Over the past few years, there’s been something of a research backlash against occupational licenses, such as those earned by people working in hair or nail salons, plumbers, dental assistants and the like. Critics contend that occupational licenses create barriers to entry, and make it harder for low income people and younger workers to enter these professional fields. Armed with this data, the Trump Administration is gearing up to reform how states manage occupational licensing. Somewhat surprisingly, this effort is quite similar to strategies proposed under the Obama Administration back in 2015. However, a recent research paper suggests some caution in this area as it finds that occupational licensing may reduce income gaps and boost the incomes of lower income and minority workers. Licenses help (or hurt) because they serve as market signals, providing evidence of key skills and knowledge. This signaling may be especially important for low skill or low income workers, who often lack other credentials or means to signal work readiness.
This debate is important beyond the halls of academia. Occupational licensing is big business, as ¼ of all US jobs require some kind of occupational license. Licensing and credentials have also become a core activity of our workforce development system. Indeed, they are one of the best means to help people build skills and enter onto promising career pathways. While we can all cite silly licensing efforts, we must also recognize that these licenses and credentials help people enter and prosper in the workforce. Given the mixed level of evidence in the field, we should be very cautious as reform efforts move ahead.
It’s vacation time and, if you’re lucky, you’re heading off for vacation at your second home or vacation rental at the beach or in the mountains somewhere. These homes can be lovely vacation spots, but do they bring real economic benefits to their host communities? Are they economic drivers or yet another sign of the growing wealth gap in America? Recently, I came across an interesting look at this issue in the New Hampshire Business Review. “The Economic Impact of Second Homes in New Hampshire” examines whether New Hampshire’s big vacation market brings real benefits to local residents. Second homes are big business in New Hampshire and across New England. Seasonal homes account for 10.4% of all homes in New Hampshire, and vacation homes play an even bigger role in Maine (16.4% of all homes) and Vermont (15.6%). Current research finds that these seasonal homes can have mixed effects for the local economy. Most second home owners are older and more prosperous, so they do spend money on amenities and do contribute to growth in local sectors like construction and real estate. But, they also serve to skew local demographics (vacation centers have older populations than other locations), and crowd out housing markets for families and lower income workers who cannot afford the prices paid for typical vacation homes. As such, many researchers contend that large concentrations of seasonal homes contribute to higher levels of income inequality. These concerns have led some European regions to place limits on second home ownership. Here in the USA, communities are still struggling with these challenges, but many places are beginning to take a deeper dive into finding ways to deal with the negative repercussions of large seasonal home concentrations. (Check out these examples from Sonoma, CA and rural Minnesota). As services like Airbnb and HomeAway continue to grow, we can expect that this issue will continue to get significant public attention.
When I find the time, I’m a big fan of hiking and kayaking. When paddling, one of the my biggest peeves is the Jet Ski, which is loud, intrusive, and annoying when I just want to chill on the water. I have generally marked my annoyance as part of my transition to becoming a crabby old man, but it ends up that maybe I’m just an early adopter of what some folks are calling “quiet recreation.” This is a new term (to me at least) that refers to pastimes like hiking, paddling, hunting, fishing, and birdwatching. The Pew Trusts and others have been assessing the impact of these activities for a few years now. (This category would exclude activities like ATV trails, jet skis, and other motorized uses.) A new study of quiet recreation in on Bureau of Land management lands in Utah finds that quiet recreation is quite an economic stimulus for the region, accounting for 74% of all recreation visits in the area. You can find other state fact sheets from the Pew Trusts here.
I realize that quiet recreation doesn’t work for everyone. For example, I know that many communities in Appalachia are enjoying great success with ATV trails. But, it’s nice to see the growth of concepts like quiet recreation or dark sky tourism, which is booming thanks to interest in the upcoming solar eclipse. They offer opportunities for us to commune with nature, but they can also generate real economic development benefits for regions that embrace these new approaches to tourism and recreation.
Yesterday, I braved DC’s heat to attend a Capitol Hill briefing on an excellent new MForesight report, Ensuring American Manufacturing Leadership through Next-Generation Supply Chains. The report is well done, and its policy recommendations are pretty straightforward. For example, it calls for continued (and increased) funding for key manufacturing programs like the NIST Manufacturing Extension Partnerships and the Manufacturing USA Network. These are all good ideas that are sensible to anyone with any knowledge of US manufacturing today. For me, the report’s real contribution is that it offers an excellent plain English explanation of why supply chains matter. If you’ve ever struggled (as I often do) in pushing supply chain policies to elected officials and others, this report will arm you with some good talking points and graphics for why all firms and policy makers need to focus on next generation supply chains.
Since we’re in the middle of “Buy America” week, let me offer another set of facts to ponder. On Monday, the White House hosted a Made in America product showcase highlighting 40 US manufacturers making a wide range of goods from firetrucks to Stetson hats to pianos. Of these forty companies, at least 29 have received support from the MEP program. Yet, MEP and other critical manufacturing efforts face major budget cuts this year. The spirit of American enterprise is alive and well, but these companies don’t do it alone. Perhaps it’s time for Congress and the White House to recognize that public investment matters. As President Trump’s old foe might have put it: “it takes a village” to build a manufacturing base!
