Monday, April 04, 2011

Emerging Talent Migration Patterns

Real estate refugees fleeing expensive California isn't news. The surprising part of that migration pattern is the continual influx of talent into ridiculously overpriced San Francisco. Richard Florida does a good job of explaining why people continue to cram into urban cores.

Less understood is the spillover to destinations such as Portland, Oregon. For example, I'm aware of more than a few tech workers who fled the Bay Area or Silicon Valley for the cheaper confines of Fort Collins, Colorado. Some kept their old jobs, taking those big salaries with them. It is a form of geographic arbitrage for the top tier of the upper middle class. It is also proof of Flat World migration. Confounding the Creative Class relocation model, the world gets less spiky and new centers of innovation emerge thanks, in part, to lower costs.

The 2010 Census revealed an even more unexpected migration. Minorities are leaving the largest cities in droves. They aren't just heading South. Many of them are moving to relatively nearby Rust Belt cities such as Binghamton:

What was most surprising about the recently released census figures was the city as a whole lost only four people, going from 47,380 to 47,376 people in 10 years, said Tarik Abdelazim, Binghamton's planner. ...

... The greatest changes are in the city's First Ward and North Side, where the number of whites fell nearly 10 percent in the past 10 years, census data shows.

"We've seen the same migration patterns other cities across the nation have shown," Abdelazim said.

That's because people migrate to an area where they can afford to live, said Binghamton Mayor Matthew T. Ryan.

Rents in Binghamton are far cheaper than in New York City. Economically, minorities are also less likely to have the opportunities that other people have in bigger cities, the mayor said.

"When you have cities not providing affordable housing that is needed, there will be migration," Ryan said. "Upstate cities have this."

What seems to be happening is that whites are following Florida's Creative Class model, leaving Binghamton for the likes of New York City. This drives up the cost of living in NYC as more neighborhoods there are gentrified. This inflow displaces primarily minority populations who then seek the opportunities available in struggling Binghamton.

The above trend tends to get buried under the strong numbers of immigration and robust replacement rates that grace the largest cities, the so-called population winners. In terms of domestic migration, many cool cities are shrinking just like Pittsburgh or Cleveland. There are only so many people who can afford to live there.

But is an emphasis on vocational training the right direction for Texas? Scott McCown, executive director of the progressive, nonpartisan Center for Public Policy Priorities in Austin, says that “community colleges are a bright spot” on an otherwise bleak educational landscape in Texas, where keeping business taxes low takes priority over an educational pathway toward advanced science, math and engineering.

Low taxes and limited regulation have become articles of faith among state policymakers who fail to distinguish between “what God did for us and what public policy did,” McCown adds. He is discouraged by the state’s unwillingness to invest in research and education at levels needed to reverse what he sees as a state “caught in a downward spiral.”

Texas is in a squeeze. A third of the workforce is caught in a skills gap that is experiencing a rapid decline in jobs available. On the other side is the paucity of highly skilled workers (i.e. knowledge workers) produced instate. Relying on migration is a risky prospect. Tech companies would be better off locating near where the talent is produced (e.g. Pittsburgh).

Whichever workforce development policy course Texas chooses, the benefits are far off in the future. Migration is the quick fix. Education is the long, hard slog. Many companies can't afford to wait. Time to move to the Rust Belt.

No comments: