Month: September 2015

The Next Big Thing in Local Government

Local governments in Ashtabula County will need to do more in terms of collaboration, shared services, and innovation in the future to survive.Local schools must do the same.

As Robert O’Neill writes in this Governing Magazine article, many challenges lie ahead. Cities and counties will need to collaborate and innovate as never before.

By | September 25, 2015, Governing Magazine
Where is local government going? In an era of tumultuous change and declining trust in government, cities and counties face major attitudinal and demographic forces, including competition for resources devoted to the “graying” and the “browning” of America and population and generational changes in government workforces. And there’s another, perhaps overarching, challenge: the difficulty taxpayers have in thinking about government as experimental when experimental thinking will be exactly what will be needed in the coming decades.

Certainly challenges like those — not to mention those as yet unforeseen — are going to do much to shape the future direction of local government. They were among the forces identified by a panel of experts in a recent live-streamed discussion I moderated. Co-sponsored by the International City/County Management Association (ICMA) and the Alliance for Innovation (AFI), the webcast was part of a larger “Next Big Thing” project sponsored by AFI.

So what will be the next big thing? There were plenty of ideas among the panelists: Arlington County, Va., Assistant County Manager Shannon Flanagan-Watson; John Nalbandian, a professor emeritus at the University of Kansas; Austin, Texas, City Manager Marc Ott; and Rebecca Ryan, a futurist and founder of Next Generation Consulting. Here are some of their thoughts:

Collaboration: We will see a merging of the public, nonprofit and private sectors, blending public purpose with private capital to address a number of public-service-provision challenges. We also will use innovative financing and public-private partnerships to help public agencies amortize the cost of infrastructure operations and management. When Denver looked for ways to fund the last bit of its high-speed rail system, for example, the city involved investors from Spain in a nuanced and complex financing deal. Agreements such as these will require local governments to develop a new set of navigational management skills.

Technology and citizens: Much will turn on whether and how cities and counties and the people they serve use sensors, data, networking and other technological infrastructure to become “smart” jurisdictions, and how they leverage that technology to better engage their residents. In Sweden and some parts of the United States, for example, local governments have successfully combined technology and resident engagement to forge a framework for change driven far more than ever before by citizen input.

None of these efforts can succeed without the appropriate balance of high tech and high touch. Arlington County, for example, tries to equalize the two by leveraging crowdsourcing and other tools to engage residents and the business community in an ongoing conversation with their local government. And while local governments are improving opportunities to inform people and solicit opinions, there are few forums in which a resident, business leader or elected official praises someone else’s good idea. We do a great job of soliciting various viewpoints, but we need to focus on elevating the dialogue.

Closing the gaps: The gap between the haves and the have-nots — and whether that gap becomes a structural impediment to participation in the 21st-century economy for large segments of the population — will continue to be a major driver of local government. An unforeseen consequence of community growth and development is the broadening of the divide to the point at which “affordability” has become a major campaign issue for elected officials in cities such as Austin.

A different but equally important gap is the space between what is politically acceptable and administratively sustainable — that space dividing what local governments wish to accomplish from what will work and what is politically possible. As that gap continues to grow, it becomes more difficult to achieve results that matter.

Resiliency: This concept, a fairly new public-sector mindset that is essential to our continued success and future partnerships, is seldom taught in public-administration classes. Resiliency is not only about the ability to bounce back from disasters, whether natural or human-caused, but to be proactive about analyzing risk before bad things happen so that we can bounce back better than before. While social cohesion is a critical factor for resilient communities, identity politics and the wavering of trust in the public sector are major impediments to achieving this important goal.

All of these have one thing in common: the continuing need for government to be innovative. Today’s rigid structures and jurisdictional branding — which reward distinction and, consequently, competition rather than collaboration — make it difficult to leap beyond our current boundaries to achieve successful regional and multi-sector innovation. Overcoming that difficulty may be the toughest challenge of all.

At the ICMA annual conference getting underway Sunday in Seattle, AFI will release a report based on Rebecca Ryan’s research and the “Four Forces” model developed by Cecily Sommers, which explores in more depth the question of what lies ahead for local government. To learn more, visit ICMA’s “Next Big Thing” webpage, where you can view the webcast and where the AFI report will be posted.

Dealing with the Youth Disconnect

LAYING THE GROUNDWORK FOR SOCIAL CHANGE

Phoenix: Policymakers and Educators Tackle Youth Disconnection

An article in the Arizona Republic based on Measure of America’s One in Seven report galvanized efforts in Phoenix, Arizona, to reengage disconnected youth. Beginning with several summits convened by the Maricopa County Education Service Agency in 2014, leaders from local government, educators, and philathropists have come together in order to raise significant funding and coordinate their responses to the high levels of youth disconnection in Phoenix.

