by Ryan Streeter on July 22, 2015. Follow Ryan on Twitter.
In their editorial yesterday on how well Texas’s diversified, low-cost economy has weathered the downturn in oil prices, the Wall Street Journal editors note:
[I]n Austin, which has little exposure to the energy industry, business other than government is booming. May job growth surged at an annual rate of 6.6%, including “a significant increase in high-paying scientific and technical services jobs.” Texas is now America’s top technology exporter, surpassing long-time leader California. [emphasis added]
The quote and data come from the Dallas Fed Beige Book.
Another interesting thing to note about tech enterprises is how they spur job growth in business services. Note in this Kotkin/Shires article how employment growth in businesses services outpaces tech growth but seems to be centered in cities with good tech numbers, since that’s where so much opportunity and action is.
by Ryan Streeter on July 20, 2015. Follow Ryan on Twitter.
Whether or not it is a problem that a rising share of men do not want a job depends on the reasons for this increase. Certainly the increasing number of men receiving federal disability benefits bears scrutiny and offers another way for policy to encourage opportunity-promoting incentives.
That is Scott Winship’s conclusion at the end of an otherwise fairly optimistic (as is Scott’s wont) account of work patterns among Americans under 25. This piece is a condensed version of testimony Scott delivered before the JEC.
In her testimony at the same hearing, Aparna Mathur said:
If workers are too discouraged about the prospects of finding a job, the labor force participation rate for the U.S. economy will continue to decline. This is exactly what we see in the data.
Scott accounts for the relationship between education and work participation, namely that the drop in participation among younger workers is because many of them are in school, which is a good thing. But he and Aparna are right to shine a light on, first, the role that our disability programs may be playing in keeping people detached from meaningful work and, second, how other sources of discouragement (taking part-time work because you can’t find a job in the field for which you are qualified or in which you are interested) are creating problems. These are two of the most important questions for research and policy debate on labor markets going forward, I think. Somewhere deeply embedded in all of this are questions of how and whether a sense of purpose, in the Aristotelian sense, has been on the decline because of the nature of work and its relationship to other things we care about.
Where have all the workers gone? U.S. participation rate falls below Japan’s, Germany’s, and the UK’s
by Ryan Streeter on July 3, 2015. Follow Ryan on Twitter.
The work participation rate in the U.S. continues to be a puzzler. It’s at its lowest in 40 years, and nearly 100 million people over the age of 16 are not in the workforce.
It’s especially puzzling because it has continued to decline as economic conditions have improved and, as Jim Pethokoukis points out, it is now lower than other advanced countries.
by Ryan Streeter on June 21, 2015. Follow Ryan on Twitter.
I was perusing the latest NFIB survey of small businesses (PDF) in America and was struck by the following two charts.
Regulation has spiked dramatically since 2008 as the #1 concern in the following collection of problems facing business owners.
It’s interesting to note that insurance concerns, which spiked in the early aughts, began falling in 2005 before the debate over Obamacare began.
In the following list, taxes have assumed their place at the top, displaced by sales only because of the Great Recession. What’s also interesting is the generally inverse relationship between sales and labor quality. The latter has displaced the former recently as a concern, which matches the “skills mismatch” problem we hear so much about these days.
by Ryan Streeter on June 21, 2015. Follow Ryan on Twitter.
Our knowledge economy is driven significantly by companies built on the use, sale, and distribution of information. These are largely tech, media, and communications companies. Where are they adding jobs the fastest?
The top two metro areas are San Jose and San Francisco. No surprise there. What about the rest?
Some of the most rapid growth in information, however, is taking place not in the older established tech hotbeds but in the lower-cost metropolitan areas of the Sun Belt. Five of our top 10 ranked metropolitan areas are located in the belt that stretches from the Atlantic coast to Arizona, led by No. 3 Austin-Round Rock, Texas, where information employment has risen 30.8% since 2009 to 25,800 positions.
That’s from the latest ranking by Joel Kotkin and Michael Shires. Here are the top 20 largest metro areas in the U.S.:
In terms of the size of their economies, that is.
Mark Perry at AEI has just produced one of those cool maps (see below) showing which country’s economy most closely approximates which U.S. state. He writes:
Overall, the US produced 22.5% of world GDP in 2014, with only about 4.6% of the world’s population. Three of America’s states (California, Texas and New York) – as separate countries – would rank in the world’s top 14 largest economies. And one of those states – California – produced more than $2 trillion in economic output in 2014 – and the other two (Texas and New York) produced more than $1.6 trillion and $1.4 trillion of GDP in 2014 respectively.
by Ryan Streeter on June 10, 2015. Follow Ryan on Twitter.
