Monday, April 23, 2012

Michigan Talent Economy

Napoleon wasn’t short. Wonkblog uses that tease to introduce a short video about five historical misconceptions. My own favorite misconception is the clamor about brain drain. Lou Glazer (Michigan Future) obliges with his lament about Michigan's inability to do the Pittsburgh:

Cities – with the support of their regions and states – across the country get it. And have made retaining and attracting young talent an economic development priority. Unfortunately, not here in Michigan.

One of the cities that gets it and has reaped the benefits is Pittsburgh. reports that the region has reversed a generation of out migration of young talent. They report the number of 18-24 year olds living in the region was 67,445, by 2000 it had shrunk to 49,461. They write: ”Specifically, the people who were leaving were the young, 20-something, professional and educated workers who we really needed to transform and move our economy forward,” Chris Briem, chair of Pitt’s Center for Social and Urban Research. But by 2010, after decades of efforts to revitalize the central city, they can write that the brain drain has been reversed as the number of 18-24 soared by 16% the last decade to 57,745 in 2010. ...

... Dr. Briem is exactly right when he says: “the young, 20-something, professional and educated workers who we really needed to transform and move our economy forward…”  As we say in closing our presentations: “Either we get younger and better educated, we get poorer.”If we do everything else as well as can be done that we call economic development and don’t retain and attract young talent, Michigan will be one of the poorest states in the country. Retaining and attracting mobile talent is that important.

The implication is that Pittsburgh solved the same problem plaguing Michigan. In the grand scheme of things, Pittsburgh's demographic predicament is unique. As for Michigan, the baseline assumptions are wrong. Five "Fallacies that Misinform Our Thinking About Michigan’s Population and Economy":

  • Fallacy #1: Michigan has a chronic problem of net out-migration.
  • Fallacy #2: Michigan has a chronic pattern of high out-migration by young people.
  • Fallacy #3: Michigan has a chronic brain drain.
  • Fallacy #4: Michigan has a chronic unemployment problem, and it currently has one of the highest unemployment rates in the nation’s recent history.
  • Fallacy #5: Not much hiring takes place during difficult economic times.

The above is from Michigan State Demographer, Kenneth Darga. Don't shoot the messenger. It's a sobering look at the data. Darga explains where the misconception comes from and then blows it out of the water. From the section discussing Fallacy #3:

We actually gained quite a few more educated residents than we lost during that period. You never would have suspected that from articles you may have read in the newspapers, but that is what actually happened, according to the Census Bureau’s American Community Survey. Part of our “brain gain” represented Michigan natives returning from colleges and universities in other states.

Brain gain. Michigan. Return migration. My work is done.


Allen said...

It's fair to say our measurements for a brain drain should be more complex than simply numbers in versus numbers out. But we shouldn't look at degrees and assume that all that matters is the existence of a 4 yr piece of paper. Michigan is loosing skilled workers to other states. They may not have PhDs but they're vital for the manufacturing economy of today and the future.

Nathan Peters said...

As a native and current Pittsburgher, I have some issues with you analysis. The reversal of the brain drain began in the late 1970's and early 1980's with the collapse of the steel industry, so any analysis that doesn't begin there is a bit faulty. In addition, I do not think you can point to any specific policy changes that that have reversed the trend. The clear driver of the brain gain is the Marcellus shale industry, which has only been around for less than a decade. For that reason, using Pittsburgh as a model for Michigan isn't too helpful (unless Michigan discovers a sea of natural resources under their feet.)