Saturday, June 30, 2007

Generation Y Pittsburgh

The ever-growing talent crunch is causing different enterprises to canvass American tech schools in search of people to hire. The targets are the Millennials, the generation born from 1982 to 2002. However, those born after 1990, the last year of the Baby Boomer echo, belong to a shrinking cohort and a much tighter supply of talented labor. The list of target schools is small and the interest in mobile foreign labor grows yearly:

To fill math-intensive jobs, banks are bringing in more non-U.S. employees—people like [Qiushuang Zhang (Before earning her master’s degree in computer science at Georgia Institute of Technology in May, Zhang had two job offers from Goldman Sachs Group Inc., two from Microsoft Corp. and one from Google Inc.)] who came to the United States to study. They typically started out in countries such as China or India, which have been more focused on math and science education. One dividend is the knowledge of cultures where firms such as Goldman aim to expand.

‘‘We know that we are hot property,’’ says Rishi Dhingra, a master’s degree candidate in quantitative and computational finance at Georgia Tech.

Banks are adding engineering schools to the roster of business campuses where they recruit. During the past two years, Citigroup Inc. has started visiting Carnegie Mellon University in Pittsburgh; Massachusetts Institute of Technology in Cambridge, Mass.; and Georgia Tech in Atlanta.

‘‘We tell them, ‘You could be the person to create software that’s used on a trading floor tomorrow,’ ’’ says Caitlin McLaughlin, Citigroup’s global head of graduate recruitment. At a tech company, she says, developing a new product can take months or years.

Of concern to Pittsburgh, more and more companies from around the world will come to CMU to pilfer the best and brightest, particularly those with intimate knowledge of emerging markets. The pressure to leave Pittsburgh will only increase. Any attempt to resist the inevitable out-migration will fail and is a waste of regional resources.

The good news is that CMU is producing some of the world's most desirable talent. Pittsburgh will continue to be a great place to get an education. Thanks to the University of Pittsburgh and CMU, to name the big two, the region has a prominent place on the global stage. The next step is to align the policy accordingly. I'm still waiting to see an indication that at least a few local kingmakers understand the current migration trend and how to leverage it to Pittsburgh's advantage.

Friday, June 29, 2007

Diaspora Blues

A Pittsburgh expatriate residing in Florida misses home:

I’m sitting here in Naples listening to WDVE — a radio station from Pittsburgh where I’m from — and it hit me: What a difference in broadcasting!

I think this is one of the reasons we all long to move back to where we’re from and why a lot of us don’t feel the “hometown” feeling here.

I mean the lack of a connection with the places where we grew up, where families get together once a week and towns where there’s plenty to do, from arts festivals to regattas, museum openings and Major League Baseball — not to mention Steelers game tailgating!

The point of Barb Bekich's letter to the Naples Daily News is that the local flavor of Naples is lacking, at least on the radio. I can see the Florida natives rolling their eyes. They are tired of Pittsburghers telling them about what is lacking and how the Burgh Diaspora misses its city.

I know that the Pittsburgh Post-Gazette panders to its displaced readership, but what about streaming radio such as WDVE? I listen to WYEP quite often via the internet. I wonder about such things thanks to Ms. Bekich's comment concerning the hometown feel of WDVE. Maybe that's part of the Burgh mystique, but it also does a great job of scratching the itch of all the Pittsburghers who left town.

Perhaps if there was a large and strong Naples Diaspora, the radio stations there in Florida would provide more local flavor.

Wednesday, June 27, 2007

The Pittsburgh I Desire

Lest anyone misunderstand my previous post as a plan to drain Pittsburgh of all its talent, I continue to promote local success stories and highlight the creative energy feeding the vitality of the city. Something to Be Desired (STBD) understands the value of local connections and global support:

Expatriate Pittsburghers Seek Us Out.

Actually, they don't know they're seeking us specifically. But Pittsburgh is the kind of town that its expatriates eventually realize they're proud to be from -- the history, the tradition, the Steelers -- and they start looking for news and reminders of their hometown online.

Then they find us.

Second only to the "cool in Pittsburgh" comment above is the amount of feedback we get from people who thank us for giving them a visual reminder of the city they (sometimes only now) realize they love and miss. If shots of Primanti Brothers, Mount Washington and legions of pigeons help soothe the homesick heart of a Texas or Washington transplant, so much the better.

One can be a Burgh booster while servicing the needs of expatriates. As a shared cultural artifact (like the Pittsburgh Steelers), STBD's "webcom" helps to keep the Diaspora connected to the region. STBD also appeals to the right audience, other creative types and innovators who could be part of an impressive network that promotes economic development in Pittsburgh. Along the way, non-Pittsburghers may find out just how cool the Burgh really is.

Not only do I think that Pittsburgh doesn't do enough to celebrate its successful alumni who have left the region, many seem to overlook all the wonderful things going on in their own backyard. There are too many cynics and too many people overly sensitive to anything negative uttered about their hometown. The icon of this unhealthy anxiety is Border Guard Bob. Pittsburgh should be confident enough to help people relocate to wherever they might find the most success. In doing so, Pittsburgh will become an important destination for those who harbor great career ambitions and are looking for a place that will provide some advantage.

City Revitalization Evangelist?

I've been following with some interest former Pittsburgh Mayor Tom Murphy's visit to Des Moines, Iowa to help promote a proposed sales tax increase there. I haven't heard much good about Murphy's tenure as mayor, but I don't know enough to comment one way or the other. Regardless, the citizens of Des Moines are skeptical of using the world "success" and "Pittsburgh" in the same sentence. Murphy champions the initiative, blaming the State of Pennsylvania for Pittsburgh's infamous problems:

But a sales tax increase and expanded recreational trails system did little to prevent Pittsburgh’s slide to the brink of bankruptcy, which caused hundreds of employees to be laid off while Murphy was at the helm.

The city’s downtown did not flourish as promised after the sales tax went into effect, said Bill Urbanic, budget director for the Pittsburgh City Council. He said Murphy’s strategy caused “a fiasco with our downtown retail section” and gave tax money to for retail projects that later closed.

Murphy, who now advocates for “smart growth” for the Urban Land Institute, said Pittsburgh’s money problems, which included the city’s need to ask the state for a $40 million line of credit to pay its bills, had nothing to do with the sales tax and were instead a result of the state’s tax system.

Whether or not Murphy is more Pittsburgh savior than villain, I question the wisdom of using him to sway the voters and politicians in Des Moines. But I also wonder if what needs fixing in Pittsburgh has been and still is beyond the reach of public policy. There's a lot of finger pointing going on and not enough immigrants to blame for regional shortcomings.

If Murphy was the villain, how did he land so softly at the Urban Land Institute and then get called to Des Moines? How is Murphy an expert in Smart Growth initiatives? Is Pittsburgh a model to be emulated or avoided? My intuition tells me that things aren't as bad in Pittsburgh as some would have you believe.

