In the Age of Big Data, Fears Arise the Trump Administration May Cut Off Some Important Data Sources

How Trump’s White House Could Mess With Government Data
Claire Malone
Five Thirty Eight

Outright manipulation may be unlikely, but there are subtler things the administration could do.Numbers and data are a backbone of modern life. We cite them buzzily at bars and soberly to bosses so often that “studies show” might as well be given its own entry in the dictionary. Much of what we cite comes from government data — weather patterns, the population or average income of a city, even honeybee activity — collected across innumerable departments, agencies and centers, then made public.

Now, watchdogs are worried that a Donald Trump administration could erode the quality of government data collection and systems. Transparency advocates have raised the possibility that a Trump administration could simply remove data sets. But they have a more foundational worry that the the integrity of U.S. government data could be compromised more subtly and more systematically over the next four years.

Certain steps being taken by the president-elect’s transition team have raised alarm bells for some who worry that Trump’s glibness with the truth could take root in a more institutional form. Trump’s nominee for EPA administrator, Scott Pruitt, is a climate change denialist. His choice for director of the National Economic Council, Gary Cohn, once called the U.S. employment rate “a very, very fictitious rate.” And last week, Bloomberg reported that the Trump transition team sent a memo to the Department of Energy requesting the names of employees involved in determining climate change metrics and asking the Energy Information Administration “in what instances the EIA’s independence was most challenged over the past eight years.”

Widespread government data tampering remains unlikely given the vast numbers of career bureaucrats working across agencies, according to Alex Howard, senior analyst at the Sunlight Foundation, an open government advocacy organization. But Howard said that Trump’s refusal to release his tax returns could signal that Washington will operate within a new paradigm. “What that tells us is that unless there’s a statutory requirement, there are norms that can be bucked,” he said. Some data, like the Census, is collected and protected by law, but not all of it.

What does have observers worried are two things in particular: budget cuts that could significantly impact data collection and quality, particularly within the government’s statistical agencies — those that produce key economic indicators like the Bureau of Labor Statistics and the Bureau of Economic Analysis; and the willful miscommunication of scientific research that proves politically inconvenient to the White House.

Read more here.

Working Learner Workforce Development Model

Economic developers should focus their efforts on creating working-learning ecosystems to attract, retain and expand businesses. A new training guide from IEDC highlights this as one of several ways to close the skills-gap in America.

“Technological innovations are rapidly changing the way we as economic developers practice workforce development. This new research provides a guide to up-skilling workers in a variety of communities to fit business and industry needs as they shift focus.” – Barry Matherly, CEcD, FM, IEDC 2016 Board Chair, President & CEO of the Greater Richmond Partnership.

The guide is from a series of trainings offered at IEDC’s 2016 conferences called, “Chutes and Ladders; The New Rules of the Game for Up-skilling Workers,” which were focused on how improving the system of up-skilling and experiential learning in communities builds a resilient workforce. The guide was released at IEDC’s Annual Conference in Cleveland, OH, in September, and addresses the new challenges arising for economic developers, especially in workforce development.

The report discusses how traditional educational structures have not kept up with the effects of changes due to technology and rapidly globalizing markets have had on workforce development. In order to stay competitive, workers are seeking learning and up-skilling opportunities to either pivot out of careers that no longer serve them or move to higher positions. Meanwhile students are increasingly exposed to the working world through internships, apprenticeships, co-ops or career fairs.

The report also explains that the idea of “working-learning” describes activities that many economic development organizations (EDOs) are supporting, and that a unified working-learning system is a key component to attracting, retaining and expanding businesses in a community. The guide recommends creating an ecosystem that integrates programs across all levels and institutions, with a focus on how EDOs can support working-learning systems that allow workers to gain skills to use new technology, rather than be replaced by it. Best practice examples are included in the report as case studies from across the country.

The training guide is available for download.

Filling Empty Spaces, Supporting Entrepreneurs: An Econ Dev Match Game

By Eli Dile, International Economic Development Council

It’s no secret that Detroit has a good-sized inventory of underperforming real estate. However, it also has a citizenry with a lot of good business ideas that need a boost to be realized. Why not take on both issues at once?

