Month: March 2016

Ashtabula County Labor Market Overview

Ashtabula County has experienced only a very modest recovery from the Great Recession. Total employment in the county declined by 11% or by 3,418 jobs between 2001 and 2014. Since 2009, only 852 of these 3,418 lost jobs have been added back. Manufacturing jobs declined by 25% during 2001-2014, resulting in a 2,358-job loss in the sector. Since 2009, the county has experienced a loss of 801 manufacturing jobs.

While Ashtabula County’s unemployment rate has dropped from 14% in March 2010 to 7.7% in January 2016, this drop is fully accounted for by the 4,000 workers leaving the county’s workforce during 2010-2016. This shrinkage of the resident workforce and the outmigration of working age people from the county have added greatly to the county’s tight labor market with a very limited supply of employable workers available.

A sharp contrast exists in the demographic characteristics of Ashtabula County residents working inside and outside the county. Those working in the county are older (more age 55 and older) and have more moderate incomes, while those working outside the county tend to be younger ( in the 30-54 age group) with higher incomes.

Ashtabula County’s 2014 population was estimated at 99,175, with a loss of 2,322 people (2.2%) since 2010. Population losses have been the result of significant net outmigration, which has averaged 500 working age people per year since 2003. The county population is projected by state authorities to drop to 98,600 by 2040.

Despite the fact that many local employers have hired new workers in the past year, we see several employers now (since January 2016) reducing their employment rolls incrementally due to concerns about the economy. We believe these employers sense a future economic downturn based upon larger national and global events.

Local employers rely on a wide variety of channels to find workers. This includes the Ohio Means Jobs website, other online services, job fairs, word of mouth through existing employees, local schools, advertising for high skilled and professional workers, and temporary agencies for general labor.

A large number of local employers continue to struggle in finding and keeping quality workers, especially general labor. Turnover is a major problem in the general labor category.

We foresee a growing reliance on immigrant workers, which is evidenced at several local employers, including Lake City Plating and Molded Fiber Glass Companies.

Researcher says temporary agency work is not generally a stepping-stone to regular employment

Article by Susan N. Houseman (W. E. Upjohn Institute)

Elevator pitch

Temporary agency work has expanded in most advanced economies since the 1990s, but its growth has been controversial. Some argue that these jobs offer experience and contact with potential employers, serving as a path to regular employment, particularly for low-skilled workers. Others view them as traps, fostering low-wage, unstable employment and providing little experience and few contacts.

Employment in temporary agency work,
                        2007

Key findings

Pros

  • For some groups, such as immigrants, temporary agency work may give workers an opportunity to demonstrate their ability and so be a stepping-stone to regular employment, particularly during times of low unemployment.
  • If the unemployed have few alternatives, signing up with a temporary agency may improve employment prospects and earnings in the short term.
  • Temporary agencies may be a pathway for some to fairly high-paying jobs, such as those in manufacturing.

Cons

  • Temporary agency work usually is associated with lower earnings and less stable employment.
  • Temporary agency work generally is not a stepping-stone to regular, open-ended contracts, and it does not improve employment rates and earnings over the medium and long terms.
  • Taking temporary agency work may hamper some workers’ ability to make the transition to a regular job and may reduce subsequent employment and earnings.
  • In Europe, fixed-term contracts provide workers with better opportunities for upward mobility than temporary agency work.

Author’s main message

Temporary agency work may lead to regular employment for some, particularly when the economy is strong, but it generally does not help workers move to regular, open-ended contracts. Thus, government reemployment programs should use it selectively only, and policymakers should be cautious about promoting temporary agency work as a way to improve worker incomes, reduce unemployment, and mitigate poverty.

Number One Predictor of Career Success: Open Networks

What is the biggest defining factor to career success? Drum roll … The bottom line? According to multiple, peer-reviewed studies, simply being in an open network instead of a closed one is the best predictor of career success. Does Ashtabula County encourage and allow access to open networks? This is an important question to think about. 

In fact, the study shows that half of the predicted difference in career success (i.e., promotion, compensation, industry recognition) is due to this one variable.

What do open networks do for you?

• More accurate view of the world.

• Ability to control the timing of information sharing.

• Ability to serve as a translator / connector between groups.

• More breakthrough ideas.

Read the full story.

New Report on American Workers Indicates Problem-Solving Lag

A new report issued by the National Center for Education Statistics has found that American workers rank “dead last” out of 18 industrial nations when it comes to problem-solving skills using technology, the Wall Street Journal says. The report is based on Program for the International Assessment for Adult Competency (PIACC) data that tested thousands of adults aged 16 to 74 on literacy, numeracy, and digital problem-solving.