Caught Between Two Places

I'm a bit paranoid that I've already linked to this article, but a brief blog search didn't yield anything and I doubt anyone will notice if I am repeating myself. The storyteller is a member of the Burgh Diaspora in Houston and captures the ambivalence that many expatriates feel about leaving Pittsburgh:

Pittsburgh has it good. It's got a small-town feel combined with the best parts of city life: old man pubs alongside trendy bars, neighborhood grocery stores beside organic shops, and gossipy old women shoulder-to-shoulder with homeless people. Best of all, the rivers haven't even caught fire in at least 30 years! The one thing Pittsburgh lacks, though, is a sustainable economy, and like all my childhood friends who didn't want to work in the fast-food industry, I had to move out. Sure, Houston's my adopted city, but I still get pangs of homesickness anytime the black-and-gold Steelers come on TV.

Pittsburgh has similar mixed emotions about its Diaspora, taking pride in the power of Steelers Nation while quietly disparaging those who left when the chips were down. I'm certain that there are a large number of ex-Pittsburghers who wish they could lift up the city and relocate it to a region with more economic vitality (and perhaps a better climate). But I also know many who still love Pittsburgh, but would never return.

No matter what the sentiment, the Diaspora desires a relationship with Pittsburgh. I'm not sure how Pittsburgh views this homesickness, save the interest I've often heard that I might help bring people back (or keep them from leaving in the first place). I've endeavored to be clear that I want to facilitate greater mobility. I've positioned myself at the disposal of the Burgh Diaspora. What I hope to do is give those people with a Pittsburgh affiliation the best of two worlds, aiding Pittsburgh's cause in the process.

Tuesday, June 26, 2007

Argonauts of Globalization

Via the blog at Foreign Policy, I learned about a migration of workers from India to Poland:

As of now, there are only around 3,000 Indians employed across various sectors in Poland but this number is expected to get significant boost once the [memorandum of understanding] is signed. The Polish minister has taken the initiative to promote recruitment of Indian workers in her country.

Stating that her country is facing an acute labour shortage, [Poland's Minister for Labour and Social Policy Anna Kalata] said, "We have noticed severe discrepancies in our labour market. Around 800,000 Polish workers have left to work in other countries in the EU (European Union)."

To partially borrow AnnaLee Saxenian's term, Indians are the Argonauts of Globalization. I reference "globalization" instead of the "knowledge economy" because labor from India has long done much more than ply the trades of the information and knowledge age:

Indian construction workers have a history of proven flexibility, with thousands heading to the Middle East in the late 1970s and 1980s to service a construction boom. But demand for them has slackened since countries there started giving preference to workers from within the region, such as Yemen.

In the northern Indian state of Uttar Pradesh, 31-year-old master mason Mekulal Kachwaha, whose family have worked in construction for at least three generations, welcomed the news of the new opportunity. Although he had never heard of Poland, he would gladly go to work there. He would be the first member of his family to achieve the Indian worker's dream: a job abroad.

"Only one worker in our village has so far made it abroad - to Saudi Arabia," Mr. Kachwaha said. "He's doing very well, and comes back regularly to see his family."

India may be the world champion of labor mobility (in every sense of the term). As the Polish Diaspora helps to build Western Europe, Indian workers are making sure that Poland's economy continues to grow at a face pace. Migration is the lifeblood of globalization. Move or perish.

Shrinking Cities Network

How do former industrial cities successfully transition to the knowledge economy? As a geographer would tell you, what works in one place doesn't necessarily travel all that well:

[Max] Grinnell, a 31-year-old Madison native who is getting his Ph.D. in geography, spent four months at the University of Sheffield in England in 2004 as part of a [Worldwide Universities Network] program to do research on regional development issues in Great Britain. He continues to have contact with professors and students at Sheffield.

“I was looking at the roles of the University of Sheffield and other institutions and policy groups involved in the transformation of regional economies. I was looking at the region saying ‘What can be done?’ It's like restructuring in the States, how to make Pittsburgh into a Silicon Valley,” Grinnell said.

You take older industrial regions and say what is next besides having people on welfare? How do we use existing institutions and look at new partnerships?

He found that not every region can become a high-tech information center, and that too few people in the Sheffield area had the higher education needed for such a transformation.

Ideas about using higher education institutions to transform a region are disseminated at international conferences and urban development forums, but that ignores local knowledge and practices, Grinnell said. You can't do boilerplate plans that work thousands of miles away.

I'm more interested in common attributes of shrinking cities and figuring out to what extent Pittsburgh could learn from other cities that share a similar industrial past. I don't think you can turn Pittsburgh into Silicon Valley because there isn't the rural blank slate in any city. Developing Pittsburgh is particularly difficult in that regard. I'm curious to know if Mr. Grinnell has encountered a case of an old industrial city transforming into something like a Silicon Valley.

Regardless, Mr. Grinnell's research (along with that of the University of Sheffield and Worldwide Universities Network) should prove useful to the shrinking cities club. I would like to find out if other cities have diaspora populations like Pittsburgh does. My hypothesis is that there is no better city diaspora to network than the one associated with Pittsburgh and that the Burgh Diaspora project would not fare as well in another location.

Monday, June 25, 2007

Leadership Burgh

Mike Madison succinctly covers how Carl Kurlander's article in yesterday's Post-Gazette resonates with the Manifesto for a New Pittsburgh. I would add only one observation about what I think is Mr. Kurlander's call for leadership:

As [Lions Gate producer John Dellaverson] went to numerous meetings and saw and heard about the many resources in this region -- the universities, WQED, the Carnegie Mellon Entertainment Technology Center, Pittsburgh Filmmakers, Civic Light Opera, etc. -- he repeated what other expatriates who visited have said: There is great potential here -- but someone has got to sew all this up. Someone has to get everything to work together to transform these nonprofit resources into a lucrative business.

The emphasis is Mr. Kurlander's and conveys, at least to me, a void in Pittsburgh's economic development landscape. The necessary vision is there, but who will marshal all these forces and regional assets towards that end?

Dan Rooney could be the Pied Piper if you think that Steelers Nation is the way to build New Pittsburgh. Perhaps Mr. Kurlander is trying to step into this role, but I see him as a leader of the arts and entertainment community. He's part of the puzzle, but we need someone who can "sew" up all the initiatives across the entire economy. Then again, Mr. Kurlander's efforts might make the perfect pilot project to get things going.

Pittsburgh, Ireland

The Pittsburgh Steelers could do much more for the city. Dan Rooney (yep, that Dan Rooney) co-founded in 1976 The Ireland Funds, a "worldwide network of people of Irish ancestry and friends of Ireland dedicated to raising funds to support programs of peace and reconciliation, arts and culture, education and community development throughout the island of Ireland."

The Funds held their annual international conference this past weekend. Interest in donating to Ireland is up among the Irish Diaspora, boosting the already substantial coffers of The Ireland Funds to about $300 million. That's a lot of scratch for a country with a booming economy thanks to many years of European Union investment and subsidies.

I applaud Rooney's dedication to his ancestral homeland, but I think he could spearhead a similar initiative for Pittsburgh, calling on Steelers Nation to support regional programs and development. Now would be a good time to found The Pittsburgh Funds and enlist the efforts of the Burgh Diaspora.

Saturday, June 23, 2007

Migrants' Creed

The New York Times kicked off a series today on global migration. The initial article is rich with points of departure, touching on many of the themes I explore in this blog. What I want to stress are the benefits of relocation:

“This is life and death,” said Emmanuel Kofi Cathline, a local peddler who migrated from Ghana 17 years ago and once made money here helping migrants book the illegal journeys. Though crackdowns have chased him from the business, he remains loyal to what might be called the global migrants’ creed. “If a place is no good, change it,” he said. “Go to another place!”

I'm not suggesting that leaving a region is a panacea for the shrinking cities around the world. The NYT article discusses the ups and downs of straddling two places for purposes of economic gain. However, we should have no doubt about how mobility promotes individual opportunity. The ambivalence is about how places and communities stand to gain from pro-migration policies.

The lack of liberty to choose one's location helps to inform Nativism and xenophobia. I suspect that more than a few Pittsburghers view the Burgh Diaspora as "ingrote" (see the NYT article for definition of term). I'm not arguing for the eradication of a local advantage, but I do think a few points should be awarded to those migrants who can demonstrate a Pittsburgh legacy.

McKeesport Diaspora

Yesterday's Diaspora Report in the Pittsburgh Post-Gazette set me to thinking about the geographic scale of heritage-based relationships. The Pittsburgh Club restricts membership to people "who lived in Pennsylvania within a 30-mile radius of downtown Pittsburgh or is married to, coupled with, or residing with a Village resident who meets the aforementioned requirement." I'd love to know how the club came to that particular geographic restriction.

What about smaller scale diaspora identities? My wife is a Pittsburgh native and when she meets another member of the Nation, the conversation almost always turns to the part of the Burgh where she grew up and what high school she attended. She's from the North Hills and if the fellow Diasporan is also from that area, the game is on, "We went to the same elementary school!"

To emphasize my point, I offer another tale of Florida-based Pittsburgh connectivity, but at the smaller scale of McKeesport:

They talk about roller skating at Olympia Park, about eating Klondike bars, about the sawdust floors at Balsamo's grocery store, about the smells of Stalling Bakery, about dancing at the Palisades and shopping at G.C. Murphy Co.

They drink coffee and eat dessert and laugh about old times.

They talk about how strange it is that they all walked the same hallways 1, 000 miles away, and how they ended up here, standing shoulder-to-shoulder in the same living room for a photograph.

Eating Klondike bars isn't specific to McKeesport, but the other common experiences reveal a tighter geography of trust. I think the Balkanized political landscape of Pittsburgh is something that the Burgh Diaspora all share. There is a collective Pittsburgh pride that covers the region, but the shared sense of home is something (somewhere) much more esoteric.

Just how unique is Pittsburgh's parochial mindset?

Friday, June 22, 2007

Steelers Nation Never Sleeps

Some of you may not be familiar with the Steelers Nation online community. There are hundreds of fansites and fan clubs that make a virtual connection. With the Pittsburgh Club post making the rounds today in the Post-Gazette, I thought I'd take my five minutes of fame and share the site that inspired the Burgh Diaspora blog.

The bulk of the discussion at takes place in the Heinz Field forum, where Steelers talk reigns supreme. The banter can get unruly. Think of a barroom debate about sports, which captures the tenor of the exchanges you'll often find online. My favorite forum on the site is The Swap Meet, which really heats up once game tickets go on sale. This is where a bunch of us crazy fans got together and planned a tailgating party at the game in San Diego against the Chargers.

I'm most proud of the professional beat reporters who provide us with the news and insight that feed our appetite for everything Steelers. Jim Wexell writes regularly for the Uniontown Herald-Standard, along with contributing to a number of professional sports publications such as the Steelers Digest. I think he should be best known for two excellent books about the Pittsburgh Steelers: Tales From Behind the Steel Curtain and Pittsburgh Steelers: Men of Steel. I can honestly say that both are great reads with stories that would surprise even the most rabid Steelers fan. Dale Lolley writes for the Washington Observer-Reporter. He hasn't written any books that I know about, but he does have a blog. I don't know how Jim and Dale tolerate all our questions about Steelers minutiae, such as the backgrounds of undrafted rookie free agents who won't survive the training camp cuts.

But the backbone of the community is comprised of posters who volunteer their time to moderate the message boards, answer questions, and keep the site running. I began to wonder what the Burgh Diaspora could do for Pittsburgh while I witnessed all the hard work one Steelers fan would do for another with just a "thank you" serving as payment. The altruism between fans demonstrates the power of connectivity and the strong pull of Pittsburgh.

Thursday, June 21, 2007

Flat World Venture Capital

Krishnan Ganesh is a successful Indian entrepreneur. His current charge is TutorVista, a 24-7 tutoring service aimed at the market in the developing world. The Economist reports that funding a venture such as TutorVista in India is much easier now than 10 or 15 years ago:

Whatever he does next, starting a new firm will be a lot easier than it was back in 1990. Financing is more widely available: TutorVista's backers include the Indian arm of Sequoia Capital, a stalwart of Silicon Valley. Employees are more willing to consider joining start-up firms. Regulation is lighter, too. The paperwork required to set up TutorVista was completed in two weeks. But the improved business climate also has drawbacks—rivals are better funded and there is more competition for talented people.

That's a big blue ocean for Silicon Valley venture capital to cross, but the Indian Diaspora network is up to the task. Exporting that close proximity trust over long distances opens up the opportunity landscape, allowing venture capitalists to explore the new markets required for sustainable growth.

Also, TutorVista is another example of personal outsourcing, part of the trend that (and apparently Mave) is riding. Again, from The Economist:

A new report from Evalueserve, a research firm, estimates that annual revenues from “person-to-person offshoring” by individuals and small businesses will top $2 billion by 2015, up from some $250m now. In addition to [tutoring], other services that are suited to this model include tax planning, interior design and administrative support. Mr Ganesh says that TutorVista will not be his last venture in this area.

That's impressive growth, and an indication of how well positioned Pittsburgh's Guru and Mave are. Mave is new to me. If it is new to you as well, check out their blog. Freelancing is a form of entrepreneurship and both Guru and Mave can help Pittsburghers in that regard. Of course, I'm sure they wouldn't mind lending a hand to the Burgh Diaspora while they are at it.