Efforts of Starbucks CEO Howard Schultz & 100,000 Opportunities Initiative Informed by MOA Analysis

This summer, Howard and Sheri Schultz coauthored an op-ed in the New York Times announcing the launch of the 100,000 Opportunities Initiative, a coalition of over thirty leading US companies “committed to training and hiring 100,000 Americans between the ages of 16 and 24 who are out of school and not working.” Their op-ed relies on Measure of America’s benchmarking research on youth disconnection to frame their goal. With their dedication, the investment of $30 million of their family foundation’s capital, and the coalition they have rallied around the issue, real progress is possible.

Measure of America’s high-level analysis of the systemic problem of youth disconnection helps to frame priorities, but we don’t stop there. Built on the localized analysis we’ve performed, the 100,000 Opportunities Initiative has begun to focus its energies in a metropolitan area especially hard-hit by youth disconnection: Phoenix, Arizona.

Plain Dealer: Ohio’s Middle Class Continues to Struggle

Cleveland Plain Dealer
CLEVELAND, Ohio – Ohio hasn’t completely bounced back from the recession.

We’re not talking about only the Great Recession, but also the one in the early 2000s.

Analyses of several economic statistics — from income to number of jobs to labor-force participation rates —show that the year 2000 was a high-water mark to which Ohio has yet to return in the 21st Century, experts say.

As a result, middle- and working-class Ohioans have taken a battering ever since then.

“Ohio has borne the brunt of the weakening middle class for the past 30 years, and especially the past 15,” said Brendan Duke, policy analyst at the Center for American Progress in Washington, D.C., a liberal educational institute funded primarily by donations.

Take median household income, for example. In 2000, median household income in Ohio was $58,115, but by 2013, it had dropped to $46,398, according to Duke’s analysis of Census data. (All figures are in 2013 dollars.) That was a 20.5 percent drop. Only four other states – North Carolina, Michigan, Delaware and Nevada – had greater percentage drops in income during that period.

Duke’s analysis doesn’t include 2014 figures because it was done before the Census Bureau released those numbers last week. Because of a redesign, some income data is not directly comparable; so an update of his analysis was not immediately available. However, he said an additional year of data would not change the more than decade-long trend.

Median household income in the United States fell from $56,860 to $51,939 between 2000 and 2013, Duke found. His analysis showed that household income in Ohio was $1,255 higher than the national median in 2000. By 2013, it had plummeted to $5,541 below the national median. Ohio was still playing catch up even shortly before the Great Recession began in December 2007. By then, such income had only reached $55,162. (The recession ended in June 2009.)

“Median household income in Ohio didn’t even recover back to its 2000 level before the Great Recession,” Duke said. “What you see nationally is that the U.S. had hit its 2000 level once again by 2007.”

Duke’s analysis of Labor Department data on median wages show a similar trend. Ohio workers have experienced declining pay and the Buckeye state lags the nation’s median wage, though the gaps tend not to be as wide as with household income.

Median wages in Ohio fell from $36,101 in 2001 to $34,250 in 2014. (Figures are in 2014 dollars.) That 5.1 percent drop ranked Ohio 48th of 50 states. Only Idaho and Michigan saw steeper declines.

Nationally, wages fell only 0.15 percent during the time period to $35,004. As with household income, Ohio had a higher median wage than that of the nation in 2000 — by nearly $1,000. By 2007, Ohio was about $800 short of returning to the state’s 2000 median, while the nation’s median was slightly higher than where it had been before the 2001 recession. By 2014, Ohio was trailing the state’s 2000 median by more than $1,800 and was nearly $500 below that of the nation.

Veronica Kalich, who chairs the economics department at Baldwin Wallace University, said Ohioans would have found it even more difficult to have dealt with these steep income declines amid rapidly rising inflation.

But “inflation is very low,” she said. “People will find that they have more money in their pockets even with a change in income.”

Fewer Jobs

Ohio has yet to recover all the jobs lost since both recessions. Employment in the state is still down 42,000, or by 0.8 percent, since the Great Recession, according to George Zeller of Cleveland, an economic research analyst. He starts counting from March 2006, which was the state’s pre-recession employment peak.

He said Ohio lost 225,100 jobs, or 4.0 percent, from 2000 to 2015, which have still not been recovered. The nation already has recovered the jobs lost stemming from both recessions.

Ohio’s struggle to recover these lost jobs has had a bearing on wages, said Greg Lawson, policy analyst at the Buckeye Institute for Public Policy Solutions, a conservative advocacy group or think tank that is part of the State Policy Network seeking to set policy debate.

“Ohio lost more private sector jobs than any state in the country except Michigan between 2000 and 2010,” he said. “The reality is that we haven’t recovered all of our jobs. You look at these jobs being lost, and it isn’t going to be surprising that there are going to be income implications for households.

“When you see the labor market tightening up, that is when you will start to see opportunities for increasing wages,” Lawson said.

It is a case of supply and demand: Too many workers chasing too few jobs. What has happened in Ohio is an exaggerated version of what has gone on nationwide.

