Section » Michigan Talent
It’s the Neighborhood
Lots of comments on the Andy Basile email I wrote about in my last post. Most quite positive. A few pushed back. Let me lay out my thoughts on why I thought the email was so important and then give my take on some of the push back.
At the core Basile – a private sector knowledge-based employer – affirms two central beliefs of ours: 1. That it is talent – not taxes or big government – that matters most to enterprise success. 2. That talent is so important and in such short supply that knowledge-based employers will move to where the talent is rather than the other way around. Conventional wisdom is people move to where the jobs are. In a knowledge-based economy there is growing evidence that enterprises move to where talent is concentrated.
Unless we get thought leaders and policy makers to understand both we have little chance of getting our agenda debated, let alone enacted. And the best way to get them accepted is from employers. What is so unique about the Basile email is that he put what many employers have said to me over the years off the record in writing and then allowed me to distribute widely what he wrote.
That brings me to the push back. Two main items
1. The firm should be in Detroit. Obviously I would prefer that it be in the city. But I do not believe if it were that it would change their recruitment challenge. Are there a small number of young professionals that won’t take a job unless they can walk or bike to it, probably yes. But not at any scale. So I don’t think where a firm is located has much to do with the ability to attract talent. Before the Great Recession I heard the same story for years from knowledge-based enterprises in the city. Available jobs, not enough qualified applicants, applicants not wanting to live/work in the region. Microsoft, along with many Seattle knowledge-based employers are in the suburbs. The outbound commute in Seattle is as crowed as the inbound commute. The notion that the company has to be in the city (or walkable suburb) to be attractive to young professionals does not appear to be the pattern across the country. Central cities are increasingly the new bedroom suburbs where a segment of talent wants to live, not necessarily work. That is what is missing here – vibrant neighborhoods where talent wants to live, not work – plus the ability to commute by rail.
2. If they would market our assets better talent will come. This is the one critique I didn’t expect. That some of us believe that we have a competitive quality of place today. Should our firms do a better job selling the city/region to their recruits? Absolutely. I’m convinced most employers don’t know the assets to showcase. But if they did would it change at any scale talent’s willingness to move here? Highly unlikely. I agree with Basile when he writes “We don’t have a perception problem, we have a reality problem.” We have a region, in Chris Leinberger’s terminology, which is dominated by driveable suburbanism, not walkable urbanism, in a market where an increasing proportion of mobile talent wants/demands walkable urbanism.
No Talent, Jobs Go Elsewhere
About a month ago I received an e mail with the title “Why our growing firm may have to leave Michigan” (you can and should read it here). I assumed that it would be about taxes and/or business costs are too high. Boy was I wrong! It is from a law firm that cannot fill available high paid jobs because no one wants to live in metro Detroit. It is simply the best statement of our case that talent is driving the economy and that place matters that I have seen.
Before the Great Recession I heard this same story over and over again from knowledge-based employers across the state. This is the first time one of them has put it in writing. Of course, the conventional wisdom still is this cannot happen. People go to where the jobs are. Fix the cost of doing business in Michigan and jobs will blossom, talent will rush here and we will be prosperous again. As Mr. Basile writes that ain’t the way the world works today.
He writes: We’d like to stay in Michigan, but we have a problem. It’s not taxes or regulations. There’s lots of talk about these issues but they have no impact on our business. We spend more on copiers and toner than we do on state taxes. Our problem is access to talent. We have high-paying positions open for patent attorneys in the software and semiconductor space. Even though it is one of the best hiring environments for IP firms in 40 years, we cannot fill these positions. Most qualified candidates live out of state and simply will not move here, even though they are willing to relocate to other cities. … There’s a simple reason why many people don’t want to live here: it’s an unpleasant place because most of it is visually unattractive and because it is lacking in quality living options other than tract suburbia. Some might call this poor “quality of life.” A better term might be poor “quality of place.” In Metro Detroit, we have built a very bad physical place. We don’t have charming, vibrant cities and we don’t have open space.
Quality of place matters. We need to keep pushing to get this at the top of the state’s economic growth agenda.
Cost of Living?
One of the questions I get most often during my presentations is “what about the cost of living?”. Aren’t most of the high prosperity big metros in the country – where the knowledge economy is increasingly centered – places with very high cost of living? It is true we don’t correct income for cost of living differentials. Here is why.
It is only one half of the equation. The other half is what you get for your money. If costs were all the mattered we would all drive a Hyundai and none of us a Lexus. We start with a belief that consumers are rational, not dupes. They don’t over pay for housing or other basics when they choose a place to live and work. When they pay more they calculate what they are getting for their money.