We already know about the Pittsburgh-Hollywood connection, but Pittsburgh-Bollywood? Indian doctor-turned-filmmaker (and Pittsburgh resident), Ravi Godse is set to release a DVD, Dr. Ravi & Mr. Hyde on July 17th:

Like many men his age, Dr. Ravi finds himself halfway through his life having not yet achieved the greatness he anticipated. Sure, he could buy a sports car or find a hot, young babe to help him through his midlife crisis, but Dr. Ravi yearns for more. His search for divine fulfillment takes him from the halls of a hospital to what he believes is his true calling - directing and producing a true "timeless classic" motion picture.

On his journey, he must cope with unscrupulous agents, reluctant colleagues, an unenthusiastic wife and even the Mafia. From the streets of Pittsburgh to the sun-swept shores of South Africa, Dr. Ravi's search takes him near and far eventually bringing him to the realization that it's not important what he does or how well he does it, as long as he just does something.

Can a busy doctor moonlight as a filmmaker or is his comical adventure just a midlife crisis in the making?

I haven't seen the movie, but the plot looks like a good diaspora tale with ample labor mobility for the protagonist (not to mention the writer/director/filmmaker). Thanks to Jeremiah Huth of Pittsburgh-based Inecom Entertainment Company for the tip.

Wednesday, June 20, 2007

Pittsburgh, Alabama

Mobile, Alabama is celebrating the arrival of two new steel companies to the region. Is this industry good for the economy? The ever vigilant and skeptical local media asks the tough questions:

But where are we headed? Are we becoming another Birmingham or Pittsburgh, a steel town with mostly manufacturing jobs? What if you want to work in a nice cushy air-conditioned office instead of a steel plant? And what about jobs to attract and retain the much-touted "creative class?" Is Mobile’s economy diverse enough to offer the range of jobs needed to continue to grow and prosper in the 21st century?

Before the Pittsburgh proud inundate the author and the Lagniappe (a Mobile newspaper), know that a resident there already set them straight:

The writer asked if we are "becoming another Birmingham or Pittsburgh, a steel town with mostly manufacturing jobs?" She must not know much about either of those cities because if she had checked she would see that both Birmingham and Pittsburgh diversified their economies decades ago.

Speaking of Birmingham and Pittsburgh, both of those cities got a lot cleaner when the steel industry died down. Why haven’t you had any discussion of the possible environmental problems from bringing the steel industry down here? Is it because of the ad the steel plant bought in your paper? How else are you connected to that new plant?

The debate about the new steel mills aside, Pittsburgh is still hidden by the smoke and soot of yesteryear. Even Birmingham, in the same state as Mobile, is stuck in the past. How can former industrial powerhouses shake the negative historical images?

What these shrinking cities need are a few shining examples of economic diversification and a return to global prominence. Sure, the quality of life in Pittsburgh is much improved, but the city still isn't a success story; lacking the dramatic turnaround that will serve notice that the Burgh is indeed back. Until then, the default image of Pittsburgh is the one the city projected the last time it was a dominant player on the world stage.

Tuesday, June 19, 2007

Pittsburgh Commune: Creative TreeHouse

Another under-appreciated regional asset is the nascent coworking community in Pittsburgh. The creatively inclined are taking matters into their own hands, establishing a common workspace named Creative TreeHouse. Find out more about local independent talent collaboration at an open house on Saturday, June 30th starting at 6pm:

What: Open House featuring live painting, music, photography, poetry, podcasts, and a gallery show, free food and beverages provided

Where: Creative TreeHouse, 517 Lincoln Blvd., 2nd floor, Bellevue, PA 15202

When: Saturday, June 30th, starting at 6pm

Cost: FREE to attend, artwork for sale and donations accepted

More Info: Jesse Hambley, 724-910-9947,,

Evening of Free Art to Celebrate Opening of New Artist Collective

Bellevue, PA, June 19th, 2007 — Creative TreeHouse, a new facility that’s both a community for Pittsburgh-area artists and a creative resource for local businesses, is hosting an open house on Saturday, June 30th to celebrate its official opening. The evening will commence at 6pm at 517 Lincoln Blvd., 2nd floor in Bellevue and will include live painting, music, photography, poetry, podcasts, and a gallery show of current TreeHouse members’ artwork, much of which will be available for purchase. The open house is completely FREE to attend and food and beverages will be provided.

A wide variety of art will be produced throughout the evening. Professional photographers John Bodnar, Jeff Zoet and Laura Petrilla will be shooting portraits and providing their subjects with e-mailed copies. Paintings and drawings will be created by Rich Rogowski and Jeremy Shank with art supplies donated by Pat Catan’s. Popular local podcast Geek Riot will be broadcasting live. Music will be provided by Buddy Nutt, Some Other Band, and DJ analog a-go-go. Information on various Pittsburgh groups with ties to members will also be offered, including Refresh Pittsburgh and the Pittsburgh Macromedia Flash Users Group, as well as web service provider Pagewaiter and web series “Something To Be Desired”. A gallery will feature samples of Creative TreeHouse members’ work including portfolios, photography, and other art work. The list of attending artists is subject to change and likely to grow, so watch for updates.

Mere minutes from downtown Pittsburgh and available for use 24 hours a day, Creative TreeHouse is a haven for creative professionals that features a photography studio, an educational center, a 7,500 square foot multi-purpose facility for public art displays and meetings, and a creative service center that will allow businesses to discover and contact member artists. In addition to continual access to work space, members will be able to organize events, host and attend workshops and classes, be included in group showings, and create a profile accessible to businesses and other members. According to owner Jesse Hambley, a 23 year-old independent photographer, designer and video editor, “It’s like myspace in a building”, fostering face-to-face networking and collaboration. Membership is available to artists from all disciplines. More information on membership, pricing, and a complete list of amenities can be found at or or by e-mailing

Creative TreeHouse will provide local businesses with a new resource for all of their creative needs, including (but certainly not limited to) web design, graphic design, video production and photography and will give artists a professional atmosphere in which to hold meetings. Businesses interested in taking advantage of the creative service center should e-mail for more information.

Recent events hosted by Creative TreeHouse include the 24-Hour Creative Marathon, NYC-style dance parties, Doughnuts and Art, and a Schools for Schools fundraiser for needy African schools. Upcoming events will continue to showcase local artists’ work in fashion, art, photography, and music. Go to or become their myspace friend at for updates.

Monday, June 18, 2007

Burgh Boosterism

Get ready for another round of Pittsburgh pride. Mercer Human Resource Consulting ranked 143 cities worldwide in terms of cost of living. A Canadian newspaper provides some of the North American breakdown:

New York, in 15th spot and the survey's baseline, remained the most expensive place to live in North America.

The least costly city in North America is Pittsburgh, while Paraguay's Asuncion is the cheapest city in the world for the fifth straight year.

With based in Pittsburgh, big city opportunities, and a relatively inexpensive cost of living; I have to wonder why the region isn't doing more to leverage this advantage and attract freelancers from all around the continent.

