Articles written by Lou Glazer
There is a growing––but certainly not universal––understanding that the economic well being of the country and state are now highly dependent on the proportion of adults in the workforce with a college––particularly four year––degree. That human capital is the asset that matters most and is in the shortest supply for economic growth and prosperity.
And that a––if not the––key to rising college attainment rates is students from families where no adult has a college degree. So-called first generation students. Many will be minorities from lower income families. This is particularly true in a low education attainment state like Michigan where only 28% of adults have a four year degree or more.
Understanding that reality, the President and First Lady recently hosted a college access summit. Lawrence O’Donnell on his MSNBC show provided extensive coverage of the event. O’Donnell featured a young man growing up in New Orleans who couldn’t read at 14 but made it to Bard College and introduced the First Lady at the White House. Pretty amazing! You can watch here and here. Worth watching.
The New York Times previously published two columns from African American students who made it from central city schools to the Ivy League. You can read them here and here. Worth reading.
Travis Reginal in his Times piece wrote: “For low-income African-American youth, the issue is rooted in low expectations. There appear to be two extremes: just getting by or being the rare gifted student. Most don’t know what success looks like. Being at Yale has raised my awareness of the soft bigotry of elementary and high school teachers and administrators who expect no progress in their students. At Yale, the quality of your work must increase over the course of the term or your grade will decrease. It propelled me to work harder.” (Emphasis added.)
One of the commitments the White House announced at the summit is a partnership we have developed with Alma College. It will provide scholarships initially for qualified students from the DEPSA Early College of Excellence to Alma. Ultimately the hope is we can extend the program to qualified students in all of the Michigan Future Schools high schools. This will provide Detroit students at the MFS high schools with the ability to earn a degree at a high quality small private liberal arts college. Where there is growing evidence that first generation minority students have the greatest success in earning college degrees.
Clearly we need more colleges to step up as Alma is doing to the affordability challenges faced by many high school students. Better yet we need state policy makers to stop disinvesting in higher education. Increased public investment in higher education is the best way at scale to make college more affordable.
But as Travis Reginal writes we also need far more high schools to overcome the soft bigotry of low expectations, that is so endemic in many of our high schools, particularly in central cities and rural communities, that most of their students can’t succeed in college. At its core that is what the Michigan Future Schools initiative is all about. Investing in and working with new college prep high schools in the City of Detroit that are committed to all of their students (1) graduating from high school ready for admission to colleges like Alma and (2) ultimately earning a college degree.
Meeting that standard is hard work. No one across the country has gotten there yet. But there are urban high schools across the country that have made substantial progress. None of this is possible if those in charge don’t believe that all kids can earn a college degree (not that all kids need a college degree, but all deserve a k-12 education that gives them the opportunity to pursue a four year degree if that is what they want). Higher expectations and the accountability for educators that go with it are not only vital to the economic well being of the students but also to the economic well being of Michigan and the country.
1 Comment • Read this story »
Two terrific articles on the declining role of manufacturing in the American economy. One from Bloomberg Businssweek entitled Factory Jobs Are Gone. Get Over It. The other a Steve Rattner column for the New York Times entitled The Myth of Industrial Rebound.
Both clearly present the overwhelming data that manufacturing employment has been and will continue to be a smaller and smaller part of the American economy. And the unwillingness of elected officials of both parties to recognize this reality.
The fact that President Obama, Governor Snyder or any other national or state policy maker declare manufacturing a vital component of job creation and/or rebuilding the middle class won’t make it so. Globalization and technology–the drivers of the manufacturing decline–trump politics and policy. End of story!