The results show that in the 1970s the U.S. had the most educated workforce in the world—but since 2000 the skills and knowledge of high-school graduates here have stagnated while other countries have seen a rapid increase in those traits.

“One stark revelation is that about four-fifths of unemployed Americans cannot figure out a rudimentary problem in which they have to spot an error when data is transferred from a two-column spreadsheet to a bar graph,” the Wall Street journal says. “And Americans are far less adept at dealing with numbers than the average of their global peers.”

Attracting People to Rural Areas

I ran across a valuable report about attracting people to rural areas by a Canadian researcher. Here is the link: Attracting-and-Retaining-people. It is a good resource for us in Ashtabula County.

Attracting population to small rural communities can be a challenge as most people prefer to settle in larger cities where the draw of family, friends, ethnic networks and jobs is strong. However, rural communities can attract and retain population by promoting the benefits of living and working in smaller communities (e.g., employment opportunities, lower living expenses, safe neighborhoods and access to community health and recreation services).

The report was developed as a resource guide to assist rural communities wishing to attract and retain population to address their long-term economic needs. The report includes information and links to web based resources, initiatives and programs. The document contains information on some best practices that have been developed by other countries. The document also reviews the literature on benefits, challenges and strategic options to attract and retain population in rural communities.

The information is divided into the following five sections to allow communities to locate information relevant to their situation more quickly:

1. Attraction and retention of immigrants and migrants to rural areas

2. Attraction and retention of youth to rural areas

3. Attraction and retention of retirees to rural areas

4. Attraction and retention of professionals to rural areas

5. Attraction and retention of artists to rural areas

Want to Move the Needle in Economic Development? Create Opportunity and Invest in Quality Education!

This is a worthwhile read for all concerned about economic development in Ashtabula County. It says infrastructure is NOT the first thing to invest in to save fading local economies.

While fixing roads and bridges is useful and can provide a temporary boost, it’s not sufficient to revive local economies or maintain infrastructure in the future. Fixing roads and bridges is useful and can provide a temporary boost, but it’s not sufficient to revive these local economies or maintain infrastructure in the future. America is becoming more unequal, not just between high and low earners, but between struggling and thriving pockets of the economy. Ultimately, poor infrastructure isn’t the most pressing issue facing most American cities, it’s a lack of opportunity and quality education. Considering that, you can’t totally fault local politicians for promising lower taxes, to the detriment of infrastructure, when their constituents are living paycheck to paycheck. Struggling local economies are what sparked a race to the bottom with lower taxes and fewer services. Read the complete article here.

2016 Economic Projections: Growth Will Be Good But Not Great

Despite an uptick in hiring, Americans — worried about global growth — are keeping their wallets closed. With consumers pulling back on purchases, it’s no wonder manufacturing — which makes up 10 percent of the U.S. economy — is contracting. Decreasing optimism is borne out by PwC’s Q4 Manufacturing Barometer, with only 46 percent of those surveyed saying they were optimistic about the direction of the U.S. economy. However, although the CFOs polled by Deloitte in Q4 2015 are concerned about the global economy, they believe that North America (and the U.S. in particular) can continue to shoulder the burden of economic growth in 2016.

With whom to those surveyed by Area Development in the final quarter of 2015 agree? Interestingly, the respondents to our 30th Annual Corporate Survey are pretty much evenly split: 48 percent believe the U.S. economy has achieved a continuous growth track, while 52 percent say it has not.

If hiring does continue to pick up, wages will increase further, and perhaps spur consumers to spend more and boost economic growth. Nonetheless, Gus Faucher, senior economist at PNC Financial Services in Pittsburgh, told The New York Times (1/29/16), “This year is going to look a lot like the past couple of years. Growth in 2016 will be good but not great.”

Talent Challenges Exist Across Northeast Ohio, Not Just Ashtabula County

Cleveland-area chief financial officers are finding it more challenging to find skilled candidates for professional-level positions, according to the most recent Cleveland Professional Employment Forecast from Robert Half.

According to the survey, 61% of CFOs said it’s “somewhat or very challenging” to find skilled workers for those positions. That compared to 55% who said as much in Robert Half’s previous survey released in August. In particular, many firms said it’s difficult to staff financial positions, as 14% of Cleveland executives said it’s “much more challenging or somewhat more challenging” to find skilled candidates for finance and accounting positions today compared to three years ago.

Moreover, only about 11% of those surveyed said their companies plan to create new jobs over the next six months, while another 70% plan to hire for only open roles. The results are a slight change from what CFOs said in the previous survey, when 13% said they expected increased hiring.

Cleveland-area CFOs remain confident about their companies’ prospects, as 91% of executives reported in the survey being “somewhat or very confident in their company’s prospects for growth in the next six months.” That’s up one point from six months ago.