Sunday, June 17, 2007

Innovation Salons

A powerful convergence of beer, brains, and bytes is a Silicon Valley tradition dating back to the garage innovation days of the 1970s. This kind of informal collaboration continues today, attracting people from all over the United States and around the world:

Hackers hailing from as far as as Dublin, Ireland, plunk their laptops down at DevHouse when they're in town on vacations or business trips. Some of the regulars relocated here from places like Pittsburgh, Penn., and Lexington, Ky.

"I moved down here because of stuff like this," said Matt Rubens, a 25-year-old software engineer who worked at and then established a start-up in Seattle. He ditched that in April for Silicon Valley's scene.

DevHouse has been mimicked in Boston, Mass., Zurich, Switzerland; and Cologne, Germany. Each city hosted its first party in the past six months, but none has offered an encore.

Reproducing the foment of ideas at DevHouse is a difficult prospect. Besides, DevHouse already replicated itself in a virtual environment. In the virtual realm, the right people (critical mass of the like-minded) are more likely to find each other. How bloggers connect is a strong example of the many DevHouses in existence online.

A region is lucky to have one successful innovation salon, a location where disparate expertise can mingle and collaborate. Pittsblog is emerging as that "place." Case and point is the latest Manifesto musing, repurposing the Pittsburgh Post-Gazette. An idea is hatched. Then interest is gauged. Finally (hopefully), a game plan is tabled.

All along the way, skeptics weigh in and help to sharpen the innovation. Bloggers are at their best building on the work of each other. I think the blogosphere is a superior way to produce knowledge. What is lacking in the Pittsburgh case is a cause, a problem that Salon Pittsblog might solve. I've suggested taking on the demographic/migration riddle, but I'd love to read about other ideas.

Demographic Opportunity

The problems of Pittsburgh's aging population are well documented. Missing from this policy narrative are the demographic opportunities already evident:

For a variety of industries -- ranging from health care to maid services -- Pittsburgh is pretty much the perfect place to be, said John Tubridy, owner of FranNet, a consulting business that advises franchisers.

"According to some of the franchises I represent, the demographics here are almost twice as good as their normal market," he said. "Seniors generally have expendable income and they sort of change mentally. Seniors will lose their savings to get things that they want."

And as the U.S. population ages, senior buying power increasingly touches nearly every piece of the economy. Even on a relatively youth-oriented industry, such as athletic footwear, seniors spent nearly 13 percent more in the past year than they did two years ago, according to data from the NPD Group, a New York marketing research firm.

Even Pittsburgh seniors on fixed incomes are relatively good for businesses, said Mr. Tubridy, because the cost of living here is lower than many comparable markets.

Regional demographic bets are tough to place. If Pittsburgh oriented infrastructure towards seniors, then a shift towards a younger population could undermine that investment. As always, migration is the wild card. The rest of the United States is busy catching up with Geriatric Burgh and Western Pennsylvania might prove to be an attractive option for senior living.

While every other region is chasing the hipster set, Pittsburgh could feast on demographic leftovers (markets currently under-serviced). The Burgh Diaspora blog is about overlooked migration opportunities. Much is made of Pittsburgh's outmigration and brain drain. Little is made of the upside of such a large diaspora population.

As long as Pittsburgh remains obsessed with the negatives of demographics and migration, the regional economy will continue to limp along.

Friday, June 15, 2007

Lifestyle Choices and Brain Drain

I should create a blog just for brain drain discussion. I did a Google news search today for "brain drain" and there were enough hits for a year's worth of blog posts. Migration is an oft-used scapegoat for economic woes and the competition for talent is fierce. Ah, but brain drain can occur without a regional exodus of human capital:

Sylvia Ann Hewlett calls them "canaries in the coal mine." Women who drop out of the workforce in their 30s-to have kids or care for older relatives-struggle to find high-powered jobs again. Managers often view them as less committed than other workers, so many women settle for lower-paying positions. In Off-Ramps and On-Ramps: Keeping Talented Women on the Road to Success, Hewlett, an economist and founding president of the Center for Work-Life Policy, argues that women are just the most conspicuous casualties of a broken career model.

Both women and retirees represent vital creativity leaving the workforce while regions panic about young college graduates seeking greener pastures. Hewlett sounds the warning, "The war for talent is really heating up: Employers can't continue to sideline two thirds of the female talent pool."

Pittsburgh is good location for families and retirees. Enterprise might adjust the workplace to accommodate these specific worker needs. Westinghouse and other companies already go to great lengths to attract and retain young talent. Pittsburgh could have a strong comparative advantage when it comes to working moms, whereas the quest for 20-somethings is quite the uphill battle.

Thursday, June 14, 2007

Double Consciousness Pittsburgh

Pittsburgh City Paper covers one of the current exhibitions (June 23rd the last day of the show) at The Mattress Factory:

In Double Consciousness, each of Clark's eight chosen artists deals with the multivalent issues of identity, perception and their inevitable connection to international politics, while also exploring innovative media and aesthetics. These distinctly individual vantage points (and their articulate visual expression) can facilitate serious cultural debate and reflection. Meanwhile, by highlighting contemporary Indian art a decade after its first appearance in an American museum, The Mattress Factory offers a vital forum for the creative voices of the South Asian diaspora.

Playing this artistic theme off of a discussion about the location of authentic Pittsburgh taking place at AntiRust, where does the diaspora fit in? Is the Burgh Diaspora its own distinct culture? In some ways, the Diaspora helps to define the cultural authenticity of Pittsburgh.

An anthropologist would have a field day studying how the Steelers Nation remakes Pittsburgh 8 times a football season, in the parking lot of the opposition. At almost every tailgate, fans celebrate Pittsburgh culture with food and drink. The Burgh Diaspora share high school memories and why they left home.

For me, the essence of Pittsburgh is the reason why these migrants stay so strongly connected to home. I have some ideas as to why there is a Pittsburgh Nation while other cities couldn’t make such an outrageous claim. At this point, the Double Consciousness of the Burgh Diaspora is somewhat of a mystery. I imagine that the works on display at The Mattress Factory contain a few clues.

Wednesday, June 13, 2007

Brain Drain Reflux

Pennsylvania is number one in attracting out-of-state first year college students. The state is also first in net inflow of freshmen. According to a recent article in the Wall Street Journal, PA isn't benefiting from being a national undergraduate magnet. The author fails to deliver a coherent argument, touting the benefits of investing in higher education while pointing out Pennsylvania's lousy return:

The Pennsylvania Higher Education Assistance Agency has provided $45 million in scholarships and internship wages for those studying in the science and technology fields. The state also has set aside 19% of the $2.74 billion it received in tobacco-settlement payments for bioscience research, some of which is being disbursed to state colleges.

A big part of Pennsylvania's plan to solve the brain drain problem is to invest MORE into higher education. I'm dumbfounded. I don't begrudge the money going to research universities, but I fail to see how these initiatives, even the more enterprise-centric Keystone Innovation Zones, will stem the tide of outmigration. What the WSJ article indicates is that investment in higher education doesn't result in job creation.