Not surprisingly, Ohio’s struggle to recapture jobs has been accompanied by a shrinking labor force. People leave the labor force for a variety of reasons. Some return to school. Others retire. Still others are discouraged workers, who give up looking for employment for fear of being unable to find a job.

David Cooper, a senior economic analyst at the Economic Policy Institute in Washington, D.C., examined Labor Department data to look at the prime age employment to population ratio, based on the share of those 25 to 54 who are currently employed.

“It is the single best measure of the health of the labor market,” he said. “It excludes all the folks who may be retiring and excludes all the folks who might be going to school.” The institute’s goal, according to its website, is to broaden the discussion about economic policy to include the interests of low- and middle-income workers.

In the second quarter of 2015, Ohio’s prime age employment to population ratio was 78.9 percent. Nationally, 77.4 percent of the prime age working population was employed. In the second quarter of 2000, Ohio’s prime age employment to population ratio was 82.3 percent and 81.7 percent for the nation.

“That means about 4 percent fewer of Ohio’s population today in their prime working years have a job than did 15 years ago,” he said.

Cooper said discouraged workers have played a role in lowering the prime age employment to population ratio.

“It is a significant factor,” Cooper said. “I don’t know specifically whether it is the dominant factor.”

Even though they are jobless, discouraged workers can play a role in lowering the unemployment rate. In order to be counted as unemployed, a person must be both jobless and actively looking for work. So, those who have dropped out of the labor force aren’t counted.

“Just looking over the past year, Ohio’s unemployment rate fell by 0.7 percentage points,” he said. “Over the same period, Ohio’s labor force shrank by 0.5 percent. That means that even though Ohio had a drop in unemployment, we can’t be sure that all of that drop was people finding jobs. A significant portion of it was probably folks giving up the job search.”

Is there a Kasich factor?

Gov. John Kasich, who is running to become the Republican nominee for president, often says that Ohio’s unemployment rate is lower than that of the nation. In August, Ohio’s jobless rate was 4.7 percent. The nation’s jobless rate was 5.1 percent. Such a comparison doesn’t show how Ohio’s labor market stacks up to that of the U.S.

Kasich’s campaign boasts about the number of jobs that were created since he took office in 2011. More than 343,000 jobs have been created in the state under his tenure.

Duke of the liberal Center for American Progress said the number isn’t very impressive when taken into context. Ohio reached its lowest point of employment and highest post-recession unemployment rates in 2010. He said also factor in that Ohio was one of the hardest hit states during the recession. By 2011, there was nowhere to go but up, Duke said. Because of this, he said Ohio’s job growth rate should have exceeded that of the nation.

“Looking at job growth in the United States, beginning in January 2011 and going until July 2015, U.S. employment grew 8.6 percent. In Ohio, it grew 6.5 percent,” he said.

Duke said policies pushed by President Barack Obama spurred job growth in Ohio. They include the auto bailout and the Affordable Care Act, also known as Obamacare, since the auto and health care sectors accounted for nearly 19 percent of the jobs created during Kasich’s tenure.

Lawson, of the conservative Buckeye Institute, questions how much any governor could influence the performance of any state’s economy.

“We oftentimes give governors too much credit when times are good, and we put too much blame on them when times are bad,” he said. “If the entire economy of the United States is doing well, the states are often doing well.

“In the 1990s when (George) Voinovich was governor, Ohio was doing quite well,” he said. “The U.S. economy was doing well.”

Can things be turned around?

Lawson said Ohio’ job growth problems started long before the recession in the early 2000s.

“Since about 1973, Ohio has had a really hard time keeping its job growth at the national average,” he said. “It is really not a recent phenomenon. It really transcends whoever was in the governor’s mansion of either party. It is a structural challenge that Ohio has had for decades.”

A major characteristic of Ohio’s job loss since 2000 has been the disappearance of manufacturing jobs. They went from comprising 18 percent of the state’s employment in 2000 to 13 percent by 2015.

“In early 2000, Ohio employed over 1 million workers in manufacturing jobs,” Kalich of Baldwin Wallace said. “By 2009, the number had plummeted by almost 40 percent to its all time low of about 612,000. Since then, there has been a small recovery in manufacturing jobs, but in total, the number is below 700,000 — at 686,800 — as of August 2015. Ohio has not recovered over 340,000 jobs in manufacturing.”

At the same time Ohio was losing manufacturing jobs, the state was gaining jobs in the education and health services sector. Most of the growth was in health care, which increased by 33 percent from 586,800 jobs in 2000 to 781,700 by 2015, Kalich said. Jobs in education grew about 36 percent, from 86,000 in 2000 to 117,400 in 2015. Education and health went from being 12 percent of Ohio’s jobs in 2000 to 17 percent by 2015.

This shift has an impact on wages. Average hourly wages in manufacturing, at $24, are about $3 more than they are in education and health services.

“The health care sector also includes a lot of lower-paying jobs,” she said.