So that fact that housing costs in Michigan are far less than in Chicago and Manhattan doesn’t stop many of our recent college graduates from going to those vibrant cities. Why? Because they are buying the neighborhood, not just the housing. Central Park is worth something as is the access to world class arts, culture and night life. It is no different than middle class families with children paying more for the same house in a community with better schools.
So the places with the highest per capita income are the most prosperous places in the country. And what most distinguishes them is that they have a high proportion of their residents with a four year degree or more. They are places where increasingly mobile talent chooses to live and work. You want to be one of those places! Michigan’s challenge is none of our big metros are any where near the top of list. Metro Detroit is 37th and metro Grand Rapids 45th in the proportion of adults with a four year degree out of 55 regions with populations of one million or more.
Young Talent Leaving Michigan
A couple of interesting articles about young talent leaving Michigan. Both worth reading. The first from the Spinal Column covering west Oakland County. I’m interviewed, but what is most interesting is the insights of recent college grads on why they stayed or didn’t. Both jobs/careers and place sure seem to matter. The endless debate we have on which matters more probably is a waste of time. Both matter.
The second is really interesting. It is from Concentrate Media which covers Ann Arbor online. The article is written by Kate Rose who has been a regular contributor singing the praises of Ann Arbor and Michigan as a great place to live and work. But now she has moved to California and she writes about why. It is quite insightful on what Ann Arbor has to offer and what it is lacking. Her agenda for Ann Arbor:
1. Job diversification. I didn’t want to “dump” Michigan. It had so many qualities that I was looking for in a homebase — save one. Selfishly, that turned out to be my career growth. As Gen Y’ers figure out their next career moves, we need to encourage a range of businesses with an enticing array of jobs. Easier said than done, but if this is a wish list, economic livelihood tops it.
2. A dynamic downtown. We lack discovery of new places, and I don’t think the fact that Ann Arbor’s a small town is an excuse. Give us something to explore and keep the chains out. Create more opportunities for innovative and surprising businesses, organizations, events, and entertainment to take root. If Ypsi can hold a puppet-hosted mayoral debate, surely A2 can too.
3. Knock off the “Us vs. Them” development wars. Before I left, I participated in a few meetings where young people discussed development issues coming before council. The tone was hopeful, but felt combative. The general sentiment was that older residents liked how things were, just as they are, and had the time and resources to fight like hell to keep it that way. We need to open the discussion — that’s right, “discussion’, not “argument’. A stronger acknowledgment from city government that young professionals’ interests are being considered would be a welcome start.
Good advice. Jobs and place. Both matter.
Place Comes First
Place trumps everything. Among my college educated friends who have yet to start families, they’d sooner move (and many have) to an exciting or beautiful place without a job prospect, than to stay in or move to Southeast Michigan with an excellent job offer. While there are exceptions, my husband and I included, the overarching trend has been to join the mass exodus to Chicago, New York, Seattle, the Bay Area and the outdoor lovers to Colorado and Salt Lake City. What do we 20 and 30 somethings want in a place? We’re shedding the oppressively dull and uncreative suburban lifestyle of our parents for the vibrant cities where creativity and culture in all its forms flourish. We undeniably value walkable cities, where cars are convenient, but not necessary; where the cultural and social options are so plentiful, you’re forced to be selective in your spare-time pursuits; where the community of energetic forward thinking entrepreneurs and intellectuals is so vast, that new exciting relationships continuously materialize. Despite the spread of technology, personal laptops and email notifications going off in our pockets and purses, we do not want to be physically isolated, living miles from our like-minded peers. We want to be tangibly connected to the world around us. Perhaps as our work days are increasingly isolated in a world of technology, we find ourselves developing an insatiable craving for the jostling excitement of a concentrated population of young movers and shakers.
The Challenges of Adult Training
Kudos to the Lansing State Journal and Detroit News for in depth articles on the performance of Michigan’s adult training system. ( You can find the Journal’s article here and the News’ lead article here.) The News focused on the No Worker Left Behind program and its, at best, mixed results. While the Journal takes a more comprehensive look at the whole system from adult ed provided by k-12 districts through post secondary training through the Michigan Works! agencies and community colleges. The bottom line is that the system leaves lots of adults without the skills they need for the labor market of today and tomorrow.
For many training is the answer to the challenges raised in my last two posts: non college educated men falling behind and the gap between the skills needed for today’s factory jobs and the skills of applicants for those jobs. Both are consequences of the new reality that more and more of the work that required primarily muscle is now either done overseas or by machines. But the country – not just Michigan – does not have a very good record of taking people who have done lower skilled jobs and preparing them at scale for jobs that require higher skills. And an even worse track record with those who have been chronically unemployed, no matter how strong the economy.
