An interesting new article in Strategy+Business examines another potential downside of the gig economy. It seems that many business sectors operate with business models that are not well suited to the independent workforce. The article examines recent trends in the trucking industry, where annual turnover exceeds a whopping 81 percent! Why are so many truckers leaving their positions? Because their jobs often suck! Some trucking firms have embraced the independent workforce because it allows them to pay less, ask for more work, and avoid cost burdens like retirement or health care benefits. But, as the high turnover rates suggest, there is no free lunch and many truckers have had enough. The gig economy can generate many benefits for firms and for workers, but there needs to be a fair exchange as well.
The trucking industry is something of a canary in a coal mine. You can see similar challenges emerging in other sectors, especially in manufacturing where the independent workforce accounts for more than 20% of all workers. We often hear employers complain of skill shortages that make it tough to fill jobs. However, in some cases, these production jobs are tough to fill because they offer low pay, few benefits, and limited career advancement options. Check out the latest issue of Business Week to see some of the safety issues around new auto manufacturing jobs. Independent work can be a boon for all—it provides flexibility for workers and for companies. But, it can’t be an excuse for exploitation. If we want this new way of working to succeed, companies and industries will need to devise new business models that offer a better deal to independent workers.
If you plan on attending next week’s National Association of Workforce Boards conference, I hope to see you here in Washington DC. I’ll be participating in the entire event and will also be chairing a panel. On Monday, March 27th at 4:00 PM, I’ll be part of a panel with my colleagues John Beatty (MassDevelopment), Dan Glasson (the Pentagon’s Office of Economic Adjustment), and Sarah Tennant (Macomb-St. Clair Michigan Works). We’ll be discussing the challenges (and potential solutions) facing small and medium sized defense manufacturers as they face defense contract cutbacks and shift to entering to new commercial markets at home and abroad. They face many of the same challenges affecting all manufacturers, but these pressures can be even more intense due to the unique circumstances around defense contracting work. Come join us to learn how community leaders in Massachusetts, Michigan, and around the US are helping these companies.
This is late notice, but I encourage you to sign up for a webinar later today on the topic of building entrepreneurial ecosystems in small and rural communities. I’ll be presenting along with my colleague Maria Meyers of SourceLink. The webinar is sponsored by the International Economic Development Council and is part of their regular series on community disaster preparedness and economic recovery. The webinar occurs today, March 21, 2017, from 2:30 to 4:00 PM Eastern Time. You can learn more and sign up here.
I’ve got a new article on the the economic transition in America’s coal regions in the latest issue (Winter 2017) of the International Economic Development Council’s Economic Development Journal. The article highlights the great progress being made in many coal regions, as well as the critical importance of at-risk Federal programs like the Appalachian Regional Commission and the Economic Development Administration. The article requires registration or IEDC membership for access. If you’re interested in a copy, send me a note and I’ll get it to you directly, too.
On a related note, the National Association of Counties and the National Association of Development Organizations are sponsoring a regional forum for coal-impacted communities in Colorado, Montana, Utah and Wyoming. This event, to be held in Denver from April 19-21, is designed to help community teams begin developing local strategies for economic diversification. It’s a great opportunity to learn from peers and leading experts and to hear from communities that have succeeded in transitioning their economies from reliance on a single industry or resource. You can learn more and sign up here.
If you want to learn the latest and greatest about what’s happening in the world of entrepreneurship, you still have time to book your flight to Johannesburg, South Africa for the Global Entrepreneurship Congress, to be held from March 13-16, 2017. These Congresses began nine years ago, and have since been held around the globe. This is the first time that GEC has come to Africa–a recognition of the start-up boom that is ongoing across the Continent. A big show, with thousands of attendees from more than 100 nations, is expected. The South African host delegation has produced an excellent video on South African entrepreneurs to help introduce the event. The agenda is chock-full of great speakers and cutting edge research, and I’ll be providing updates on this front in future blogs. And, if you can’t make it to Johannesburg, plan on attending GEC 2018, which will be held in Istanbul in March 2018.
This blog post summarizes a few recent research reports that contain some interesting findings (to me, at least) but have not received a lot of coverage in the more popular blogs and e-newsletters floating around the internet. Happy reading and researching!!
Do Self-Employment Assistance Programs Work? A new Mathematica Policy research paper takes a deep look at the US Labor Department’s Self-Employment Assistance (SEA) programs. These efforts began in the 1990s as a pilot project that allowed unemployed workers to use their unemployment insurance (UI) funds to pursue self-employment opportunities. This was a big shift in UI policy as recipients are typically required to pursue training or to be engaged in active job searches. How has the SEA effort worked? To date, the results are somewhat mixed and uncertain due to data limitations. However, a few findings stand out. Very few unemployed people—far less than 1%– opted to use the program. In this group, SEA program participants tend to receive more UI benefits and have lower wages than comparable UI recipients. Only about 1/3 of participants started a business in the first quarter of receiving SEA benefits, but 40% of those who started companies were still in business at the end of the year. A few states linked SEA to other training and support services. This help seems to improve business outcomes, but is typically not a required part of the program due to budget limitations. These early findings suggest that self-employment programs can work in helping the unemployed pursue entrepreneurship. However, these programs often require added investments and consulting services that may not always be readily available due to budget constraints.
How Much Demand for Middle Skill Jobs? We’ve all read numerous articles outlining the boom in demand for middle skills jobs, i.e. occupations that require an associate’s degree or other training short of a four-year college degree. A new Federal Reserve research paper examines the details on market demand for middle skill level workers. It finds that demand levels vary greatly by geography. In dense metropolitan areas with high numbers of college graduates, employers are much more likely to require a college degree as a prerequisite for middle skill level jobs. In rural regions, the demand for college level training is less common. To give one specific example of potential “requirements inflation,” Seattle-based employers are 21% more likely to require a college degree for retail supervisor jobs than employers found elsewhere in the US. These results suggest that middle skill workers may face more economic mobility challenges if they live in metropolitan areas where training requirements for middle skill jobs are more stringent.
States and the Gig Economy: Observers have long noted that state and local governments are “laboratories of democracy” that test new policy ideas and approaches that might not fly in Washington. A new Stateline analysis examines how states are considering new ways to provide benefits to gig or independent economy workers. A newly proposed bill in Washington State would require companies like Uber, Etsy, and Lyft to make contributions into an independent fund that would then be used to pay for health insurance and other benefits for their contractors. Much recent legislation has focused on benefits for free lancers; this proposal is one of the first to look at new ways to provide a social safety net for those involved in the platform economy.
Work took me to West Virginia yesterday, and along the way, I was introduced to a great website, Try This West Virginia, that has been running for about a year but that was new (and exciting) to me. Try This West Virginia lists dozens of ideas for how to build healthy communities. It is focused on fitness and personal health—big issues in West Virginia and across the US—but it about much more than that. It provides cheap, relatively easy, and actionable things that anybody can do to make their community a better place. This is wonderful set of tools for communities and citizens who don’t know where to get started on the journey to transform and improve where they live. If you’re stumped for ideas, try something like this: Start a bike club; Advocate for daily recess in the schools; Create a regular community conversation or Open up access to local lakes, rivers or waterways. These are all ideas that you can find at this site, and none of them are unique to West Virginia. So, if you’re looking for good community building ideas, don’t forget Try This West Virginia.
The latest issue of our quarterly e-newsletter, EntreWorks Insights, is now available. You can access it here and subscribe here. This issue assesses what might–and what should–happen with manufacturing policy under the new Trump Administration.
Last week, I participated in the always excellent New Partners for Smart Growth conference held in St. Louis. This was a great event, but even better, I was able to get engaged with the folks behind a new podcast called Infinite Earth Radio. The podcast is “dedicated to spreading ideas about how to lift up and revitalize marginalized communities by focusing on building human and social capital in a way that respects the earth we live on.” I had the pleasure of participating in a podcast focused on the important topic of “Entrepreneurship and Place-Based Economic Development.” You can access my podcast here, and you can subscribe to the podcast here. This is an excellent podcast that is well worth your time on a regular basis.
This week I will be heading out to Shepherdstown, WV, to be one of the trainers in a very interesting program sponsored by The Conservation Fund. Balancing Nature and Commerce in Rural Communities and Landscapes is a training program designed for community leaders who are pursuing economic development opportunities that align with and support their region’s scenic, natural, and recreational assets. The program has been underway for several years, and this year’s program includes teams from Georgia, Maine, Michigan, Nevada, and Pennsylvania. I learn a great deal at these events as the teams are among the nation’s leaders in promoting new thinking about rural economic development. They are part of burgeoning movement that is seeking to use natural assets as a driver of rural prosperity. Lots of great new information seems to be coming out nearly every day. For example, check out this piece on small town trail development. While it’s too late to apply for this week’s event, you can learn more about the program and (hopefully) its future iterations here.