Kalich said other sectors increasing their share of jobs included professional and business services, which went from 11.5 percent in 2000 to 13.2 percent in 2015. Leisure and hospitality increased from 8.5 percent in 2000 to 10 percent by 2015. While wages in professional and businesses are similar to those in manufacturing, the leisure and hospitality sector has many low-paying jobs.

For experts such as Zeller, the economic research analyst, developing a strategy for growing jobs in Ohio should focus on increasing manufacturing jobs. He said the state – as well as the national economy – hasn’t been able to find a suitable replacement. Low-wage jobs, such as home care workers, have comprised much of the post-recession job growth.

Mark Sniderman, executive in residence in the economics department at theWeatherhead School of Management at Case Western Reserve University, disagrees.

“This decline in the overall share of manufacturing employment has been a trend that has been going on in Ohio and the United States and many other countries of the world, including China,” he said. “As manufacturing enterprises become more and more efficient, they are able to produce more value of production with fewer people.”

Sniderman said education is the key to improving Ohio’s labor market. According to recently released Census data, Ohio ranks 36th nationally in the percentage of residents, 25 and older, holding at least a bachelor’s degree. In 1990, only 17 percent of Ohioans held degrees, with the state ranking 39th. He noted that states with the highest levels of education, such as Connecticut and Maryland, also had higher median household incomes.

“Wages, broadly speaking, seem to be correlated with skill level,” he said. “If we want to get the wages of working people to be higher, then we want people to have more skills. If we want to be able to attract employers, the workers have to have higher skill levels.”

Sniderman said education is a long-term prospect that isn’t always politically expedient. For example, he said improving early childhood education would ultimately lead to a better-educated labor force.

“It is a lot easier to say why don’t we build this bridge or repave these streets or do this or that because you could actually see the bridge, and people feel that they could understand where the money is going,” he said.

“Maybe they don’t have that much confidence when they can’t see it right in front of them when money is used to enhance education, but there is a huge social benefit to doing that,” Sniderman said.

Some of the experts noted that wages have fallen or become flat – not only in Ohio, but nationally – as jobs in once heavily unionized sectors, such as manufacturing, have disappeared.

“The percentage of union membership is declining, so good or bad, the pressure isn’t there anymore for wages to be higher,” Kalich said.

Duke said several studies have shown that up to one-third of declining wages among men may be do to declining union membership.

Lawson, who supports right-to-work laws, said while union members have higher wages than their non-union counterparts, he believes unions ultimately lead to fewer jobs being created.

“They can be a little intransigent when it comes to management relations,” he said. “One of the biggest problems in Ohio is that public-sector unions increase the cost of government. That creates tax issues and competitive issues that don’t create the right environment for businesses wanting to come to Ohio.”

Duke said because the Midwest was traditionally one of the most unionized regions of the country, income inequality hadn’t been significant here. Troubling to him, is that income inequality in Ohio has risen.

He found that in 2000, the middle class’ share of income generated in the state was 49.5 percent. By 2013, it had fallen to 47.2 percent.

While the middle class’ share of income is greater than the U.S. average of 45.8 percent, Duke still expresses concern about rising inequality here.

“In Ohio, we see a 4.6 percentage point decline in the share of income going to the middle class,” he said referring to difference in share between 2000 and 2013. “In the U.S. there was also a decline, but it was a 1.9 percent decline.”

Is Brain Gain Taking Place in Shrinking Cities: Read This IEDC Article

If you ask leaders of legacy cities – older, industrial metros – what keeps them up at night, odds are you will get brain drain as a top response. However, “Brain Gain in America’s Shrinking Cities,” a report from the Manhattan Institute, contends that most of these cities with declining populations are in fact growing their pool of college-educated residents. The report finds that:

1. Every major U.S. metro area that is losing population and/or jobs is actually gaining people with college degrees—at double-digit rates.

2. As a group, America’s shrinking cities are holding their own with—and, in many cases, outperforming—the rest of the country in overall education-attainment rates.

3. Most shrinking U.S. cities are increasing their educated-population share by adding more young adults with college degrees—and are catching up with the rest of the U.S. in young adult college degree–attainment levels.

The report posits that the “time and money being spent to fight brain drain in these cities should instead be redirected to more real and pressing problems, such as fiscal distress, infrastructure challenges, public safety, and excessive regulation.”

Despite gaining educated residents, population decline is problematic nonetheless. Several cities are looking to immigrants as a way to grow their tax bases and create more small businesses. Pittsburgh, for example, has lost nearly half its population in the last 55 years. Mayor Bill Peduto’s “Welcoming Pittsburgh Plan”aspires to attract 22,000 new immigrants to the city (Next City). The plan calls for increased youth and cultural exchange programs and a biannual “Citizenship Day” to offer immigration legal services. Peduto is also pushing for a municipal ID card that would allow undocumented immigrants to open a bank account, sign a lease, and unlock other city services.