The facts: As Businessweek writes:
Any attempt to draw lessons from the 1950s, when many a high school-educated (white, male) person got a job in a factory and joined the middle class, doesn’t account for the changes in the U.S. and global economy since the middle of the last century. While it’s smart to focus on creating more stable, remunerative jobs, few of them are likely to come from manufacturing. In 1953 manufacturing accounted for 28 percent of U.S. gross domestic product, according to the U.S. Bureau of Economic Analysis. By 1980 that had dropped to 20 percent, and it reached 12 percent in 2012. Over that time, U.S. GDP increased from $2.6 trillion to $15.5 trillion, which means that absolute manufacturing output more than tripled in 60 years. Those goods were produced by fewer people. According to the Bureau of Labor Statistics, the number of employees in manufacturing was 16 million in 1953 (about a third of total nonfarm employment), 19 million in 1980 (about a fifth of nonfarm employment), and 12 million in 2012 (about a tenth of nonfarm employment).
Rattner in addition to reviewing the data on job loss also deals with the new reality that blue collar factory jobs no longer pay high wages. And the combination of the two–fewer jobs and lower wages–make manufacturing not the path to rebuilding a mass middle class. He writes:
But we need to get real about the so-called renaissance, which has in reality been a trickle of jobs, often dependent on huge public subsidies. Most important, in order to compete with China and other low-wage countries, these new jobs offer less in health care, pension and benefits than industrial workers historically received. …
For all the hoopla, the United States has gained just 568,000 manufacturing positions since January 2010 — a small fraction of the nearly six million lost between 2000 and 2009. That’s a slower rate of recovery than for nonmanufacturing employment. “We find very little real evidence of a renaissance in U.S. manufacturing activity,” a recent Morgan Stanley report stated, echoing similar findings from Goldman Sachs. …
This disturbing trend (declining wages) is particularly pronounced in the automobile industry. When Volkswagen opened a plant in Chattanooga, Tenn., in 2011, the company was hailed for bringing around 2,000 fresh auto jobs to America. Little attention was paid to the fact that the beginning wage for assembly line workers was $14.50 per hour, about half of what traditional, unionized workers employed by General Motors or Ford received.
With benefits added in, those workers cost Volkswagen $27 per hour. Consider, though, that in Germany, the average autoworker earns $67 per hour. In effect, even factoring in future pay increases for the Chattanooga employees, Volkswagen has moved production from a high-wage country (Germany) to a low-wage country (the United States). (Emphasis added.)
As we explored in our latest report, rather than manufacturing, the key sector of both job and personal income growth (the two together create a mass middle class) in America going forward are knowledge-based services. That is where the combination of job growth and high wages have been, and almost certainly will continue to be, the strongest.
1 Comment • Read this story »
Click for full-size.
MSU economics professor Charles Ballard just gave a terrific presentation on the Michigan economy. Highly recommended!
Ballard’s main themes are:
- Michigan’s population decline has followed its economic decline
- Michigan has moved from being a high to low prosperity state
- The main causes of the decline are both the decline in manufacturing employment and Michigan’s standing as a low college attainment state in an economy where the premium for a college degree is rising
- Michigan policies have contributed to that decline by favoring tax cuts at the expense of higher education funding. Ballard writes: “At a time when education is so crucial to our future, Michigan has pursued a policy of systematic disinvestment in education.”
- The long run decline in Michigan has been accompanied by growing income inequality particularly for men without college degrees and African Americans.
The slide above, from Ballard’s presentation, clearly depicts the Michigan decline. In the Industrial Age (through the 1970s) when manufacturing matter most, Michigan was at least as prosperous as Massachusetts. But in an economy that is over the past three decades or more increasingly knowledge based, Massachusetts has soared while Michigan declined sharply. The main reason: Massachusetts is first in college attainment, Michigan is 35th.
No Comments • Read this story »
Had an opportunity to talk with the Ann Arbor City Council about the economic future of the city. (For an excellent summary of the session see this MLive article.)
My remarks and the conversation was mainly about retaining and attracting college educated Millennials. But we also had a chance to discuss Ann Arbor being part of the Detroit metropolitan area. To me these are the two keys to whether Ann Arbor really is an economic engine for the region and state that many believe it can and will be.
You need Ann Arbor to be a talent magnet plus the ability to draw talent from the much larger Detroit metro to have the human capital base that is needed to be an economic engine. The centerpiece of my talk to the City Council is that human capital now is the asset that matters most to economic growth. Companies–particularly private sector knowledge-based enterprises–are moving to where the talent is, rather than people moving to where the jobs are. And at the moment Ann Arbor does not have a large enough pool of talent to draw from to grow at scale a robust private sector.
As I have written previously Ann Arbor has for years pursued policies that are anti both population growth and particularly residential density. Of course, that is exactly the wrong approach if you want to attract young professionals. Who are increasingly choosing, after college and before kids, to live in high density, mixed used, walkable urban neighborhoods.
The result is that Ann Arbor is not doing particularly well at retaining and attracting young talent. From 2005-2012 the number of 25-34 year olds with a four year degree or more living in Ann Arbor stayed constant at about 16,000. This compares to a 17 percent increase in the cohort nationally. By contrast Madison, the most successful university-driven economy in the Great Lakes–has seen its young talent population grow since 2005 from 22,400 to 29,700. An increase of nearly 33 percent. To be an economic engine Ann Arbor needs to be as competitive as Madison in retaining and attracting young professionals.
An advantage that Ann Arbor has that Madison doesn’t is that it is part of a metropolitan area of about five million. Economies are regional, not state or local. This is an economy where big metros are winning largely because they are where talent is concentrating. You want and need access to the largest possible pool of human capital to recruit workers from to grow at scale private sector knowledge-based employers.
Unfortunately too many people–and leaders–in Ann Arbor want the city (and county) to not be considered part of metro Detroit. Big mistake! And to make matters worse the State of Michigan has just announced their take on regions and it separates Ann Arbor from metro Detroit. Even bigger mistake!
The State has put Ann Arbor in a region of Washtenaw, Livingston, Monroe, Lenawee, Jackson and Hillsdale counties. If this really were the region Ann Arbor/Washtenaw County employers were drawing workers from, its economy would be much smaller today and would experience slow growth going forward. Regions this small cannot take advantage of a major research university. Which, of course, is Ann Arbor’s main asset. (Think Champaign-Urbana.)
As I said to the City Council the most important ingredients to the future prosperity of Ann Arbor is if both Detroit and Ann Arbor become talent magnets. The two cities because of the preference college educated Millennials have for central city living. If they aren’t attracting young talent Ann Arbor and metro Detroit (including Ann Arbor) are going to have a hard time developing the talent pool necessary to participate at scale in the growing, high wage knowledge economy.
2 Comments • Read this story »
Conventional wisdom seems to be that a generous safety net reduces the number of people that work. The thinking goes if you pay people enough not to work, they won’t seek and find work. Acting on those beliefs, Michigan, particularly in the last three years, has slashed the state’s main safety net programs: cash benefits, food stamps and unemployment insurance.
Those cuts have made life more difficult for low income Michiganders. What it hasn’t done is increased the proportion of Michiganders with a job. As we explored previously from the month before the Great Recession began (November 2007) through November 2013 the employment-to-population ratio in Michigan has fallen from 59.8 percent to 54.8 percent. If Michigan had the same proportion of adults working today as six years ago there would be 392,000 more working Michiganders today. Only seven states have lower employment-to population ratios. So much for slashing the safety net leading to more Michiganders working.
Minnesota, the Great Lakes state with the best economic outcomes, has a much more generous safety net than Michigan. For example they provide up to 26 weeks in unemployment benefits at a maximum of $610 per week compared to 20 weeks and $362 in Michigan. TANF benefits for a single parent family of three in Minnesota is $532 per month with a 60 month lifetime limit compared to $492 and 48 months in Michigan.
Minnesota’s employment-to-populatio ratio has fallen far less than Michigan’s over the past six years. Declining from 68.7 percent to 66.8. If the same proportion of Michiganders were working today as Minnesotans there would be 941,000 more Michiganders working today. Only three state have a higher employment-to population ratio. So much for Minnesota’s more generous safety net keeping people from working.