Source: Crain’s Cleveland Business

Governing Magazine: Should Economic Development Focus on People or Places?

There’s a raging debate about whether the focus of our economic development efforts should be on people or on places. That is, should we make investments in people, hoping to see them succeed regardless of where they end up? Or should we focus on investments in particular cities, towns and rural areas in order to bring jobs and growth, thus helping the people who live there?

Many in the know think that the focus should be on people. Rather than trying to resurrect struggling locales with various speculative endeavors, they think we should invest more in things like education. I myself have critiqued the place-based economic development strategy of trying to stop the so-called brain drain.

Most local government leaders, however, seem uninterested in people-based strategies, at least insofar as they are seen as ingredients in economic development. These leaders tend to prefer place-based approaches such as stadiums, casinos and convention center projects that so often are panned as boondoggles.

Even if this may be less than ideal from a theoretical perspective, it is understandable. After all, localities are inherently place-based entities. One thing that makes a local government distinct from a corporation or other organization is its status as a territorial entity. Cities and towns can expand, but it’s rare that they ever get rid of territory once they’ve acquired and incorporated it.

A city’s territory is much more tightly bound to it than its citizens are. People can move. They can choose to affiliate themselves with another town. But cities cannot exchange one geography for another.

This produces some bad incentives. For example, the fiscal liabilities of a locality attach to its territory, not to its citizens. So voters have every incentive to pull the lever for politicians who will minimize costs in the present at the expense of the future. Politicians can sign bad union deals with future pension promises that are hard to fulfill. They can go into debt to spend money now.

But the citizens who voted for those politicians can then simply move to another town, often to a suburb (or a different suburb) within the same region, to avoid paying off those debts. In many cases they don’t even need to change jobs. It’s like being able to run up big debts on a credit card in someone else’s name. If cities were people-based entities and the debts run up during the time citizens lived there followed them wherever they went, we’d surely see much more fiscal sanity.

Given their fundamental territoriality, however, cities can never really be people-based entities in that sense. Harvard economist Edward Glaeser, an advocate for policies that are first about people, is realistic about the choices facing local policymakers. As he put it in an article for City Journal, “No mayor ever got re-elected by making it easy for his citizens to move to Atlanta, of course, even when that might be a pretty good outcome for the movers themselves.” In other words, we should understand that local leaders will always be place-focused. It’s inherent in the job.

For their parts, state and federal governments need to recognize and shape the right oversight and incentive structures around localities to account for this. First, this would mean reducing incentives for local governments to rack up huge debts and liabilities. While I am a strong proponent of greater local autonomy in many areas, there should be strict state oversight to prevent the accumulation of excess debt or unfunded liabilities by local government.

Second, state and federal place-oriented aid should, as often as possible, be directed to relieving burdens rather than to speculative “build it and they will come” endeavors. Rather than subsidizing real estate projects and the like to try to restart growth, another approach to fiscal stabilization is to deal with some of the major liability issues directly.

One example is combined sewer overflows. In many older cities, both stormwater runoff and sanitary sewage flow through the same pipes. In heavy rains, these can overflow into local waterways. Under the Clean Water Act, cities and sewer districts are required to substantially eliminate these. But that can cost billions of dollars. For the most part, this will fall on the citizens living in that service territory in the form of higher rates.

If aid were directed to helping pay for these costs instead of going to more speculative projects, this would hold down utility rates that hit low-income people the hardest, and it would contribute to improving the cost profiles of these places that have driven people to the suburbs or out of the region entirely.

States and the federal government, by changing incentive structures and helping localities that face true place-based challenges, can hopefully produce an environment in which the focus of local leadership shifts toward the more people-based endeavors, such as education and other human services.

Aaron M. Renn |  Columnist | Article Source at Governing

Pew Research: Three-in-Ten U.S. Jobs Are Held by the Self-Employed and the Workers They Hire

Self-employed Americans and the workers they hired accounted for 44 million jobs in 2014, or 30% of the national workforce, according to a Pew Research Center analysis of data the U.S. Census Bureau recently made publicly available for the first time. The self-employed, 14.6 million in all, represented 10% of the nation’s 146 million workers, and they in turn provided jobs for 29.4 million other workers.

ST_2015-10-22_self-employed-01

Entrepreneurship and the role it plays in job creation is an issue of keen interest to policymakers. Self-employed workers, who work for profit or fees in their own business, encompass many of the nation’s entrepreneurs.1 Although much is known about how many and which workers are self-employed, far less is known about their job creation activities. This report attempts to fill this gap with estimates of the number of workers on the payrolls of the self-employed in 2014 and how job creation varies with these business owners’ demographic characteristics.2 

Read more here at Pew Research Center.