How the Internet of Things Could Transform Public Services

As technology evolves, governments are going to need to rethink how they do business.
by , , | Governing Magazine, September 2, 2015
Cars that can communicate with each other to avoid collisions. Thermostats that can be controlled from thousands of miles away with a smartphone. Industrial machinery that alerts its operators when maintenance is needed. Coffeepots that talk to alarm clocks. All of these make one thing clear: The definition of a computer is changing, again.

The continued evolution toward cheaper processors and faster networks has enabled a shift from desktop workstations to mobile phones and, now, to everyday objects, inspiring the term “Internet of Things” (IoT). Almost any device can be Internet-enabled, linking it to additional computing power and analytic capabilities that make it “smart.”

This aggregation of outputs from sensors, beacons, machines and other IoT devices offers far more value, however, than just a better product. As more complex and mature systems take advantage of this connectivity to tap into new capabilities, it’s critical for governments to think about how these technologies can combine to create value in new and different ways.

As we outline in a new Deloitte study, governments have a huge opportunity to improve outcomes using IoT technologies that provide immediate feedback and drive better decision-making. But while the private sector is mobilizing around this trend, many in government still question whether the IoT can help them achieve their missions.

“If the Internet of Things has to do with home automation or automation of the car [or] controlling devices like security systems through the Internet … what does [it] have to do with any of the service-providing departments of government?” asked one respondent in a 2014 GovLoop survey.

Admittedly, it may be difficult to see the immediate relevance of smart thermostats or connected appliances to government, but deriving value from information collection and analysis is central to many government missions. The IoT can facilitate this in two principal ways: by collecting better information about how effectively public servants, programs and policies are addressing mission challenges and by helping government deliver services based on real-time and situation-specific conditions.

Early government IoT activity has coalesced around a few main areas, including “smart cities” focused on improving citizen services and federal agencies focused on scaling up their measurement capabilities. Local experiments include “smart parking” that helps commuters find spots (and streamlines city enforcement) or “smart waste” such as solar, Internet-connected trash bins that communicate their status to help optimize collection routes.

At the federal level, agencies are more focused on scaling measurement capabilities: The Department of Defense uses RFID chips to monitor its supply chain more accurately, the U.S. Geological Survey employs sensors to remotely monitor the bacterial levels of rivers and lakes, and the General Services Administration has begun using sensors to measure and verify the energy efficiency of “green” buildings.

Many of these government applications focus on optimizing current operations. The next frontier lies with identifying how faster, more precise and more reliable information might generate new possibilities for service delivery. To fully reap the IoT’s potential benefits, government agencies will need to rethink how they do business — identifying new models for service and adopting the technology and corresponding organizational structures to support them.

Consider IoT’s potential impact on policing. Environmental sensors could automatically detect early indicators of an emergency or crime. Already, devices can detect the sound of a gunshot and pinpoint its location to within 10 feet. By automatically alerting police dispatch, it obviates the need for a victim to report a crime and even detects crimes that might never have been reported.

Wearables could supplement body cameras by providing insight into police officers’ behavior, enabling both real-time support and long-term coaching. Connected firearms offer the opportunity to track when a weapon is removed from its holster and when it is discharged. In the moment, pulling or firing the weapon can dispatch additional support, while over time the record can inform coaching and professional-development discussions.

Similarly, monitoring stress levels, heart rate or voice volume could make supervisors or fellow responders aware of elevated tension that might put an officer or the public at risk, allowing them to intervene immediately or debrief afterward on how to handle similar situations. This has particularly powerful implications in an era in which local police are increasingly tapped for crowd control or major-incident response.

How should public-sector leaders begin to tap into the potential of the IoT? Start by identifying specific, pressing mission challenges, and then analyze how more or better information, real-time analysis or automated actions may help address them. By solving for concrete problems, governments can more effectively identify technical, organizational, and talent changes necessary to realize new benefits — and then scale up what works.

One thing is certain: Getting these systems right isn’t going to be easy. But government agencies that adopt a wait-and-see attitude toward the Internet of Things are unlikely to develop the expertise needed to effectively and efficiently deliver services in this new reality.

Broadband Expands into Rural America, But How Many Will Adopt?

From Governing Magazine

High-speed Internet is finally starting to reach the nation’s most remote areas. Many residents, though, are slow to adopt it.

Green Bank, W.Va., is not the sort of place where one would expect to find high-speed Internet. Surrounded by rocky terrain, the hamlet of fewer than 200 people lies on the edge of the Allegheny Mountains. Cellphone service is unavailable for miles and radio transmission is strictly limited to avoid interference with a federal astronomical observatory nearby. It’s a place where residents can, quite literally, live off the grid.

Even so, the grid is coming. Over the past year, crews have been laying the groundwork for broadband service that will better connect Green Bank to the rest of the world. A local telecom has wired the area with fiber-optic cable, sometimes averting black bears in order to dig lines in the ground along steep mountainsides. Residents are finally getting high-speed Internet.