I don't see a strong connection between investing in higher education and carving out a bigger piece of the knowledge economy, but I do notice an opportunity in playing a large role in educating America:

A higher concentration of degree holders may help boost a state's economic growth, according to Enrico Moretti, who teaches economics at the University of California, Berkeley. His research shows that a one- percentage-point increase in a city's share of college graduates can equate to a 0.5- to 0.6-percentage-point increase in productivity, which he calls "remarkably robust."

But employees with advanced degrees in the most productive states aren't necessarily educated there, he says. While states that invest in higher education retain more graduates than those who don't, they also are "financing the human capital in Los Angeles, San Francisco and New York," says Mr. Moretti.

Pennsylvania is doing a great job of producing human capital for other regions. College graduates should chase the best job they can find. As a first step towards benefiting from this migration pattern, PA schools should help students relocate (enhancing the competitive advantage for attracting students). Second, get rid of the instate discount and decrease the taxpayer's burden, but make entrance into state institutions easier for residents (incentive for parents to move to Pennsylvania). Third, provide grants and scholarships for PA-centric research (put that brainpower to work while it is instate). Fourth, promote regional assets that speak to a more mature stage in a career track or life stage (encouraging brain circulation). Fifth, build a virtual PA alumni collaboratory (where those PA-centric research projects live on) and connect the knowledge capital around the world that shares a Pennsylvania education (invest in long distance heritage-based relationships).

Tuesday, June 12, 2007

Big Fish, Small Pond Pittsburgh

The Post-Gazette is the bearer of good news. Venture capital from outside the region is seeking investment opportunities in Pittsburgh. While venture capital doesn't stray too far from home, that money must find new markets:

Tired of battling with other investors in the ultra-competitive hot tech arenas such as Boston, Silicon Valley and Austin, Texas, venture capitalists increasingly are looking to untapped places such as Pittsburgh to find the "next big thing," said Darren Wallis, a partner with the Philadelphia-area venture firm Osage Ventures. Since 2005, it has pumped more than $1 million into Robinson-based software firm, Landslide Technologies.

Pittsburgh has plenty of innovation capacity, but new ideas are underfunded. Fresh sources of local capital do not seem to be in the offing, providing fertile ground for the less risk averse to swoop in and reap the benefits. Venture capital can and does travel long distances, if the conditions are right.

Talent is a lot like venture capital, in that there is a proximity advantage. Someone tired of the "ultra-competitive" cool cities can make a big splash in "untapped places such as Pittsburgh." There is plenty of creative capacity that can't find expression in the usual urban hot spots. But Pittsburgh has done little to develop its frontier assets.

Religious Congregation Geography

I stumbled upon a curious item in today's Post-Gazette. Dr. Diana Butler Bass is trying to understand why some churches thrive while others continue to lose members. Churches are communities and can tell us something about why larger communities, say Pittsburgh, are struggling. Americans have a choice of community, which is something Dr. Bass sees playing out in the vitality of certain congregations:

Americans are looking for new ways to experience religious community. Thriving congregations have been able to change the way they do ministry to create those communities, she said. Those that keep offering conventional church programs from the 1950s wither and die.

Today's American's don't inherit faith, they choose it, [Dr. Bass] said. Her research suggests "that millions of people would choose mainline denominations if we gave them something worth choosing."

Obviously, Pittsburgh needs to create something worth choosing. What is worth choosing might surprise some people. Dr. Bass highlights the value of diversity for community vitality, "That included racial diversity, theological diversity, political diversity, and diversity of life experience."

Home, like a church, is a place where you can safely explore a meaningful life. A place where a person can find such expression is one worth choosing. Pittsburgh should be in the business of facilitating that journey to fulfillment, which is much more than gainful employment. What successful churches are doing is fostering an entrepreneurial spirit, empowering people to seek personal growth and satisfaction.

Sunday, June 10, 2007

Migration Manifesto

I read a fascinating article in this Sunday's New York Times Magazine about labor migration as a development strategy. Lant Pritchett wants to open up the borders of wealthy countries to workers from poor countries as means to address global poverty:

Pritchett, a development economist and practiced iconoclast, has just left the World Bank to teach at Harvard and to help Google plan its philanthropic efforts on global poverty. In a recent trip through Chaurmuni, he praised the goats as community-driven development at its best: a fast, flexible way of delivering tangible aid to the poor. “But Nepal isn’t going to goat its way out of poverty,” he said. Nor does he think that as a small, landlocked country Nepal can soon prosper through trade.

To those standard solutions, trade and aid, Pritchett would add a third: a big upset-the-applecart idea, equally offensive to the left and the right. He wants a giant guest-worker program that would put millions of the world’s poorest people to work in its richest economies. Never mind the goats; if you really want to help Gure Sarki, he says, let him cut your lawn. Pritchett’s nearly religious passion is reflected in the title of his migration manifesto: “Let Their People Come.” It was published last year to little acclaim — none at all, in fact — but that is Pritchett’s point. In a world in which rock stars fight for debt relief and students shun sweatshop apparel, he is vexed to find no placards raised for the cause of labor migration. If goods and money can travel, why can’t workers follow? What’s so special about borders?

I put my own Pittsburgh spin on Pritchett's manifesto in the post titled, "Let Your People Go." The perspective I share with Pritchett is that there are great economic benefits in liberalizing migration policy. Not only do I think that Pittsburgh should stop trying to keep talent in the region, but I propose helping that very talent to relocate. Pittsburgh already does this when a school district succeeds in educating its students.

The better the education, the better the geographic mobility, and the better the economic opportunity. Pritchett sees a similar decision value chain, but cuts right to geographic mobility as the crux of the problem (and solution) for the world's poor.

I had a similar epiphany during my graduate school days pondering how best to improve human rights. A big sticking point is national pride. One country's citizens do not appreciate being told what to do by another country's citizens. Hence, international standards must have local variations, which in turn can undermine a universal approach. I figured labor rights posed the best chance for a widely accepted standard given the global reach of economic globalization.

The most powerful labor right is a choice of where to work. If corporations had to compete for labor (like they do now for talent), working conditions and wages would improve. I understand Pittsburgh's political geography as geared towards thwarting the geographic mobility of labor and reducing the employment choices, thus the need for unions. You don't need to organize if you can pack up your things and find a better job someplace else.

To discourage geographic mobility is a violation of an individual's fundamental human rights. To limit a person's area of opportunity is akin to denying them an education. Parents are not doing their children any favors if they try to keep them close to home. A local or regional opportunity landscape will always pale in comparison to a global one.

Pritchett is indirectly saying that Nepal should promote the out-migration of its human capital. Should we help the place or the people? When we look at development in terms of education, the answer is obvious.

Saturday, June 09, 2007

Inter-regional Connectivity

I wanted to blog about an article in the New York Times concerning the management of a global labor market, but The Creativity Exchange beat me to it. No matter since I've beaten the labor mobility theme to death over the past week or so. Instead, I'll revisit frontier geographies, where Pittsburgh might find some innovation and less risk aversion. I'm curious about places situated between regions, in this case Frederick, MD and the return of a prodigal daughter.