The Boomers are a startup-happy bunch — over the past decade, the portion of founders in their 50s and 60s has increased, according to Kauffman data. By contrast, the portion of 20- and 30-year-old entrepreneurs has declined. In 1996, young people launched 35 percent of startups. By 2014, it was 18 percent.
That’s from the best recent article I’ve seen in awhile on the multiple factors that seem to be affecting the decline in new, young companies in America. The generational issue is only one of several.
Here are a couple of other important data points:
Given that existing American companies opened roughly 50 percent more branches in 2011 than they did in 1978, the challenge for startups is clear. Back then, 80 percent of “new establishments” were startups; the rest were new locations of existing businesses, according to data from the Federal Reserve Bank of Cleveland. Today, that number is down to 60 percent…
[T]ech companies today achieve market-cap milestones — $500 million, $1 billion, $5 billion — three times faster than they did 15 years ago. Almost as soon as they are invented, major categories are dominated by what Play Bigger calls “category kings,” which own 70 percent or more of the market share…
Size isn’t the only problem; longevity plays a role as well. The share of companies ages 16 or older has increased by about 50 percent since the late ‘70s, according to Brookings…
[B]etween 2005 and 2014 the size of seed investments made by VCs stayed flat. The size of C, D, and E rounds, by contrast, roughly doubled. The number of small seed rounds has recently dropped, according to PitchBook, with investments below $500,000 declining 61 percent between the first quarter of 2013 and the fourth quarter of 2014.
by Ryan Streeter on June 9, 2015. Follow Ryan on Twitter.
This essay in Washington Monthly by Monica Potts weaves together a number of interesting and important threads in the ongoing story about how the world has changed for millennials compared to their forbears. She writes:
Many Millennials—including me—are no longer working full-time jobs but are instead making do with the gig economy, part of the contingent job market that is comprising a bigger and bigger share of the labor force. By some estimates, contract employment made up fully half of the jobs added after the recession, and contract workers are currently 40 percent of the labor force…
Marriage—and the two incomes it provides—could stabilize life for many Millennials, but the irony is that most young people say they want to wait to get their finances in order before they get married…Many women…fear being overly dependent on a husband’s money. We learned, perhaps too well, the lessons of previous generations of women, some of whom, struggling to balance home and work, scaled back jobs and relied on their husband’s earnings only to be left financially devastated by divorce. In addition, many of the young men in this generation barely earn enough to support themselves, let alone a wife and children…
Without a marriage and children, there’s less pressure to settle down and buy a home, and Millennials are delaying that, too. Even the oldest Millennials aren’t buying homes at the ages previous generations did. They’re the biggest driver of the decline in homeownership, and the wealth of households headed by someone under the age of thirty-five is down 41 percent from where it was for the same type of households in 1995.
by Ryan Streeter on June 8, 2015. Follow Ryan on Twitter.
The Texas population growth story underscores the fact that the state is, broadly speaking, a pretty nice place to live.
Its infrastructure is not decaying. Indeed, despite lower taxes the major roads in Texas are far nicer than those in the northeast. The airports are functional. Dallas and Houston are both building out their rail transit systems. African-American and Latino kids do better in school in Texas than they do in the average state. The University of Texas is an extremely well-regarded public university. And if a coastal liberal starts rolling his eyes at the idea of Texas being a nice place to live, just ask him about Austin — a city that is very much subjected to the same conservative governance as the rest of the state.
That’s left-of-center writer Matt Yglesias presenting his readers with a “don’t write off Rick Perry just yet” piece, based on his view that Perry has the best story to tell of any of the GOP 2016 contenders.
by Ryan Streeter on June 5, 2015. Follow Ryan on Twitter.
The 2015 “Best Cities for Jobs” is out and has some interesting findings:
[T]here’s been a striking reversal of fortune in the greater Washington, D.C., area, while the greater New York area has also fallen off the pace. In the years after the crash, soaring federal spending pushed Washington-Arlington-Alexandria to as high as fifth on our annual list of the best cities for jobs; this year it’s a meager 47th, with job growth of 1.5% in 2014, following meager 0.2% growth in 2013, while Northern Virginia (50th) and Silver Spring-Frederick-Rockville (64th) also lost ground, dropping, respectively, five and 15 places.
“Opportunity cities,” the authors argue, continue to dominate because they combine attractive job opportunities with affordability.
The combination of lower prices and strong job opportunities are what earns them our label of “opportunity cities.” The Bay Area may attract many of the best and brightest, but it is too expensive for most. Despite the current boom, the area’s population growth has been quite modest — San Jose has had an average population growth rate of 1.5% over the past four years. In contrast, seven of our top 10 metro areas, including third place Dallas-Plano-Irving, Texas, and No. 4 Austin, Texas, are also in the top 10 in terms of population growth since 2000. If prices and costs are reasonable, people will go to places where work is most abundant.
Here are the rankings for the top 20 largest cities: