Archive for April, 2007

Richard Florida
by Richard Florida
Fri Apr 27th 2007 at 5:39pm UTC

New Numbers on Foreign Born Workers

Friday, April 27th, 2007

News from the Bureau of Labor Statistics on foreign-born workers.

Foreign-born workers’ share of the U.S. workforce continued to grow, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. In 2006, foreign-born workers made up 15.3 percent of the U.S. civilian labor force age 16 and over, up from 14.8 percent in 2005.  The unemployment rate for the foreign born fell for the third year in a row, to 4.0 percent in 2006.  The jobless rate of the native born also continued to decline, decreasing from 5.2 to 4.7 percent over the year.

While the Melting Pot index (foreign-born population) is highly correlated with a Creative Class population, the story points out some of the limits of this relationship.

A smaller proportion of foreign-born than native-born workers was employed in management, professional, and related occupations, 26.4 versus 36.4 percent.  Foreign-born workers were more likely than their native-born counterparts to be employed in service occupations (22.5 versus 15.4 percent); these included food preparation and serving related occupations and building and grounds cleaning and maintenance occupations.  Foreign-born workers also were more likely than native-born workers to be employed in natural resources, construction, and maintenance occupations (16.5 versus 10.0 percent), and in production, transportation, and aterial moving occupations (16.7 versus 11.9 percent).

Full story here.

posted by Kevin Stolarick

Richard Florida
by Richard Florida
Fri Apr 27th 2007 at 9:22am UTC

Creative Class & Income

Friday, April 27th, 2007

Some numbers for you (based on current 2005 OES Data).

Total Employment (millions)
Creative Class33.7(31%)
Service Class50.0(46%)
Working Class25.5(23%)
Total Wages ($ billion):
Creative Class2,103(49%)
Service Class1,309(31%)
Working Class850(20%)
Total Discretionary(*) Income ($ billion):
Creative Class474(69%)
Service Class119(17%)
Working Class93 (14%)
These numbers are only for Metropolitan areas.

(*)Discretionary income and disposable income are not the same but are often used interchangeably. Disposable is just income (after taxes). Discretionary is income minus taxes minus the "costs of living". Estimate based on each region’s average wage for each class applied to a quadratic estimating equation (y = 1.9322 - 0.1102x + 0.0048x2) calibrated from reported discretionary spending by income level.

So, we can upgrade the 30-40-50 rule to be the 30-40-50-70 rule.

The U.S. Creative Class is …

  • 30% of the workforce
  • 40 million people (across entire country)
  • making 50% of all earnings
  • and having 70% of all discretionary income
  • Posted by: Kevin Stolarick

Richard Florida
by Richard Florida
Thu Apr 26th 2007 at 10:32am UTC

Building a Better Mouse House

Thursday, April 26th, 2007

Kimberley Palmer has a piece (Hat tip: MickeyNews.com) in US News & World Report offering some examples of strategies companies are employing to increase their creativity. From the article,

"Many people think of creativity as a spontaneous process that happens
naturally. Marty Sklar, executive vice president of Walt Disney
Imagineering, the group that designs Disney theme parks, knows better. Sklar holds regular "gag sessions" where all kinds of ideas are
encouraged and none are dismissed as stupid. He provides employees with
time and budget restrictions so they don’t waste energy on the
impossible. And he seeks diverse perspectives from employees ranging in
age from their early 20s to late 80s. "It’s about listening and
bringing out the best in people," he told participants at a conference
recently. Those strategies helped create Epcot’s spacecraft simulator,
the Magic Kingdom’s Haunted Mansion, and a new Disney resort in Hong
Kong."

Does your firm or organization use any special tools or methods to increase creativity or is creativity just expected to happen?

posted by David

Richard Florida
by Richard Florida
Thu Apr 26th 2007 at 8:00am UTC

By the Numbers: Income Gap – Men vs. Women

Thursday, April 26th, 2007

This week the American Association of University Women released a study that revealed that pay inequality between men and women still exists.

"The research also shows that ten years after graduation, college-educated men working full time have more authority in the workplace than do their female counterparts. Men are more likely to be involved in hiring and firing, supervising others, and setting pay."

You can see the press release and study here.

For this week’s By the Numbers, we’ve examined which metros have the smallest and largest  income gap between men and women.  We utilized the U.S. Census American Community Survey as the primary data source and segmented regions by their size – large, medium, mid-sized and small.  In all U.S. metros, the incomes of men were higher than those of women.  Below, is a summary chart of which metros had the the smallest and largest income gap between men and women.

Metro SizeSmallest Income GapLargest Income Gap
LargeLos Angeles, CASt. Louis, MO
MediumFresno, CABaton Rouge, LA
Mid-sizedSanta Barbara, CAProvo, UT
SmallHanford, CANew Iberia, LA

Click below to see the full report.

Download incomegap.pdf

What surprises you? Do you see any trends?  Let’s get the discussion going!

posted by: steven

Richard Florida
by Richard Florida
Thu Apr 26th 2007 at 7:53am UTC

The Real Cost of Education

Thursday, April 26th, 2007

Education (human capital) solves all our problems, right?  Right??  It increases income, leads to growth, generates innovation, and is the reason cites from New York to Topeka to Seattle chase recent college graduates.  Right??

So, Charlotta Mellander and I decided to take a look.  Using the new Forbes Billionaires list [hat tip Chi Chi Hoffner for digging through and beyond the list to pull together the data], Charlotta and I took at a look at the education levels of the world’s billionaires.  Forbes reports that the average net worth of individuals on the Forbes 400 with a college degree is $2.13 billion.  But, the average net worth of individuals on the Forbes 400 without a college degree is $2.27 billion.  Apparently, the cost of a degree isn’t just the $100,000+ you will have to dish out for the degree — it also costs you another $140 million dollars.

For the U.S., roughly 27% of the population has at least a four-year college degree.  For the Forbes 400, 66% of those on the list have at least a four-year degree and 33% do not.  If we look at just the top 50 billionaires (average net worth $19.4 billion), we find that 37% of them do not have a college degree (average net worth $21.3 billion) while 63% of them do (average net worth $18.7 billion).  So, for the top 50, the college degree costs a mere $2.6 billion  Of course we all know about Bill Gates and Michael Dell, but let’s not forget about Warren Buffet (MBA, Columbia) and Steve Ballmer (BS, Harvard; MBA, Stanford – dropout).  However, many of the billionaires on Forbes’ list are second generation or more.  So, if we consider inherited wealth, what happens to the numbers?

Of the 24 of the top 50 who inherited their billions, over 71% have a college degree.  Of the 26 who worked for their billions, just under 58% have a college degree, substantially fewer than for all billionaires or those that inherited.  If you didn’t inherit your money, the degree cost you $4.7 billion.  (Maybe that’s why Steve Ballmer dropped out of Stanford?)  Those who inherited their money, not only were more likely to get a degree, but it actually benefited them.  Among the 24 in the top 50 inheriting their money, the average net worth is $1.4 billion more if a degree was earned.  Finally, we found a place where the degree pays off — of course it helps a lot if Sam Walton was your father.

Posted by: Kevin Stolarick

Richard Florida
by Richard Florida
Wed Apr 25th 2007 at 6:00am UTC

Fast Food Geography

Wednesday, April 25th, 2007


Hamburger_joint_2

I’m a huge burger lover myself, but this map from Business Week shows a clear pattern. It’s based on a survey of fast food consumption 62 markets by restaurant consultant Sandelman & Associates of fast food consumption.  The Sunbelt is the fast-food capitol, with rates in some places double New York, Boston, Seattle and elsewhere.

The story is here. While you’re at it have a look at sociologist Zach Neal’s terrific article on the geography of restaurants.

Any thoughts on what lies behind this pattern?

Richard Florida
by Richard Florida
Tue Apr 24th 2007 at 11:51pm UTC

Update to April Fool’s

Tuesday, April 24th, 2007

Bw_255x65

The Myth of High-Tech Outsourcing

A new report finds that U.S. demand for IT professionals in 2006 reached levels not seen since before the dot-com bust

But there is so much global demand for employees proficient in programming languages, engineering, and other skills demanding higher level technology knowledge that outsourcing can’t meet all U.S. needs. "There would have been a lot more than 147,000 jobs created here, but our companies are having difficulty finding Americans with the background," says William Archey, president and chief executive of the AeA.

Full story here

It goes on to talk about problems with colleges not producing enough graduates and raising the H1B visa limits as a way to deal with the shortages.

posted by Kevin Stolarick

Richard Florida
by Richard Florida
Tue Apr 24th 2007 at 2:06pm UTC

Location, Location, Location

Tuesday, April 24th, 2007

“It’s not unusual for Sean Watters to wake up and find homeless people passed out on the other side of his kitchen window.  Nothing a good set of blinds can’t hide, says the UofT political science major of the view from his ground-level apartment at Charles and Bay Sts. “I love not having to commute – it’s fantastic,” says Watters, a 23-year-old Ottawa native.

Toronto

The full story is here (hat tip: Kevin Stolarick).

Richard Florida
by Richard Florida
Tue Apr 24th 2007 at 10:28am UTC

The Reckoning*

Tuesday, April 24th, 2007

Reuters reports (Hat tip: Steven Pedigo):

Toyota beat GM in quarterly sales for the first time ever, outselling
its U.S. rival by around 90,000 units in the first quarter, making it
the world’s largest auto maker.

