Sunday, November 07, 2010

Geographic Mobility Incubator

Americans still cannot move their way out of unemployment. The recovery is geographically uneven. However, those most in need of a job are stuck in place:

In a broader sense, the job prospects of nearly all Americans will hinge on education. U.S. competitiveness, like that of all rich countries, will increasingly revolve around moving higher up the food chain in every sector. China may be the world’s factory, but it has yet to create an iPad. Innovations of this sort create truly desirable jobs.

But to ensure that America remains an innovation hub, we’ll need to not only churn out more highly skilled college-educated graduates, particularly in the sciences, but also retrain existing workers to take on jobs in new sectors. Another key difference of this most recent recession from those past is that there is a large mismatch between unemployed workers and existing jobs. A boom in nursing or teaching jobs won’t help out-of-work machinists and builders. “For some time now, there’s been a terrible skills mismatch out there in the economy, particularly for Americans who have been unemployed for six months to a year,” says Bernard Baumohl, chief global economist for the Princeton, N.J.–based Economic Outlook Group. “It’s going to be difficult for someone who has been in the real-estate construction business, building homes for example, to be able to get jobs in this market. So they would love to be able to work as a computer programmer, but they have no skills to do so.”

What’s more, America’s much-heralded labor flexibility has taken a hit because of the housing crisis. The U.S. had traditionally enjoyed lower unemployment rates than Europe, in part because American workers were more willing to move from state to state in order to take new jobs. But with so many homeowners underwater on their mortgages, their ability to relocate has diminished. The result? There are plenty of jobs to be had in such places as Washington, D.C.; South Carolina; North Dakota; and Louisiana. But the unemployed in Nevada, Michigan, California, and Florida can’t afford to take them.

As detailed above, lack of labor mobility is the other major drag on economic growth in those regions which weathered the recession well. Cities and states that have done a poor job producing homegrown talent are biting off more they can chew. (Note the ubiquitous reference to Pittsburgh as the development model of choice) It is even worse in struggling areas such as Bakersfield, California. Without robust inmigration, a significantly more educated workforce will take a generation or longer.

The picture is relatively rosy in the cities better known for brain drain. To be sure, lack of skilled workers is an issue. The domestic diaspora comes to the rescue:

The Hello Regina campaign is a bold bid by the Saskatchewan capital to close the labour gap exacerbated by the province’s resources-fuelled economic growth – a surge underlined by the $40-billion bid by an Australian mining company for Potash Corp. of Saskatchewan.

“We’re going through a bit of a boom here, and to ensure we have enough talent based on our economic growth, we need bodies – we need people,” says Regina Mayor Pat Fiacco.

Where better to hunt than Calgary, which is brimming with Saskatchewan émigrés – as many as 250,000, according to some estimates. If that number is even remotely accurate, greater Calgary would rival Regina (population 200,000) and Saskatoon (250,000) as a home for Saskatchewanians.

This anomaly is the product of decades of migration by smart, ambitious Saskatchewan natives who could not find the jobs they coveted in their often economically inert province.

Regina and Pittsburgh have much in common. Each region's expatriates have built the economies of other boomtowns. Now they are ready to come home. The hiccup in this plan is the same issue keeping the unemployed from leaving Michigan. Brookings suggests a mobility bank. That initiative addresses outmigration from distressed cities. Attracting the best and brightest who left is another story.

Regina's PR campaign isn't novel. Rebranding efforts are a dime a dozen. The logistics of return pose the biggest barrier, by far. There is plenty of low-hanging fruit ready and willing to move home. Hello Regina is a misuse of resources.

I think the answer is a geographic mobility incubator. The idea is to catalyze the boomerang migration of those prodigal sons and daughters who are highly intrinsically motivated (for whatever reason) to return. Aid is given to expatriates who address talent shortages or are willing to live in a neighborhood in need of revitalization.

All the money spent on retention or regional branding would be better allocated to this incubator. Given the current unemployment situation, I'm convinced this is the way to go for regions producing dynamic diasporas. Now I need the opportunity to put this theory into practice.

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