Monday, November 07, 2011

Stuck In A Jobless Recovery

How can your region solve the brain drain paradox? That's the question that drives my blog, Burgh Diaspora. In terms of developing talent, migration functions in the same way as education. Furthermore, the two are positively correlated. The higher the level of education, the more likely someone is to leave for greener (i.e. richer) pastures:

There’s a perennial paradox of youth migration. To thrive, hometowns need the best and brightest to stay put. But yet, in many ways, we also encourage them to leave. Network associate members Maria Kefalas and Patrick Carr, in their book “Hollowing Out the Middle,” discovered this paradox in the small Iowa town they studied. In numerous ways, the town, which suffered from chronic brain drain, rallied behind the “best and the brightest,” boosting their ambitions and dreams—essentially encouraging them to seek those dreams elsewhere. Demographer Jim Russell on his blog Burgh Diaspora gets to the heart of it, asking: “Since education makes a person more likely to leave your region, how do you justify your investment in human capital?”

The heart of it is that the best way to stop brain drain is to deny people education. As for retaining graduates, a successful initiative hinders economic development. The move to improve is the missing ingredient to the American recovery:

Another reason for decreasing mobility is the aging of the population; older Americans are less likely to move than young ones.

And then there’s the oft-noted rise of dual-income families. If a sole earner loses a job, it’s relatively easy for a family to pack up and move to a place with more employment opportunities. But it requires a grand leap of faith to do so when one member of a two-income family loses a job; more likely, the family stays put and holds onto the remaining job for dear life.

There are job openings going unfilled. Ideally, talent moves from a place with less opportunity to a place with more opportunity. This reshuffling of the workforce speeds recovery. It is also why the more geographically mobile earn better wages. Most people are unwilling (or unable) to take the relocation risk.

The dual-income drag on geographic mobility is familiar to me. Return migration to Rust Belt cities (and rural communities) is hindered by the trailing spouse problem. What is the solution? Again, Time magazine:

But McKinsey does see hope for this increasingly static workforce in the changing nature of work, and in particular in the technologically driven development of ”anywhere, anytime” work that doesn’t require the employee to be located at a company facility. “Their ability to work with colleagues and customers continents away in ‘real time’ and perform almost any function remotely provides a whole new level of flexibility,” the report explains, adding that 26% of the execs surveyed plan to employ more people working at home in the next five years, compared to only 15% who said they plan to offshore more jobs.

Decoupling work from the demands of geography is how the labor market is restructuring in the wake of the Great Reset. I've written about the 1099 economy. Freelancing, the one employee start up, is a surrogate for geographic mobility. Jobs, instead of talent, are migrating. A region could do much more to encourage such a career transition. Rust Belt cities could dangle the 1099 carrot to catalyze more return migration. Labor mobility doesn't necessarily entail geographic mobility. One can move without ever leaving.

1 comment:

ArroyoLover said...

The Rust Bowl cities lose their best and brightest partly because they don't 'track' them when they leave for college - then recruit them to come back home to work at graduation. The demographics of the Millenials, today's young adults, clearly shows this group to be 'nesters' and 'homebodies,' very different from the 'explorers' of the Baby Boom generation. I've said it before and I'll say it again: Create a Native Son/Daughter Program to incentivize 'baby boomers' who have moved away to return 'home' with their skills and capital to start new ventures: then recruit the Millenials to work for these exciting new local companies. In the final analysis, the joy of our technological age is that YOU CAN LIVE ANYWHERE and make a living as long as your community is 'wired.'