St. Louis, Cleveland, Cincinnati, Detroit, Milwaukee. But state capitals, sited in days of poor roads and hard travel, usually lie in the center of states. Some state capitals – Columbus, Indianapolis, Des Moines – were never industrial centers but thrive now. But non-capitals, by and large, are suffering. No surprise: the capitals and non-capitals are where they are for totally different reasons – one political, the other economic – and never really had much to do with each other.

The state capitals aren't really Rust Belt cities. They never were. If you compare Pittsburgh to its like economic urban centers, then it really stands out as a strong performer and a unique redevelopment story. One can't overstate the tradition of outmigration. And don't forget the legacy of the early 80s exodus, which informs today's remarkable natural decline. Other cities tend to offset net domestic outmigration with relatively robust birth rates and immigration.

Think about a growing Pittsburgh population thanks to domestic inmigration. In my mind, that would complete the economic transformation started some 50-years ago. Pittsburgh has a new set of mesofacts.

Cleveland Brain Drain

A few days ago, a fellow blogger sent to me a few links concerning the brain drain issue in Cleveland. The Cleveland Commitment is a project designed to get regional talent to return after seeing the world. I like the concept.

I have two tales in support of the Cleveland Commitment. First, a different take on the "forced" out-migration going on in Ireland:

An Australian, Mark Ballantine, who runs the Belavista restaurant next door, is the son of Sligo emigrants. He came back to visit family, fell in love with Strandhill and never left.

"The general consensus among everyone is doom and gloom at the moment," he said.

"A lot of young people ask me about Australia and the state of the economy there.

"The older guys who are going over have worked in the building trade but there is absolutely nothing happening here for them. The kids are different. They are going for the adventure."

The economic push factor is very real, but graduates might leave even if there were a few more job opportunities. To reinforce the point, consider some brain drain from the UAE:

“I often ask myself what I’m doing in China when I go back home and am reminded of the bountiful comforts of the UAE,” Amina says. “But the scale of the opportunity here is huge – everything is bigger, faster and crazier. Abu Dhabi has changed a lot, but I feel like my own life there would be predictable.”

The sisters say there’s a generational difference between the adventurous and entrepreneurial spirit that drew their parents to the UAE in search of a better life, and a more laid-back approach among their UAE-born peers, who are enjoying the fruits of their parents’ success. That’s exactly the course they wanted to escape.

The sisters, who studied at McGill University in Montreal, Canada, say all of their UAE high-school classmates took university courses abroad, with about 90 per cent returning to the UAE after graduation. The rest moved back to the countries that their parents had left a generation earlier, such as Lebanon, Jordan or Egypt, which now afford greater opportunity than in the past.

There are jobs at home, but young talent leaves anyway. I suppose someone might point out that life in the UAE is boring and that spicing up the downtown offerings might keep graduates from exploring the world. I think the article makes clear just how ridiculous the cool city concept is. The transient journey is about getting out of one's comfort zone, not finding a place more hip.

Yet this perspective persists, even at the highest levels of leadership. Back to Cleveland:

The [Beachwood High School] students decided to focus on reversing the “brain drain” for their project after interviewing [Chris Ronayne, president of University Circle Inc.,] and other key Cleveland leaders, such as Toby Cosgrove, president and CEO of Cleveland Clinic; Charles Ratner, president and CEO of Forest City Enterprises; and Mayor Frank Jackson.

“We asked them about their views on Cleveland and what could be improved,” Stern said. “The major idea that came across was that we have this problem of ‘brain drain.’ ”

Crosby said what stood out in her mind from the interviews was that “Cleveland’s biggest problem was among Clevelanders and their view of (the city), not necessarily an outside view.”

And so the cycle continues ... The people at the helm of the region's economy perpetuate the brain drain myth and prescribe an attitude change so graduates won't leave. The solution to the fabricated problem isn't even novel. It has all been tried before. Which is why the Cleveland Commitment is so refreshing. A better understanding of the baseline is always welcome.

Economic Redevelopment Geography

Today, I want to dig a little deeper into the "Two Rust Belts". An article about the divergent fates of Madison and Milwaukee in Wisconsin sums up the disparity nicely:

“With the presence of the State Capitol, the UW and other government entities, relatively speaking Madison is weathering the recession better than many other regions,” says Tim Cooley, the city’s economic development director.

Indeed, the 20 cities surviving the best read like a list of college and government towns: Austin, Texas; Jackson, Miss.; Syracuse, N.Y.; and Baton Rouge, La., among others.

Compare that to Milwaukee, which Brookings lumps in with the decimated economies of Cleveland, Detroit and Youngstown, Ohio.

Government and gowns make for a winning combination, suggesting that policy has little to do with economic outcomes. I'm reminded of the tale about Boulder and Pueblo in Colorado. One city would get a prison and the other a state university. Both wanted the prison. Pueblo landed the deal and the rest is history. Unwittingly, Boulder got the better end of the bargain.

That's something to keep in mind as both Milwaukee and Detroit look to Pittsburgh as a model of redevelopment. The Steel City is now a college town. That's likely bad news for Detroit. Michigan already has two strong innovation engines in Lansing and Ann Arbor, which is where the investment should go. As for Milwaukee, I could see that place becoming a great student hub.

Lastly, I'll reiterate the competition geography. From the Greater Ohio Policy Center:

The next economy is not about competition between Cleveland and Cincinnati, or even with Indianapolis and Pittsburgh, but about Ohio positioning itself to compete with Shanghai and Mumbai. We lay out several arguments for why we have the potential to compete and what needs to be done to fulfill Ohio's promise.

If Cleveland tries to compete against Pittsburgh, then it will lose. Sorry, Drew Carey. The winning part of the Rust Belt already has a global orientation. The universities and centers of government attract talent from everywhere. However, that parochial mindset is hard to shake. Carin Rockland of Team NEO is indicative of the defeatist attitude that holds sway in Cleveland. Stealing business from Rust Belt neighbors is a tragedy of the commons.

Burgh Energy Report: Labor Mobility

Returning to Chris Briem's post about the curious case of Pittsburgh's peak labor force, I'm going to try my hand at analyzing the energy talent migration for Western PA. First and foremost, there aren't enough skilled workers in the industry. Second, energy employees tend to be highly geographically mobile. Most are ready to follow the economic booms wherever they may be. And having an official residence far from your place of work is not uncommon.

Concerning the Marcellus Play, local investment in workforce development is a huge risk. Not only is the legal geography uncertain, but the local geology poses some challenges:

In other "wet" gas formations like the Eagle Ford in Southwest Texas there's both existing gas processing capacity and existing connections to the U.S. Gulf Coast refining infrastructure, notes Nathan Ticatch, vice chairman of PetroLogistics. That gets the liquids, like ethane, to chemical plants that can use it to make products.

The Marcellus is both without the processing capacity and far away from any plants that can crack ethane and other liquids, notes Bruce Bilger, the head of global energy for Lazard. There's a pipeline project being considered to move such liquids to the Mid-Atlantic states where there may be a use for them, but it's "just on the drawing board."

The other options, says Ticatch, is a 1,500 mile pipeline to the Gulf refining complex. There's enough potential ethane production that would accompany Marcellus gas production to justify a project, but how long would it take for that production to become big enough for a pipeline to move forward?

Another option: construction of a power plant the runs on ethane as a fuel. That would be a hard sell in the middle of Pennsylvania coal country, however, particularly since the plant would need to run around the clock, Ticatch said.

That's a big missing piece to talent migration puzzle. The workforce needs are unclear, as are the logistics of efficiently getting the gas to market. I haven't even scratched the surface of the demand issues.

The cloudy picture sends us to Coudersport:

A study this month from the state's Center for Workforce Information & Analysis estimated Marcellus Shale jobs could grow 55 percent from 2006 to 2016 to more than 12,400 positions statewide. Marcellus jobs in north-central Pennsylvania could rise by 62 percent to 2,700.

Those are dramatic figures in a region where unemployment often hovers above the state average of 8.8 percent. The area has especially been hit hard in recent years by cuts in manufacturing and businesses related to the automobile industry.

Unemployment in Potter County, where Coudersport is located, was 10.8 percent in January, according to seasonally adjusted figures from the state. Among neighboring counties, the unemployment rate was 10.7 percent in McKean, 8.8 percent in Tioga and 9.9 percent in Lycoming.

Cameron County, the state's smallest county by population, has the worst unemployment — 16.9 percent of its civilian labor force of 2,300 is out of work.

Gas companies drilling wells bring in many experienced workers from out-of-state to staff Pennsylvania rigs. The influx has brought challenges to small towns once reserved for bigger communities, like rising rents and a lack of affordable housing.

Helene Nawrocki, the executive director of the Potter County Education Council who helped organize the Natural Gas Expo in Coudersport, would rather more of those jobs go to in-state residents.

What in-state applicants may be lacking, though, are the proper skills. Area high schools, colleges and technical schools have started discussing how to offer training.

A lot could change between now and 2016. Will the boom last long enough to allow for the development of a permanent workforce? Until the dust settles, I don't think unconventional gas will have much of an impact on Western Pennsylvania. In the near term, better to stick with that mobile workforce ready to go where the action is.