That’s exactly what the Detroit Economic Growth Corporation (DEGC) has done through Motor City Match, a two-pronged initiative matches entrepreneurs with underutilized commercial space, and provides them with cash and support services as well.

The words “Detroit” and “renaissance” appear together quite frequently these days. And while big downtown investments grab headlines, it’s programs like Motor City Match that help ensure growth is equitably shared.

“We recognize that national credit tenants won’t go into certain neighborhoods,” said Rodrick Miller, president and CEO of DEGC. “But small businesses are the stabilizers of neighborhoods, and a source of good jobs for residents. Motor City Match supports these businesses with a complete suite of services.”

“Figure it out”

The idea for the program came out of a challenge from Mayor Mike Duggan. Michael Forsyth, DEGC’s director of small business services, recalls the meeting as follows: “He told us, ‘I want to build Detroit’s brand as the entrepreneurial capital of the world, and I want a business competition to do it. Figure it out.’ And that was about the extent of the meeting.”

The result was Motor City Match (MCM), a business competition with two ways to participate – either as an entrepreneur or a property owner. It’s a symbiotic program in which business owners receive space, grants or support services, and property owners gain new rent-paying commercial tenants.

Unlike many small business programs that simply provide gap financing to creditworthy applicants, Motor City Match offers comprehensive support no matter the stage of a business’s maturity. Business owners and entrepreneurs can participate in one of four tracks:

Business plan: In this track, first-time entrepreneurs receive help transforming their business idea into a plan. MCM offers up to 50 entrepreneurs free business planning classes each quarter.

Space: For proprietors with a strong business plan or a track record of success that are searching for space, MCM matches applicants with properties in its portfolio. It also provides guidance on leasing, financing planning, and market opportunity assessment.

Design: Business owners and landlords who have recently signed a lease but need help planning renovations and tenant improvements can receive design assistance from a professional architect, as well as priority permitting.

Cash: Business owners that have a location secured, a plan for build-out, and strong understanding of the money needed to complete their project prior to opening are eligible for grants as gap financing. MCM disburses up to $500,000 in grants each quarter (thanks to corporate and foundation sponsors).

For DEGC, the goal isn’t just to write a check, but to build an entrepreneurial pipeline through comprehensive support services. For example, fledgling businesses often face significant renovation challenges, which is where the design track can help. MCM helps business owners work with architects to improve frontages, build out space, or make other aesthetic improvements. The program provides up to $15,000 for such renovations.

Since Motor City Match launched in April of 2015, the program has helped eight new businesses open, and seven more are under construction. It has provided assistance to hundreds of additional businesses at all stages of maturity.

“In Detroit, if you have an idea, the city will actively invest in that idea,” Forsyth said.

Diverse results

Minority participation is another metric by which MCM measures its success. Seventy-two percent of businesses that have received awards are minority-owned, and 52 percent are minority women-owned.

The program also has achieved diversity in the types of businesses it supports. MCM winners have included retailers, food service businesses, hair care and cosmetic companies, a music studio, a co-working space, and a vertical farming operation, among others. Preference is given to businesses that would have a positive impact on the broader community. One of the grand prize winners of $100,000 was J&G Pallets, a company that began making wooden pallets in the proprietor’s garage and has since grown into a million-dollar business supplying some of Detroit’s largest companies. J&G Pallets hires many individuals that have faced barriers to employment, such as the formerly incarcerated. Another grand prize winner was the Detroit Training Center, which provides skills training for high-demand jobs in the construction trades.“We wanted out awardees to look and feel like Detroit,” Forsyth said. “The competition platform has enabled us to find those people. Or, I should say, them to find us.”

Another benefit has been a strengthened real estate portfolio. MCM helped identify more than 200 spaces representing two million square feet of development opportunities. Some of the more impoverished neighborhoods lack an active brokerage community, and much of the property there was unrepresented. In many cases, the city had no idea what condition the property was in, much less who owned it. Much of this real estate is now accounted for and represented on an easily navigable map that other interested investors also can peruse.

The benefits of competition

Pulling off a business competition of this scale four times a year is no easy feat.

“The quarterly schedule is…relentless,” Forsyth admits. Still, it’s not fast enough for businesses, who eagerly apply en masse each quarter. Yet the frequency allows DEGC to improve after every round, and the competition format makes DEGC’s job easier because it encourages businesses to approach them.