But how many will use it?

Even as broadband infrastructure has spread across much of rural America in the past few years, often funded by the federal stimulus program of 2009, potential customers have been slow to adopt the technology. Some don’t have a computer, or they lack digital literacy. For others, it’s too expensive. Then there are those who’ve learned to live without the Internet and just don’t think it’s relevant to their lives. The older and poorer they are, the harder it is to get them online. “A lot of people had great expectations for the investments and infrastructure,” says John Horrigan, who has researched broadband for the Federal Communications Commission (FCC) and various think tanks. “They’re going to have a rude awakening in a couple years if they don’t see people using the services as much as they hoped for.”

For homes without an Internet connection, the largest barrier to adoption is that people just don’t feel they need it. A Governing analysis of microdata from the Census Bureau’s 2012 Current Population Survey shows that nearly 53 percent of U.S. householders without Internet service of any kind cited a lack of interest or need as the main reason for nonadoption. Another segment of the population remains stuck at slower speeds, mostly in remote areas where it’s costly to deploy service. About 8.5 percent of Americans lack access to connections that the FCC considers to be broadband.

Green Bank, W.Va., a hamlet of fewer than 200 people, is not the sort of place where one would expect to find high-speed Internet. (David Kidd)

Connecting the remaining broadband nonadopters, experts say, will be the most difficult. The review of data shows adoption rates outside of metro areas remain remarkably low, with less than half of select demographic groups having home broadband access. Just 49 percent of rural householders with no college education had adopted the service, while only 46 percent of rural householders age 65 and older had done so.

Lower-income families connect at notably lower rates. Of households outside metro areas with incomes below $25,000, just 41 percent had broadband, while half of those in metro areas had subscribed. Connected Nation, a nonprofit advocating for broadband expansion, estimates that 39 percent of nonadopters would sign up for broadband service if it were offered at a lower price point.

The overall pace of U.S. broadband adoption has slowed somewhat after a long period of rapid growth. About 70 percent of Americans reported broadband connections at home in the latest Pew Research Center survey last fall, up slightly from 64 percent from 2010. But as the service extends to the rural reaches where it hasn’t existed before, it’s much harder to sustain.

While Green Bank’s fiber network is new, the campaign to install it has been going on for several years. Miriam Hedrick, a representative for Spruce Knob Seneca Rocks Telephone, began going door to door in 2012 to sell residents on the prospect of high-speed service. The telephone cooperative received a federal grant to pay for the construction of a fiber network in Green Bank and six other towns.

Building out the high-speed network was no easy job. The rocky terrain made burying lines difficult. The fact that the area lies within the National Radio Quiet Zone complicated matters since the workers couldn’t use wireless signals that would interfere with the Green Bank Telescope. Vickie Colaw, the company’s general manager, estimates it may have cost $5,000 to $10,000 to deploy Internet to some of the most isolated residences. “It’s a unique situation and not your run-of-the-mill installation by any stretch,” she says.

Crews are stringing fiber-optic cable in remote parts of West Virginia. (David Kidd)

As in other rural areas, many of the telecom’s potential customers are older residents who tend to connect at lower rates. The median age in surrounding Pocahontas County is 47.5 years, about 10 years older than the national median. “A lot of the seniors we see coming in don’t even imagine all the ways they could use the Internet,” says Vicky Terry, the county library system’s director.

Some parts of rural America are connected to the Internet, but not in a way that is useful to them. A legacy provider in Pocahontas County offers low-grade DSL and dial-up service, but slow speeds and poor reliability limit its effectiveness. This is a source of great frustration for some locals, particularly business owners. “The Internet issue has been constant and persistent every year,” says David Fleming, the president of the Pocahontas County Commission.

Fleming started an online forum for residents to report download and upload speeds on the obsolete DSL system. The owner of Murphy’s Body & Repair Shop says his bids for online auto auctions don’t go through fast enough, so he frequently gives up. The only nearby option for Green Bank residents without any home access was the local library, which was also plagued by slow DSL service. Now that will change.

As in other remote areas, the economic implications of high-speed Internet in Green Bank are huge. Jobs remain scarce, with much of the area’s economy tied to logging or tourism. Once teenagers go off to college, few jobs exist to lure them back. Fleming says some residents might start second careers or launch Internet-based businesses if high-speed connections were more available throughout the county. “There’s a lot of entrepreneurial spirit here, but people need the Internet to do it,” he says.

In the past few years, West Virginia has seen some novel approaches in providing help to communities whose residents either couldn’t or wouldn’t subscribe to high-speed service. A nonprofit used stimulus funding to pay for more than 60 computer labs housed around the state in volunteer fire and rescue stations. Paid and volunteer lab mentors led classes in online genealogy research, GIS tracking and other subjects.