No Comments • Read this story »
Grand Rapids Mayor George Heartwell’s latest State of the City Address is terrific. Worth reading. It lays out an agenda for making Grand Rapids a place where people from across the planet want to live and work. Its an agenda that other Michigan cities should want to adopt as their own. And the state too.
Heartwell begins his agenda with Champion of Diversity. With an emphasis on friendly to immigrants. He says: “Immigration is crucial to our economy and immigration is a bedrock principle of our American life. We have always been a people who throw our arms wide in welcome.”
Then talent. He says: “Talent comes in all shapes and forms and colors and ethnicities. It is home grown and it finds its way here from someplace else. It is the young entrepreneur and the seasoned research scientist; the designer, the architect, the programmer, the doctor, the professor. In a knowledge economy such as ours talent is wealth. The cities that retain and attract talent are winning; the others are losing. … Talent today is measured in post-secondary degree attainment. We must do better.” (Emphasis added.)
Exactly! His formula: better schools from early childhood on and, because talent is increasingly mobile, retaining talent after they graduate from college. He recognizes that the provision of quality basic services and amenities are crucial to retaining and attracting residents. Specifically he speaks of the importance of parks; roads; transit (including considering street cars!); biking and walking friendly and street lighting.
On all these issues the city is hindered by state policy. The Mayor emphasized the Legislature’s unwillingness to increase transportation funding. Which matters a lot, but so does a decade or more of revenue sharing and education (particularly higher education) cuts. And an ambivalence, at best, about being welcoming to all (including, but not limited to, immigrants).
We need state, regional and city policy across the state that starts with as the Mayor puts it: “In a knowledge economy such as ours talent is wealth.” That is the starting point of constructing an agenda that will put Michigan back on the path to prosperity. Because unless we increase the education level of those who choose to live and work here we are going to be one of America’s poorest states.
No Comments • Read this story »
At the core of Michigan Future’s work has been the belief that globalization and technology are mega forces that are and will continue to transform the economy. And that both are more powerful by orders of magnitude than policy or politics. That means, as we explored previously, that more and more work that humans have done in the past––at all skill levels––are going to become obsolete.
In a terrific article for Wired Kevin Kelly details the extent that machines are likely to destroy current jobs/occupations. The article is entitled Better Than Human: Why Robots Will — And Must — Take Our Jobs. Kelly writes:
It may be hard to believe, but before the end of this century, 70 percent of today’s occupations will likewise be replaced by automation. Yes, dear reader, even you will have your job taken away by machines. In other words, robot replacement is just a matter of time. This upheaval is being led by a second wave of automation, one that is centered on artificial cognition, cheap sensors, machine learning, and distributed smarts. This deep automation will touch all jobs, from manual labor to knowledge work.
Kelly is an optimist in terms of what this means for humans. That we will dream up new, more rewarding and higher paid work for humans to do. He writes:
This is not a race against the machines. If we race against them, we lose. This is a race with the machines. You’ll be paid in the future based on how well you work with robots. Ninety percent of your coworkers will be unseen machines. Most of what you do will not be possible without them. And there will be a blurry line between what you do and what they do. You might no longer think of it as a job, at least at first, because anything that seems like drudgery will be done by robots.
We need to let robots take over. They will do jobs we have been doing, and do them much better than we can. They will do jobs we can’t do at all. They will do jobs we never imagined even needed to be done. And they will help us discover new jobs for ourselves, new tasks that expand who we are. They will let us focus on becoming more human than we were.
Others are not so sure. Predicting a future with fewer and lower paying jobs. No one really knows whether the economy will produce enough new jobs to replace those that have been automated away.
What is clear is that how we construct a successful career will look, for nearly all of us, a lot more like rock climbing than ladder climbing. There will be fewer and fewer career ladders where there are linear, known steps up that allow one to be prosperous over a long career. Rather those that succeed will be able to identify both the challenges and opportunities brought on by constantly smarter machines and have the agility and skills to take advantage of new opportunities.
2 Comments • Read this story »