Special Announcement: Hilary to Join the blogs of Dayton Most Metro!!

Hello out there!!

 

Not that there are many of you- since I have not posted in forever. But in case your still out there, I will now be featured on Dayton Most Metro! Yay! 

I know, I know you guys are just bursting at the seams to read all my economical talk.  Nevertheless, I will bring my optimistic realism to DMM. 

I'm unsure about the contents, but it will likely involve economic development, neighborhoods, and creative capital. 

PS: URBAN NIGHTS IS TONIGHT!!! 

I'll be at Blind Bob's promoting Jazz Advocate between 8:30 and 11 pm. Stop by to see me (and GreenHybrid, obviously). 

Pure Michigan & economic development theory

Fellow blogger, Franz, over at One Sun, One Tree (http://onesunonetree.blogspot.com) recently commented on Michigan's successful Pure Michigan! campaign.  He is right- it is a very successful campaign, aiming to popularize Michigan's natural bounty. The lakes! The rivers ! Fruit! Food! Art! Wine! Technology!   Yes, I am feeling a little nostalgic. Thanks a lot Franz- I now want a huge tart cherry pie. 

It has been extremely successful, particularly in West Michigan and communities around Lake Michigan.  Why has this campaign been so successful?  Is it clever?  More clever, than say, Dayton Patented: Originals Wanted? Well, yes it is clever.  And yes, I think it is more clever than Dayton Patented. Eesh I hate that slogan. 

But really, it relies on classic economic development theory. I believe this to be the key to its success.  Scholars of economic development (ie International Division of Labor IDOL for short)  have noted three keys area of development that are generally linked to positive economic gain.

 1) Attract High tech- (ie medical, aerospace, computer tech, etc)

2) Become a Global City- (ie financial. Make bureaucracy- see my post on Saskia Sassen

3) Get Tourism.  

Note that the Pure Michigan! campaign primarily promotes tourism to Michigan.  It secondly trumpets Michigan's contributions to high tech industries, thus fulfilling categories 1 & 3.   Pure Michigan commercials often juxtapose the beauty of Michigan's lakes, streams, nature with pictures of high tech researchers, airplanes, etc.  This advertises Michigan's diversity, desirability, and success.   I think this campaign is successful because it blends traditional images of Michigan, with images of Michigan's economic future.  IE, they are not relying on just one industry to pull them out of an economic wasteland.  Michigan got burned when it tied the state economy to the Big Three. Now they are mixing, matching, and finding a path that represents the 'core'  of the state.  Pure Michigan! is not enough to save the state's abysmal economy & atrocious labor problems. It is progress, however, and I am happy with progress. 

There are two other key theories in emergence, 1) the presence of social capital (Florida, Putnam, Flora & Flora, Feagin) and 2) Green initiatives (Flora & Flora, Glasmeier & Farrigan, Singh & Allen). I have lots to say about this and am sure to examine it in a future post. 

For now, take Franz's advice and go watch some Pure Michigan! adds on YouTube. 

Antioch College

I really feel for the the students and professors of Antioch College.  Antioch was one of the greatest liberal Arts colleges in the country, and produced distinctive graduates like Coretta Scott King. 

Generally, I do not like USA Today. However, I found this article about Antioch:  "Antioch Faculty to Keep Teaching as School Closes"

It really made me think about how important our academic institutions are to our region.  What has happened to Antioch is a shame.  I hope that it re-opens and continues to contribute positively to Yellow Springs and our region. 

Debunking National Statistics

After a very  long hiatus, I am back.  I am sorry about the long break.  After the quarter ended, I thought that I would get less busy, not more busy!! Between buying a house, working, and research, I have neglected the blog.

Today I start a fresh, with a goal to post at least three days a week for the rest of the summer.  That's right friends, 3 days a week! Today, I bring this post from the fifth floor of the UD library, where I have the most perfect view of the Downtown sky line and the Riverscape fountains. 

Today's question revolves around defining economic progress. What is it? How do I define, and how do others define it? If you listen to NPR, you often notice that they will announce statistics like the 'job creation rate,' 'unemployment rate,' 'regional health index,' and sometimes the 'national economic growth index.'  Do you often wonder, what the hell does that mean, exactly?

The job creation rate is pretty simple: it is the "rate" at which jobs are created. It is a linear regression of job creation controlling for a number of factors, (likely inflation, year, quarter, etc.) Thus the rate is the slope of the regression line. 