Ed Krueger ran a lab in Cass, an old logging town just south of Green Bank. Longtime residents who had never used a computer before stopped by, but some didn’t seem too interested after an initial visit. “The general population that’s been here forever could take it or leave it,” Krueger says. “The younger people and those who moved in from someplace else miss their Internet and cellphone.”

Now federal funding has expired, and only locations with volunteer mentors maintain open lab hours. Many of the labs now serve as classrooms for firefighters and first responders taking online training courses.

Ed Krueger oversees a computer lab in the back of a fire station. “With slow speeds, people get frustrated really quick when they try to play a video.” (David Kidd)

Nationally, enhancing digital literacy has served as a key component in the effort to increase adoption of high-speed service. In a 2013 Pew survey, about a third of offline adults reported they weren’t online primarily because of usability concerns, such as a lack of skills or finding the Internet too frustrating. Some telecoms and nonprofit groups have responded by providing training sessions and refurbished computers.

In many remote areas around the country, as in West Virginia, it’s the small, independent telecoms that are largely driving broadband adoption. Large companies often balk at the high costs of broadband deployment in sparsely populated rural areas. Talking to residents directly is generally more effective than offering impersonal promotions, says Rod Bowar, president of the Kennebec Telephone Company in central South Dakota. The company, like some other rural telecoms, holds classes with a focus on how the Internet can help customers in their everyday lives. Ranchers in South Dakota, for example, use streaming video to monitor cattle in their barns.

Many of the rural broadband buildouts have benefited from federal stimulus money. Spruce Knob Seneca Rocks Telephone in Green Bank received a grant from the federal Broadband Technology Opportunities Program to cover construction costs (although it did not receive funding for capital improvements or personnel).

All told, the federal government’s National Telecommunications and Information Administration (NTIA) awarded a total of $4.4 billion in stimulus funds for broadband connection over a period of several years. The vast majority of the federal grant money went toward infrastructure investment. A much smaller sum — $249 million — paid for digital literacy and other adoption projects, while another program awarded money for states to track data on broadband speeds and availability. According to NTIA, federal assistance was responsible for a total of 730,000 new broadband subscribers.

Dee Davis, president of the Center for Rural Strategies, says the federal grants were not sufficient to deal with the problem of limited Internet use in rural areas. “It was money well spent,” he says, “but it was not enough money to change the dynamics.”

The FCC has moved to modernize Lifeline, a federal program providing discounts on phone service, to include funding for broadband adoption. The agency launched a pilot program last year to study how funds might be directed to increase adoption. Fourteen selected pilot projects offer varying service discounts to eligible low-income consumers. The enrollment numbers from the pilot are expected to help determine how the agency structures future subsidies.

Those pushing efforts to speed up investment in infrastructure and adoption argue broadband shouldn’t be viewed as merely a luxury item or a way to watch Netflix. “We haven’t fully imagined what the Internet can do in rural communities,” Davis says. “We’ve thought of it more as a away to connect culturally and socially.”

In Green Bank, the benefits of high-speed Internet are just starting to be realized. Staff at the nearby National Radio Astronomy Observatory previously had to transport hard drives with raw data to West Virginia University in Morgantown a couple of times each week. Now, thanks to a state grant, they’re able to stream data with a 10-gigabit connection in real time. “We have been working to get increased Internet speeds in the county for 14 years,” says Mike Holstine, the observatory’s business manager. “The fact that we have added providers is a huge boon to the connectivity of the community.”

Broadband Adoption Map

The following map shows December 2013 broadband adoption rates for counties, with counties shaded darker having higher shares of fixed residential high-speed connections. (Click to open interactive map in new window)

 

The New Unemployables in Rural Areas

Must read for Ashtabula County.
From Governing Magazine
Drugs, crime and the social ills long associated with urban areas have migrated to rural America, and it’s having a profound effect on the economy.

Job creation is up. That’s the good news. The bad news is that the associated decline in the unemployment rate has been driven more by people dropping out of the labor force than by those finding work. There are still millions of long-term unemployed people, and the disability rolls, partially seen as a form of shadow unemployment, have also soared. In the meantime, many employers say they can’t find qualified workers or that there are skill shortages.

This puzzling disconnect — workers can’t find jobs while jobs can’t be filled — has been attributed to many factors, such as mismatches between skills or geography. But while those may account for part of the problem, the issue is more fundamental — one of baseline unemployability.

I grew up in a rural southern Indiana community. It was no Mayberry-like idyll, but you really could leave your doors unlocked and the keys in your car. The boys in high school did carry on, and yes, people were sometimes killed in drunk driving accidents. But things like hard drugs were nonexistent. They simply couldn’t be obtained there.

Today southern Indiana is making national headlines for its drug-related HIV epidemic. The rural county where I grew up had 35 meth lab busts in 2013 alone. You can’t leave your doors unlocked anymore. Drugs, crime and other social ills long associated with the inner city have now migrated to this rural area and many other similar places around America.