Laura Kelley recently joined Robin Jones, a marketing firm in Frederick. There isn't anything remarkable about this story and I wouldn't have noticed save for the mention that Ms. Kelley is a Steelers fan since her parents are from Pittsburgh:

The privately held company does not disclose revenues or profits, [Robin Jones managing partner Ellie Whims] said. In addition to the Tech Council of Maryland, its approximately 25 clients include Engineering Systems Solutions Corp. and Greentree Homes in Frederick, Rodgers Consulting Inc. in Germantown and Conquest Technologies Inc. in Sykesville. The firm also has clients in Washington, D.C., Delaware, Virginia and Pennsylvania.

The firm is in Frederick, Whims said, for easy access to Baltimore, the District, Philadelphia, Pittsburgh, and other mid-Atlantic cities.

That should please Kelley, who said she is a ‘‘huge” Pittsburgh Steelers fan. Her parents, who still live in Frederick County, were originally from Pittsburgh. In her spare time, Kelley, who holds a degree in communications from McDaniel College in Westminster, also takes dance classes in Frederick.

I've posted before about how I fancy this area as a strategic location between Pittsburgh and its DC-based Diaspora. Frederick is mainly oriented towards Baltimore and Washington, DC, but is far enough west to tap the Pittsburgh market (and flirt with Steelers Country). Robin Jones appreciates this value, but I don't know how prevalent this perspective is.

Unfortunately for the Mon Valley, Pittsburgh's frontier is north of the city. I finally figured this out when Westinghouse announced its decision to build a new campus in Cranberry for its expanding nuclear power plant production. Most innovation corridors are in the suburbs, not downtown. I don't think the pull of DC is sufficient to draw the talent south of the city to the many development opportunities in the Mon Valley. However, the boomtown that is Cranberry is not situated to take advantage of inter-regional exchange. Unless, you count Cleveland as a distinct region with unique comparative economic advantages that might compliment what's lacking in the Burgh.

Friday, June 08, 2007

Europe's Gloomy Demography

When I blog about "labor mobility", I am likely confusing some readers and undermining whatever credibility I might enjoy. Labor can be highly mobile without relocating. Through education and retraining, people can expand job opportunity. Generically, labor mobility measures the ability of workers to move between different sectors of the economy in order to take advantage of the strong demand for certain skills. Sometimes, you must relocate in order to seize an emerging opportunity in the labor market. I'm interested in labor's ability to maximize location opportunity, which is part of the overall labor mobility story.

With that confession out of the way, I want to discuss a Foreign Policy blog post about Europe's migration problem, which includes some unwillingness to relocate within a region or country and fill a pressing demand for labor. Europe is in the midst of the perfect demographic storm:

The continent has a massive shortage of skilled workers across a range of sectors. The Financial Times reports that Merkel's Germany is considering opening up its labor market to foreigners, primarily due to an "exodus" of qualified workers that includes academics, medical professionals, engineers and corporate staff. Coupled with demographic pressures, including a seriously below-replacement population rate, Germany—which has traditionally favored protecting its labor market—has little choice but to consider welcoming immigrants into its workforce.

At the same time, eastern European countries are also beginning to face a chronic labor shortage. Wages in some sectors have risen by as much as 50 percent in the past year, and emigration from eastern Europe to western Europe has exacerbated the shortage. Even though Poland, for instance, has a high unemployment rate of 13 percent, companies are still unable to find sufficiently skilled workers to recruit, and many people who remain in eastern Europe are unwilling to move even within their country's borders to fill open positions.

The concern about brain drain, an aging population, and people too rooted to home should be familiar to readers of this blog. Labor's willingness and ability to relocate in search of better economic opportunity is straining Europe's overburdened infrastructure, which is increasingly consumed with supporting retirees. There is a problem of too much mobility, as well as too little.

The answer to all of these woes is increased immigration. But akin to the situation in the United States, there is substantial political opposition to this solution. Pittsburgh has a similar problem, though much less control over the immigration situation. Still, the issue is best understood in terms of inmigration (or lack thereof). Talent should take full advantage of locational choice. Given Europe's success in improving human capital, I'm not surprised they must open their borders.

Thursday, June 07, 2007

Genealogy of Pittsburgh

While I've been babbling about trust and human capital, Pittsblog seized upon a juicy Burgh Diaspora moment in the Post-Gazette. First, there is some question (albeit a minor aside to Mike's main topic of conversation) about the importance of the 1980s on the collective psyche of Pittsburgh. Take a gander at Chris Briem's post about putting recent unemployment data in historical perspective. The graph concerning Pittsburgh unemployment relative to the unemployment rate in the entire United States does indicate a massive shock to the regional economy to start off the 1980s. Employment opportunities were much more abundant outside of Pittsburgh. So, the pain of the 1980s seems real enough.

Second, Mike uses the Post-Gazette article to spark a debate about Pittsburgh's self-defeating mindset. Is the region on the road to recovery from the economic death spiral of the 1980s; or is Pittsburgh's malaise much more deeply seated and therefore more difficult to overcome?

If Pittsburgh has a problem, it is too much navel gazing. I don't think Pittsburgh's plight is any different than that of Buffalo, Cleveland, Cincinnati, Detroit, and all the other Rust Belt tales of woe. That Pittsburgh is the post-industrial urban rule, not the exception, indicates that the current stretch of risk aversion is a product of recent events. If anything, Pittsburgh has weathered the economic storm relatively well.

I'm bullish on Pittsburgh. Regardless, the positive outlook the region needs is in abundance among the Burgh Diaspora. That which seems to be holding Pittsburgh back is its greatest asset, a strong sense of identity that travels well over long distances. I've seen this firsthand as a member of Steelers Nation.

Wednesday, June 06, 2007

Limits of Connectivity

You might be ready to outsource your life, but whom do you trust with the job? The bloggers over at Foreign Policy discuss the shortcomings of off-shoring in order to save money:

Last month, Passport blogged about an online newspaper in Pasadena, California, that hired two journalists in India to cover the meetings of the Pasadena City Council, which are broadcast over the Internet. Many U.S. reporters are understandably outraged. They believe that important nuances will be neglected if Indian reporters don't understand the local culture and institutions, and aren't physically present to report the news.

The local "nuances" represent the opportunity costs of off-shoring. The locals enjoy a comparative advantage and therefore can charge more for the not-so-same service. As a result, you will continue to pay through the nose for transactions that require close proximity.

Thanks to improved telecommunications, the value of explicit knowledge is decreasing. Meanwhile, the price of tacit knowledge continues to rise. Tacit knowledge exchange is notoriously difficult, thus serving as a barrier to outsourcing. Tacit knowledge also limits migration, which is why most moves tend to be over short distances.