That means DEGC doesn’t have to do much marketing for the program. “It’s like fishing with a net rather than a pole,” Forsyth said. “When businesses help recruit and grow other businesses, you count that as a victory.”

Motor City Match offers a model in which to allocate scarce resources. The competition platform allows economic developers to connect with the most-motivated entrepreneurs that have the highest potential impact. Furthermore, the process is fair, transparent, and efficient. Businesses know when to apply, when award decisions are made, and where they stand in the process. And ultimately, it’s just good marketing.

“We have something to talk about every quarter,” Forsyth said. “There’s an energy about it that’s really special.”

Also critical to Motor City Match’s success are its corporate and philanthropic partners, who underwrite the program and assist during judging. Not only does this ease the burden on DEGC during application review, but it introduces lenders to a pool of potential lendees.

For a city that’s seen its share of disinvestment in recent years, Motor City Match is showing Detroiters the value of investing in each other.

“It’s been great to have people come together and rally around the project as a whole,” Forsyth said. “From lenders to our foundation community to the mayor’s office to the single mom who’s ready take what she learned on the job and do her own thing and be her own boss, it’s great to see the community that’s come out of it.”

Economists are underestimating the costs of letting small Rust Belt cities shrink

If you ask economists what to do for struggling towns in the Rust Belt, a lot of them have a simple answer, according economist Adam Ozimek: nothing. Economists focus on helping people, not places. And often the best move for someone in a declining town is to find a new job in a different city where jobs are more plentiful.

But Ozimek argues that they’re making a mistake. He says that small, economically struggling places have value that’s not always captured by simple economic models.

This isn’t just a theoretical question for Ozimek, an economist and blogger who lives in the small city of Lancaster, Pennsylvania. He lives close enough to Philadelphia that he can drive to the offices of his firm, Moody’s Analytics, in the Philadelphia suburbs in about an hour. But many days he works from home, enjoying the low cost of living and other benefits of life in a small city.

Rather than dismissing small cities and towns, Ozimek argues that economists and policymakers should be thinking harder about how to support them. That’s good for the people who will inevitably be left behind if these areas continue to lose population. And it may even be better for the US economy as a whole.

Read more here.

Trump Administration to Rev Up Global Growth, Says OECD

If all goes according to plan, a group of international economic experts believe President-elect Donald Trump’s incoming administration will help the world economy grow faster than anticipated over the next few years.

The Organisation for Economic Cooperation and Development on Monday revised its growth outlook for the U.S. and the world economy as a whole. Thanks in part to expected tax cuts, fiscal policy revisions and infrastructural investments, the group now expects the American economy to grow 2.3 percent in 2017 and 3 percent in 2018. For perspective, the U.S. economy is expected to grow only 1.5 percent this year, according to the report.

Read more here.

Donald Trump on the Economy

From Donald Trump.com

DONALD J. TRUMP’S VISION

  • Create a dynamic booming economy that will create 25 million new jobs over the next decade.
  • For each 1 percent in added GDP growth, the economy adds 1.2 million jobs. Increasing growth by 1.5 percent would result in 18 million jobs (1.5 million times 1.2 million, multiplied by 10 years) above the projected current law job figures of 7 million, producing a total of 25 million new jobs for the American economy.
  • Reform policies with a pro-growth tax plan, a new modern regulatory framework, an America-First trade policy, an unleashed American energy plan, and the “penny plan.”
  • Boost growth to 3.5 percent per year on average, with the potential to reach a 4 percent growth rate.

Read Donald J. Trump’s Plan to Create 25 Million Jobs, here.

Read Mr. Trump’s Remarks in Monessen, Pennsylvania, at the Detroit Economic Club, and at the New York Economic Club.