This might seem surprising given that some population-wide social indicators, such as teenage pregnancy rates, have been showing improvement nationally. But that’s only part of the picture. As scholars as ideologically diverse as Charles Murray and Robert Putnam have documented, there has been a significant degradation in the recent past in social conditions in communities outside of the upper middle class.

From my own observations, one cause is the intergenerational decline of social capital. We can certainly see this in the areas of divorce and the rise of out-of-wedlock births since the late 1960s. The first generation experiencing these had robust family and social structures to sustain them when splitting up or having a child outside of marriage. Fast-forward to today, and this social capital has badly deteriorated. After multiple generations of single parenthood, even grandparents no longer have the financial or personal capacity to be as supportive as they would have been decades ago.

Many other factors have been at work too, such as the rise of at-home meth manufacturing and the growth of drug distribution networks, along with painful changes in the industrial economy.

We can see the impact of these trends across the job market. My father, who retired a few years ago as a quarry superintendent, told me of the difficulty he had had hiring and keeping employees. This was at a firm that, while not glamorous, paid some of the best full-time wages in the area — wages that came with full benefits plus profit-sharing. Yet the overwhelming majority of applicants weren’t considered viable enough to even interview. Of those he did hire, a third failed to last even six months, with many being fired early in the probationary period.

This had nothing to do with job availability or wages and everything to do with the basics, such as having a high school diploma and reliably coming to work every day. This goes beyond hard and soft skills to baseline employability.

While certainly the good old days of plentiful high-paid jobs at the auto plant are gone, it’s still possible to build a life in America if you graduate from high school, stay away from drugs and crime, wait until you’re married to have children, and show up to work every day. But if you slip on one of these points, say by dropping out of school, you are put into a deficit in life from which you may find it difficult to recover. Sadly this has affected a lot of people, who are now in a very difficult place.

To be clear, there are many who suffer from a bona fide skill deficit or geographic mismatch, especially older industrial workers who long ago demonstrated that they are able and willing to work a steady job but have struggled to find work after plant closures. Yet for a segment of our population, traditional workforce or economic development remedies will not help. Whatever their root cause, which is a source of dispute, there are baseline personal and social issues that need to be overcome.

Addressing this matter will not be easy, because the issues are so politically charged and require confronting unpleasant truths about legal and social changes that virtually no one wants to roll back, but which have had profoundly negative effects on the working class. At a minimum, the emergence of inner-city-type conditions in white working-class areas might perhaps convince some whites that something other than race produces these results.

Regardless, today inclusive economic development is no longer simply a matter of creating jobs or teaching specialized skills. It will increasingly mean confronting thorny social as well as economic problems.

IBM on the Future of Learning

Five key trends for the future of education – technology immersion, data analytics, personalized learning paths, knowledge skills and economic alignment – are rapidly converging to produce a new paradigm called the “educational continuum.” The educational continuum achieves economic objectives by aligning the talent of human capital to the growth initiatives of a labor market. How an educational system responds to these trends will determine not only the value of that system to students, but ultimately the long-term value of the system to society.

Read this white paper to:

  •  Understand the direction, rate of change and shifting dynamics of each trend
  •  Develop realistic strategies for education policy, investments and programs
  •  Learn how to improve student performance, create greater workforce flexibility and enhance value to society

Download the full IBM report here.

Opportunity Occupations in the Eyes of the Federal Reserve Bank

The Federal Reserve Banks of Philadelphia, Cleveland, and Atlanta recently published “Identifying Opportunity Occupations in the Nation’s Largest Metropolitan Economies” (PDF) The report analyzes the availability of good-paying jobs that don’t require a bachelor’s degree across the country’s 100 largest metros.

The availability of these occupations range from 36.6 percent in some metros to half that in others. On average, opportunity occupations represented 27.4 percent of jobs in 2014. Specifically, “opportunity occupations” are defined as those that don’t require a bachelor’s degree and pay at least the national median wage.

The report also discovered that many employers are asking for educational attainment beyond traditional minimum requirements for several of these jobs. These additional preferences lowered job availability to non-college graduates by as much as 10 percent in some places, typically those metros with higher cost of living and a more educated workforce. In other occupations, educational requirements are becoming laxer.

Several data sets were used in the report, each with notable variance, however three occupations were found in each set’s top five most prevalent: registered nurses; bookkeeping, accounting, and auditing clerks; and truck drivers.

The report admits that variance across these data sets makes it difficult to identify which metros are the most opportunity rich. One data set identified Kansas City, Mo.-Kan., as having the highest percentage of opportunity occupations; another set puts Louisville-Jefferson County, Ky., at the top.

The report also calls for further study as to why certain opportunity occupations are requiring higher educational attainment. The authors offer several possible explanations:

  1. A larger labor supply that allows employers to be pickier;
    A growing complexity in work that government classifications are failing to make distinctions for; and
  2. The bachelor’s degree is being used as a proxy for intangible skills employers seek.

Learn more here.