Toyota
I’ve said it for a long time now: Toyota is the exemplary company of the creative age.  Martin Kenney and I first picked up on this nearly 20 years ago in The Breakthrough Illusion our study of high-tech competitiveness and Beyond Mass Production where we examined the power of Japanese production systems and their transplant into the United States industrial heartland that at the time was all but given up for as dead by US manufacturers. Toyota did this not by some great top-down scheme but by empowering its factory floor workers to use their knowledge, intelligence and creativity at the point of production to continuously improve and add efficiency to its processes.  In a classic study, John Krafcik, then a graduate student at MIT (look where he is now) reflected on his own personal experience at the original NUMMI plant, a joint venture between Toyota and GM at the old GM Fremont plant in California. The Fremont plant was one of GM’s worst, with pitiful quality, low levels of productivity, high rates of absenteeism, filled with dysfunction.  Krafcik’s conclusion: Toyota not only turned around the plant with its continuous improvement production system, it learned how to work with and manage US workers. GM, according to Krafcik, learned nada.  It’s amazing how fast and how far the world’s once leading company has fallen.

Now the day of reckoning is finally here, the tipping point has been
breached.  Wait until you see what’s coming. Toyota is not only the
leader in manufacturing efficiency and quality, but now it is combining
high end design and styling with new hybrid power plants for
performance as well as fuel economy.

The problem has long had once source: management. Oh, they have had their excuses. High wages, recalcitrant unions, pensions and healthcare. Nonsense. Toyota, Honda and other Japanese companies showed how workers were not real problem. They used American workers – sometimes the very same workers in the very same factories – to make quality cars American want to buy. The real problem was management. Given the right management and production systems, American workers did just fine.

Everything that was once hidden becomes visible in the crisis. The crisis is now here. It’s abundantly clear where the real problem has been all along – out-of-touch, in-bred, old-boy management. It’s time to clean house.  How can this be done?  Simple, move the headquarters lock, stock and barrel. Relocate somewhere with a diverse array of talent, where competition is fierce, where the best and brightest want to be.  Separate reports are saying that Magna may purchase Chrysler. What a fantastic irony if Chrysler becomes a Canadian company and relocates to Toronto. How long until GM or Ford pick up and move to Chicago or somewhere else?  The clock is ticking.

BTW: This relocation of the Big Three from Detroit, while painful, could be just the kind of crisis that would spur revitalization of that troubled city and region. Boston ultimately recovered from the textile exodus. Pittsburgh may be starting to recover from the trauma in steel and other industries.  Check out this article on University of Michigan professor, Robert Fishman’s research on the potential for a “fifth migration” as  “baby boomers, immigrants, middle-class African Americans and young hipsters begin to colonize inner cities”. Detroit, from what I can see, is certainly one of the truly hippest, trend-setting cities around with a significant creative community in art, music, design and related fields. Plus there is real leverage in connecting  to Ann Arbor, which ranks off the charts on our creativity measures, as well as Windsor. It is part of the giant mega-region with Chicago at its center.  El Paso – a community with which we work closely – is creating a bi-national downtown and economic development framework with Juarez. Imagine a bi-national downtown linking Detroit and Windsor along the waterfront, and a real strategy to leverage the University of Michigan which is perhaps the world’s greatest full-purpose university, along with the region’s other research and university assets from Michigan State and Wayne State to the Cranbrook Art Institute.

*I titled this post in memory of David Halberstam author of a classic study of the auto industry, The Reckoning, among many other terrific books, who died earlier this week.

Richard Florida
by Richard Florida
Tue Apr 24th 2007 at 8:12am UTC

Importance of Job Flexibility

Tuesday, April 24th, 2007

Computerworld reports on a recent trend in the IT industry (a significant component of the Creative Class).  Women are leaving IT jobs for jobs that offer greater flexibility.  Not unexpectedly, both women and the IT industry seem to be leading indicators of a bigger trend.

The U.S. economy is expected to add 1.5 million IT jobs by 2012, according to Department of Labor statistics. At the same time, Stamford, Conn.-based research firm Gartner Inc. predicts that by 2012, 40% of women now in the IT workforce will move away from technical career paths to pursue more flexible business, functional, and research and development careers.

That projection doesn’t bode well for satisfying the projected future demand for skilled women to help diversify and round out teams and the managers that oversee those teams.

Full story here.

In contrast, however, The New York Times has a report that talks about efforts at many universities, including my own Carnegie Mellon, to try and improve the enrollment of women in computer science.

Moving emphasis away from programming proficiency was a key to the success of programs Dr. Blum and her colleagues at Carnegie Mellon instituted to draw more women into computer science. At one time, she said, admission to the program depended on high overall achievement and programming experience. The criteria now, she said, are high overall achievement and broad interests, diverse perspectives and whether applicants seem to have potential to be future leaders.

“In this more balanced environment, the men and women were more alike than different,” she said. “Some women are hackers and some men are hackers, and some women love applications and some men love applications.”

With the changes at Carnegie Mellon, women now make up almost 40 percent of computer science enrollees, up from 8 percent, Dr. Blum said.

Full story here.  (Free sub required?)

So, are we doing them any favors by luring young women in high school into a career in computer science that they will eventually leave for being too inflexible?

Posted by Kevin Stolarick