KEY ISSUES

  • Over the last seven years, 14 million more people have left the labor force.
  • The lowest labor force participation rate since the 1970s.
  • 1 in 5 American households do not have a single family member in the labor force.
  • 23.7 million Americans in their prime-earning years [ages 25-54] are out of the labor force – an increase of 1.8 million over the last seven years.
  • Real GDP grew only 1.1% in the second quarter of this year. Over the last seven years, real GDP grew 2.1% the slowest seven-year period since at least the 1940s.
  • It’s the weakest so-called recovery since the Great Depression.
  • Hourly earnings and weakly earnings are lower today than they were in 1973.
  • The number of Americans on Food Stamps during Obama’s time in office has increased by more than 12 million.
  • 2 million more Latinos are in poverty today than when President Obama took his oath of office less than eight years ago.
  • 45% of African-American children under 6 are living in poverty.
  • 1 in 6 American men between the ages of 18-34 are either in jail or out of work.
  • Student loan debt exceeds $1.3 trillion — nearly doubling under the Obama administration.
  • Since President Obama took office, the national debt has doubled.
  • U.S. trade deficit in goods reached nearly 800 billion dollars last year alone.
  • The U.S. homeownership rate fell to 62.9 percent in the second quarter – the lowest rate in 51 years.

IEDC: The Trump Administration and Economic Development

Here is an interesting repost from IEDC.

President-elect Donald Trump has made good on a campaign pledge to fight the offshoring of U.S. jobs.

Trump announced earlier this week that he had negotiated a deal with Indianapolis-based Carrier, an air conditioner manufacturer, that would keep some jobs in Indiana that the company intended to offshore to Mexico (New York Times). In exchange for a state tax incentive of an undisclosed amount, Carrier, a name that went viral earlier this year when an employee recorded the company’s layoff announcement, will keep roughly half (1,000) of those jobs at its U.S. facility.

It’s certainly rare for the (soon-to-be) highest-ranking member of the federal government to involve himself directly in matters typically handled by local and state economic developers. Whether the move is indicative of an ongoing strategy for the new administration is still unclear; the Carrier deal is just a drop in the bucket in a sector for which automation is a far greater threat to jobs than offshoring. What policies the new administration plans to adopt to encourage job creation and retention on a larger scale remains to be seen, but the announcement has led to speculation on how the Trump administration will impact the work of economic developers.

Mark Barbash of the Council of Development Finance Agencies sees potential positive and negative effects stemming from a more hands-on approach from the federal government. Some of the good could be more federal dollars for business retention, either directly on a company-by-company basis or through a larger budget for the Economic Development Administration. Some of the negatives could be an emboldening of companies to threaten offshoring unless they are granted lucrative tax breaks. And a focus on large, already-profitable companies could come at the expense of initiatives that support small businesses, workforce development, and innovation.

At the very least, the announcement is likely to intensify the incentives debate (Washington Post).

IEDC: Is the skills gap an illusion?

Educators are failing students because they aren’t training them in the skills needed to fill open jobs: This is the commonly accepted narrative surrounding the “skills gap,” and the explanation for why companies are slow to hire even though plenty are looking for work. The Pew Charitable Trusts has taken a microscope to the issue of slow hiring in the United States in a three-part series called “Help Wanted: Why Willing Workers Aren’t Filling Open Jobs.” The skills gap is dissected in part one, challenging the idea that more training is the solution to employers’ hiring woes. Several alternate explanations are put forward:

1. Employers are too picky: Some are holding out for a fully trained worker with previous experience in a similar positions (but employers are unwilling or unable to pay enough to secure these individuals).

2. Many vacant jobs are not “good jobs:” Sometimes they are in rural areas or have undesirable shifts.

3. Some jobs don’t pay enough: Additionally, employers don’t always realize their wages are low. As the article notes, “Only 22 percent of employers surveyed by Utah’s Department of Workforce Services last year named low wages as a hiring problem, but 68 percent of those employers were offering below average wages.”

4. Decline of unions: Unions traditionally negotiated pay and conducted skills training, but their stature and membership has dwindled in recent decades.

5. An unwillingness to consider candidates with a criminal record or inability to pass a drug test: Although some employers would like to hire these individuals, liability concerns with their insurance providers prevent them from doing so (Wall Street Journal).

Here are some of my own thoughts on this issue. We assume that business owners and managers know what’s best for their businesses. That is not always the case. Many businesses are strategy-less. Many businesses do not have a human resource strategy, or their strategy is to make as much money as possible on the backs of the workers. Many employers do an inadequate job of developing and managing human resources.  Smart employers have adopted business models that are human resource-driven. It’s all about talent, innovation, and productivity in the future. It’s not about simple low-paying jobs.