I’m a member of my local workforce development board, the Alexandria-Arlington Regional Workforce Council. I’m biased, but I think we do a pretty good job. We’ve recently “upped our game” when it comes to publishing labor market data on our region. We sponsored a good study on the regional labor market, and are also currently involved in developing our regional Comprehensive Economic Development Strategy. I’m especially excited about the new data dashboards that Council staff are developing in cooperation with the workforce development team at Northern Virginia Community College. The latest dashboard, for Q2 2017, examines recent trends with a special focus on what’s happening in our area’s “hot” fields of cybersecurity and data processing, hosting, and related services. I’m a big fan of these dashboards as they are a quick read for local business leaders and elected officials, and they get a lot of public attention. Lots of regions do them now, so I’m not sure this is a “best practice.” But, if your local workforce people aren’t producing data in digestible bites like these dashboards, push them to embrace this concept. In addition to learning from the team here in Northern Virginia, there are lots of other great resource groups such as the Labor Market Information Institute and the Community Indicators Consortium.
I’ll be hitting the road to do a few training programs over the next couple of months. Here’s where you can find me:
Hope to see you on the road. Drop me a note if you want more information on any of these events.
The latest issue of our quarterly e-newsletter, EntreWorks Insights, is now available. This issue offers suggestions for how workforce developers could do more to support local entrepreneurs and promote economic growth, especially in rural regions. You can learn more and subscribe here.
I keep waiting for the big data revolution to hit us in the world of economic development. While the wait continues, I’ve recently been seeing some cool and intriguing uses of data and new visualization tools like Tableau. Here’s a rundown of cool stuff that we might call “little data” for now. I’ve got three good examples to share from a local, state, and a national perspective.
- The Economic Innovation Group’s Index of State Dynamism: This is a really interesting assessment of the slowdown of US dynamism, reflected in lower business starts, fewer relocations and the like. It’s good research to begin with, but, thanks to the use of Tableau, you can also access a very enlightening timeline that shows dynamism trends by state from 1992 to 2014.
- TNECD Performance Metrics: Tennessee’s Department of Economic and Community Development (TNECD) has just released an excellent new dashboard for their performance metrics. It’s a clean and very helpful site, and also includes some useful and distinctive metrics for various parts of the TNECD portfolio.
- Gilbert AZ Office of Economic Development: In Gilbert, AZ, the Office of Economic Development is using Tableau software to create data visualizations related to local workforce trends. This material is targeted to employers and provides a quick and compelling picture of the local talent base.
Better data—and better data visualization—is not just cool. It can have a real impact on how policies are developed and delivered—that’s the real bottom line. So, one last reference is to check out a new report, Learning to Thrive: How Data Can Fuel Better Workforce Development Results. This study portrays how focused benchmarking efforts, and improved data, have led to improved workforce programs and results in Minnesota’s Twin Cities.
If you follow the current policy debates, it’s been pretty tough to feel very optimistic about the future state of the US economy. Inequality is rising, robots are going to take our jobs, the skills shortage is hamstringing American industry, and the prospects for future growth are limited. This view was well portrayed in Robert Gordon’s excellent 2016 book: The Rise and Fall of American Growth. But, another narrative is also possible—that we’re on the verge of a major productivity revolution that may transform our economic prospects. That’s the message of a new Peterson Institute study called “The Case for an American Productivity Revival.” This essay argues that a number of factors are coalescing and should help create annual productivity gains that exceed two percent. Key factors include the development of big data and its impacts in low productivity service sectors like health care, the rise of productivity-enhancing robots, the rise of e-learning, and the ripple effects of current investments in information technology. These arguments are very compelling to me, and offer some cause for optimism. However, reality sets in when the authors turn to policy recommendations. While they believe that productivity improvements are likely, their success depends on smart policy interventions such as continued robust R&D investments, open borders for immigration, and continued opening of global markets. Alas, few of these items are high on the agenda of the current White House or Congress. Let’s hope that market trends are sufficiently strong to overcome the inertia of our current policy and political dysfunctions
A new assessment of the US’s independent workforce–The State of Independence in America 2017 from MBO Partners–was released this week. This is a very useful annual survey that is worth a look–however, I always recommend some caution when the actual core data is not shared with the public for further review and assessment. With that proviso in mind, the 2017 survey does include some interesting findings. The headline for me is that roughly 41 million Americans are now engaged in some kind of independent work. That figure represents 31% of the US private sector workforce, and includes folks from every demographic, income, and age category. The study offers a useful take on various types of independent workers,and finds that the number of reluctant independents (i.e. those who would prefer regular full time work) is declining thanks to an improving economy. This group now makes up about 24% of the independent workforce. The rising tide is also lifting the status of some full time independent workers. While the overall numbers of full time independent workers has dropped slightly, there was an uptick in the number of full time independents making more than $100,000 per year. This group grew by 4.9% last year, and now includes more than 3.2 million people. This MBO survey has been ongoing for several years now, and as the data piles up, we are getting some very useful insights on trends in the independent workforce. If you want to understand your local economy, you’ll need to understand this part of your workforce as well.