It is unrealistic to ask training institutions to solve all the challenges of the economy. Training will not lead to jobs that don’t exist. So when the macro economy is weak holding training institutions accountable for placements is not fair. What is fair is holding them accountable for whether their students have gained the skills needed to get jobs – particularly decent paying jobs – when the economy starts to grow again. Nor can training institutions overcome the resistance of many to get training. Whether its not accepting the need to learn new skills, not wanting to participate in training or needing work now so one doesn’t have the time to get new skills there are all sorts of reasons adults don’t sign up for training.
But for those who do enroll for addition training, the system needs to do better. As we have written before, far too many participants don’t get the skills they need. Far too many end up in remedial programming and never make it to classes where they can learn new occupational skills. And many who do make it to occupational training, don’t get the skills/credentials needed to get employed in the occupation.
As the Detroit News pointed out the problem is particularly acute for many private adult training institutions. The privates are far more expensive for taxpayers and students with a worse track record of student success compared to community colleges. Quite troubling!
Figuring out how to get the system to get better student outcomes should be a priority. It is about more than just adequate funding for training. We need to admit that we don’t really know how to get better outcomes at scale and encourage lots of experimentation combined with clear outcome standards.
Ficano on Transit
Great editorial from Wayne County Executive Robert Ficano for One D on transit. Ficano makes the case that rail transit is a key ingredient metro Detroit needs to retain and attract young professionals. Based in part on a recent charrette of University of Michigan students who were asked “if you could start from scratch, what would you do to improve this region and make it more attractive?” The priority was transit.
This is consistent with my experience with young professionals and college students across the state. I have never been in a discussion about their priority list for Michigan that does not have transit at or near the top. This is a generation where many would like to live without a car. So for many their decision on where to live and work after college includes having great transit. It’s a common feature of many of the cities that are young talent magnets.
Ficano understands this. Transit – particularly rail – is about more than just moving people. It is a economic growth priority. Because where those University of Michigan charrette participants choose to live and work after college will have a lot to do in determining which region are prosperous in the future and which aren’t.
Unfortunately his priority for transit seems not to shared by the Oakland County Executive and Chairman of the Macomb County Commission both of whom wrote editorials for One D on transit as well. (You can find them here.) It’s clear that the historic concerns that haven’t prevented metro Detroit from getting a high quality rail system still exist. Do we really need rail? Can we afford it? Etc.
Ficano is right. As region after region across the country understands, transit is a key ingredient in growing the economy. We cannot afford not to have transit. It’s that important!
Ann Arbor II
Lot of reaction to my post on Ann Arbor’s anti-density development policies. One theme is Ann Arbor can’t be Madison mainly because they are the state capitol and have the two lakes. No question Madison has some assets that Ann Arbor can not replicate. One can argue it’s why they are a city nearly twice as populous. I think it’s harder to argue those unique assets are the reason why the proportion of young professional households in Madison is more than 50 percent greater than Ann Arbor. Ann Arbor needs to go from 8,000 to 13,000 young professional households (2006 data) to have the same proportion as Madison.
I believe that the University of Michigan is a better asset than UW Madison. By creating a quality of place that is more attractive place to live they have leveraged their assets better than Ann Arbor.
We use Madison as a comparison for both Ann Arbor and Lansing/East Lansing both because of the major research university and to take cold weather off the table. Lots of folks think Michigan can’t compete for talent because of the weather, don’t believe it. But in terms of development policy a better model is Portland, Oregon. They have developed the playbook for land use.
Their four decade long strategy has three anchors: a greenbelt to control sprawl, a high density/walkable central city (particularly in their downtown and near downtown neighborhoods) and transit. The result: a city that is both regularly rated one of the “greenest” in the country and a talent magnet. (See this Wall Street Journal article on Portland still attracting young talent even in a down economy. It’s not just jobs that attract mobile talent!)
In environmentally conscious Portland you see high density (yes even tall buildings) development everywhere in and around the downtown. They understand if you want both to be kind to the environment and economic growth the recipe is to limit low density suburban/exurban growth and encourage a high density central city. It’s the way to get folks out of cars and to make transit (particularly rail) financially feasible.
Ann Arbor seems to have convinced itself that it’s good for the environment to restrict growth both outside the city and in the city. But then the only way you can grow is if new workers demanded by new and growing enterprises live further and further away from the city. Which means longer commutes all by car. So much for being kind to the environment.
That assumes that new workers want (or will accept to get the job) to live further and further away from the city. The evidence is an increasing proportion of college educated adults – the workers most needed by the knowledge-based enterprises that Ann Arbor wants to attract – don’t want/won’t accept that kind of low density/long commute living. The trend nationally – that Brookings has labeled bright flight – is a preference for central city living, particularly in high density, mixed use, walkable neighborhoods with transit. That is why vibrant, dense central central city neighborhoods is central to economic growth. Without a larger pool of talent Ann Arbor won’t get the economic growth it wants.
• Copyright 2009 • Twitter: #michiganfuture