What is the unemployment rate? Like the job creation rate, this is the slope of the regression line.  However, I must use caution.  The only people that are measured in the unemployment rate are those that have visited or applied for unemployment within the last month.  While the rate does control for factors- like inflation and time of year- it is not counting the homeless, chronicling unemployed or underemployed, etc.  Let's say Bob used to work at the GM chassis system plant and took a company buy out.  Bob is unemployed, but not counted in the national unemployment rate.  

What is the regional health index? This one is more complex- it a statistic that uses multiple regional statistics, like unemployment rate, regional GDP, etc. to gauge the general health of a regional economy.  This statistic is generally tabulated either quarterly or yearly at the end of the fiscal year. Politicians like to bring this statistic up a lot, but generally speaking it tends to gloss over many regional issues.  

The national domestic growth index tries to answer one question: did the economy grow this year?  They often change the statistical qualifications, so it is hard for me to say exactly how it will be tabulated this year.  However, it is important to note that the accuracy of this statistic is entirely dependent on the measurement of economic "growth"- this tends to be very misleading.  For example, Key Bank will be moving downtown locations this year.  The city of Dayton has claimed this as a 200 job creation.  However, in actuality, those 200 jobs already existed- at a different building downtown. Nevertheless, this will count as 'economic growth.'  This is not endemic to Dayton- many regions and national agencies would count that as economic growth, when in actuality it is zero sum movement.

Many of you have probably notice that I do not trust these kinds of statistics. Why? Because they can be deceiving.  Does the unemployment rate actually tell you how many people are unemployed? No. Do we know how many people in this country are unemployed in actuality? Not really. There are estimates, and they are not pretty.  They range from 5 to 50 million. Why the huge range? Because we really do not know how many people are unemployed. 

Have you often wondered why so many economics are hesitant to say that the US is in a recession? Well, it is because we don't know. 

That's right. I said it. We do not know. The experts have no clue what is going on. Certain indicators show that the economy is holding okay, while others are disparaging.  What should we make of this?  Many scholars of economics (economists, sociologists, economic geographers) are taking a wait and see approach.  

My opinion is that we can't know what is wrong with the economy when we are measuring its health improperly. That's why I'm on the ground. Talking to people. Going to community meetings, visiting local businesses, taking factory tours, talking to local policy makers and local officials.  It is important that we keep everything in perspective. In bad economic times, some regional economies still prosper.  In good economic times, some regional economies suffer.  Why? Because they have their own dynamics.  We can't understand these dynamics with computers and statistics alone. 

Infrequent Post warning!

Hello, everyone. I am sorry about the infrequent posts! I made a trip to Iowa for my brother's graduation, and now work has spiraled out of control.

Sadly, I will only make a few posts between now and June. The end of the quarter is near and I have so much work to do. There are many papers to grade, finals, and a lingering cold.

I will make a post by the end of the week about the status of one of my projects, and will also post a review of Josh Whitford's book, The New Old Economy.

Combatting Brain Drain

What is brain drain? No, it's not what my brain looks like after copious amounts of statistics homework. (Though it probably looks fried!) Brain drain refers to an out-migration of college graduates (generally recent grads) from local Universities to different city centers. I'm sure most of you knew that, but I figured I'd lay it all out on the table.  I'm really rambling today, and as I said, I'm suffering my own version of brain drain as I reach the last half of the academic quarter. 

I was inspired to write about this because of the pizza, beer, and conversation I had at South Park Tavern this Friday.  Some that I talked to seemed shocked that a young, 20 something like myself (and my significantly more successful fiance) would volunteer to stay in Dayton. There is a perception among young professionals AND the general public that Dayton is not a desirable city to live in, nor is it a place that can offer young graduates life long careers. Of course, I disagree. Dayton really IS desirable. We need to do a better job to market the city, so that UD and WSU grads seek jobs in Dayton and stay in the region. I think cooperative education can go a long way in helping college grads to make business connections that can help them find good jobs. I think aggressive marketing  can help. We should also try to forge connections between businesses and local colleges (specifically professors and career counselors).  Additionally Industries already in Dayton need to make it a priority to hire local college grads first, if possible.  

This is somewhat of a personal issue for me.  Like many of my friends, I was lured by the bright lights of the big(ish) city.  I dreamt of Seattle, New York, Chicago... but I ultimately found myself  60 miles from Dayton, in the state capitol.  During my time living there, Dayton never seemed so far away or so attractive. I longed to move back to Dayton. I spent so many weekends in Dayton, I decided to move back.  It's not just the familiarity to the city.  It's the community. I'm in Dayton because I love the city and believe in it. I like bumping into friends in the grocery store and not having to wait 2 hours for a drink at my favorite bar. I love going to the market and seeing my former professors.  I can catch a movie at the spur of the moment. Remarkably, I can go weeks and weeks without ever visiting a chain store or restaurant. 