Relocating far from home is still a risky proposition, but knowing somebody on the other end is a great way to lower the opportunity cost of long distance migration.

Tuesday, June 05, 2007

Bar the Talent Gate

When labor mobility is king, local returns on investments in education are hard to find. Regardless, regions continue to try to solve this riddle. Pittsburgh's latest effort, via Carnegie Mellon University, is Project Olympus. Pittsburgh doesn't lack initiatives to identify, attract, and retain talent. Part of the problem is the absence of coordinated efforts:

Although there is an ever-growing cadre of economic development entities operating in Pittsburgh, [Project Olympus director Lenore Blum] acknowledged, "they're not all tied together." ...

... Catherine Mott, managing partner of Wexford-based BlueTree Capital Group LLC, said Olympus can help fill a gap in the market.

"What's missing is there's no central place for anyone to go to tap talent," she said.

I do think that Pittsburgh would benefit from one stop talent shopping, particularly when courting financial capital from outside of the region. Pittsburgh needs a cohesive vision that appeals to a broad constituency. Again, I'm reminded of Tim Zak's comment in one of Mark DeSantis' Pittsburgh Quarterly articles about the missing ingredient for an economically resurgent region: A "critical mass of like-minded people."

I know that CMU is pushing hard to establish itself as the key entity promoting innovation in Pittsburgh. But is what is good for CMU, good for Pittsburgh? I don't see much harm in trying. That CMU is even interested in promoting itself as a valuable regional asset is good thing. I figure that CMU could thrive without much Pittsburgh benefit. Still, I'd like to know if and how Project Olympus is aligning itself with the "ever-growing cadre of economic development entities operating in Pittsburgh."

Monday, June 04, 2007

Doctor Brain Drain

A crisis is brewing in Pennsylvania. Apparently, there is a shortage of doctors. How else can I explain the bill introduced in the State House to forgive the student loans of graduating doctors who stick around for 10 years? Once again, a politician is beating the drum of brain drain:

Mr. Shapiro said that only about 8 percent of the doctors who train at Pennsylvania medical schools end up staying and practicing in this state. He also said the percentage of Pennsylvania doctors under age 35 has been dropping for the past 15 years and now stands at 3 percent.

I'm not sure what is so special about doctors who train at PA medical schools. If there are jobs available, Pennsylvania should open up its treasure chest to the entire country. Representative Shapiro is pandering to his political base, not creatively solving a problem.

Shapiro's bill is another example of the poor returns on investment in education. 92 percent of doctors trained in PA medical schools go elsewhere. I surely hope there is no state subsidy in play. Otherwise, the state is ripping off the taxpayers.

Economic Efficiencies of Illegal Immigration

Migration policies are often irrational (more on that in a later post). In economic terms, the life of a local is worth much more than that of an outsider. We would rather do business with someone we know and trust than choose the best bargain or talent. The Economist stresses this market distortion in an evaluation of the proposed immigration reform in the United States:

Unfortunately, the senators' plan ignores the economics of illegal immigration. Its laws of motion are set out in a recent paper by Gordon Hanson of the University of California, San Diego. He points out that unskilled labour is increasingly scarce in America. Since 1960 the share of native-born workers with less than a high-school diploma has fallen from 50% to 12%. In response, illegal immigration has proved to be a fairly efficient system for matching willing workers with eager employers. Some 24% of farm workers, 17% of cleaners and 14% of construction workers are foreigners doing their jobs illicitly.

This workforce is geographically mobile, and sensitive to economic conditions in America or at home. One study in the 1990s showed that a 10% drop in Mexican pay relative to American wages prompted a 6% increase in attempts to steal across the border. More recently, the incentives have shifted the other way. A slowdown in remittances to Mexico and other Central American countries suggests the housing bust, and home-building slump, may have reduced the pace of illegal immigration.

The mobility of illegal immigrants is an economic asset for the United States. The economic downside is marginal at worst. The furor over these trespassers is nothing more than flag-waving patriotism and unsubstantiated cultural anxiety.

Labor mobility is a great strategy to deal with the whims of the market and the capricious forces of economic globalization. Standing in the way of success are xenophobes and the Stuck. The Mobile threatens the Stuck, but the concern is often baseless.

Sunday, June 03, 2007

Human Capital Geography

Why should states and localities care about education? An article in Sunday's New York Times Magazine tells the story of an emerging trend in United States public schools, letting children age a bit more before attending kindergarten ("redshirting"). The perception is that more mature, relatively speaking, children test better resulting in the appearance of an improved state school system:

States, too, are trying to embrace the advantages of redshirting. Since 1975, nearly half of all states have pushed back their birthday cutoffs and four — California, Michigan, North Carolina and Tennessee — have active legislation in state assemblies to do so right now. (Arkansas passed legislation earlier this spring; New Jersey, which historically has let local districts establish their birthday cutoffs, has legislation pending to make Sept. 1 the cutoff throughout the state.) This is due, in part, to the accountability movement — the high-stakes testing now pervasive in the American educational system. In response to this testing, kindergartens across the country have become more demanding: if kids must be performing on standardized tests in third grade, then they must be prepping for those tests in second and first grades, and even at the end of kindergarten, or so the thinking goes. The testing also means that states, like students, now get report cards, and they want their children to do well, both because they want them to be educated and because they want them to stack up favorably against their peers.

If such incentives improve human capital, do states benefit? The NYTM somewhat cynically indicates that states are bumping up the average age of children in kindergarten as an inexpensive way to improve standardized test scores thereby producing schools that appear improved. I'll take that as a hint that states have little intrinsic incentive to invest heavily in education.

I'll describe this issue in another way. If someone living in a region has no children, why would they vote for higher taxes to fund schools? The better educated children are likely to leave the area and the childless voter doesn't stand to benefit from better schools. The pressure on the states to improve schools comes largely from parents upset about the condition of the institutions their children must attend. The concern is not about enhancing regional human capital, or even state human capital. The fuss is mostly about parents looking out for the best interest of their children.

If I wanted a better school for my child, I'd move to a better school district. However, I'd consider the cost first because of what I perceive to be diminishing returns on my investment. Thankfully, I'm mobile enough to make such choices. Some parents are stuck and comprise a captive market. I'd guess school districts with relatively immobile populations are some of the worst in terms of cost efficiencies.

Given the labor mobility in the United States, the scale of funding for public schools is dysfunctional. The return on investment in human capital is nationwide, not local. The American tradition of small scale school politics is quaint and outdated. While I am at it, state subsidies for higher education are also a bad bet.

I write all of the above as a retort to the opinion printed in the Post-Gazette, "In praise of property taxes." The author's point is that there is no social benefit to subsidizing large homes for senior citizens. Why should a senior citizen with no kids living in the area subsidize your child's education? Boil the article down. The author wants senior citizens to move instead of parents with children in school to move, a classic case of one's self-interest pitted against another's self-interest. In that light, I think the author looks quite petty.