I know that Dayton has problems that need to be fixed.  These problems, however, do not make Dayton undesirable.  I started my research project because I wanted to know how Dayton could be improved.  Aside from my research, there is something else that keeps me coming back to Dayton:  It's my home.  NYC and Chicago are nice to visit.  But at the end of any day, I picture myself, at home in Dayton. The city of Dayton and the people of Dayton shaped the course of my education and my life. Scholarships from local foundations and companies made my UD education possible.  I am committed to Dayton and committed to combatting brain drain.  I'm here to stay, and I hope many of my friends and colleagues will do the same. 

What is Economic Success in a Mid-Size City?

One of the challenges I have faced (and still face) has to do with measuring success in mid-size cities.
Should I look at increases in the number of businesses? Parks? Programmatic changes? Unemployment rates? Arts and entertainment? Inequality in a city? From the surface, many of these indicators can be misleading. Revenue, for example, appears to be a statistically good indicator; yet, when broken down, it is inadequate. Metropolitan areas like Dayton, Grand Rapids and Peoria do not have near the revenue of larger cities. Comparisons between mid-size cities bring mixed results. Despite similarities in size and industries, these three cities have vastly different business revenues. Additionally, the calculations are different, depending on who has tabulated the data. The census, the cities themselves, and other data sets are all different. Using city statistics, Dayton seems to have the largest business revenue. When it is broken down, however, much of that revenue is part of Wright Patterson Air Force Base and its operating budget. WPAFB is an asset, but it does not create products, per say. In theory, this asset should give Dayton an advantage over similar cities. This does not seem to be the case, however.

Let's take a look at unemployment rates. Is this a good measure of economic success of a city? Statistically, Dayton again seems to have the edge over Grand Rapids. The unemployment rate in Dayton hovers right around 6%; in Grand Rapids, it is 6.5%. Yet, Grand Rapids has the lowest unemployment rate in the state of Michigan. In February 2008, the Grand Rapids statistical area had an unemployment rate of 6.5% as tabulated by the Bureau of Labor Statistics. The unadjusted national average is 5.2%. Michigan's unemployment rate is 7.2%, with many regions like Muskegon and Detroit well over 8% unemployment. In Ohio, the unemployment rate is 5.7%. In February, Dayton's unemployment rate was 6%. In March, it was calculated at 5.7%, but this may be because less people are reporting for unemployment benefits, and not due to true change in Dayton's economic patterns. Still, the difference in unemployment rates between Grand Rapids and Dayton favors Dayton.

If statistically Dayton has an edge, why, then are cities like Grand Rapids, Peoria, and Louisville hailed as more successful? I think these statistical measures hide the progress made by GR, Peoria, and Louisville. Many scholars and advocates have argued that economic change should start in urban, downtown areas. This is exactly what GR, Peoria, Louisville have done. Larger cities like Milwaukee, San Francisco, and Cleveland have tried this approach as well. GR and Louisville have approved and worked quickly on multiple, massive building projects in the "hearts" of their downtowns. GR and Louisville have also successfully attracted University presence, new museums, and medical industries to their downtowns. Like Dayton, Grand Rapids has also moved rapidly on creative movements, capitalizing on its abundant under 30 population. Lastly, mass diversification of these cities' economies does not show in aggregate statistics. In particular, Grand Rapids decided to attract new industries, but NOT move away from its manufacturing base. Instead of starting from scratch, GR tried to build on the good qualities the city already possessed. Grand Rapids eschewed financial industries for this reason, opting for innovative approaches not used anywhere else.

Initiatives in Grand Rapids, both non for profitsand programmatic initiatives, try to sustain manufacturing industries while at the same time try to attract new industries that are technological, medical, or specialized services. These programs encourage manufacturers to adjust their business models to account for globalization. One program even helps to connect innovators with local manufacturing, keeping both the ideas and products in Grand Rapids.

I think I have shown (albeit briefly) how aggregate statistics and raw number can be deceiving. This is why I choose to measure economic success differently. I measure economic success through building projects, number of programs, types of programs, public and private initiatives, grass roots movements, citizen participation, arts and entertainment, parks and recreation, and University involvement.