Archive for April, 2009

Richard Florida
by Richard Florida
Thu Apr 30th 2009 at 11:25am UTC

Crisis Now Tied for Longest Since the Depression

Thursday, April 30th, 2009

With GDP falling at a “hefty” 6.1 percent annual clip, Harvard’s Jeff Frankel parses the data:

The previous record-holders were the recessions of 1973-75 and 1981-82, each of them four quarters in length according to the official NBER chronology. In the current downturn, the NBER’s Business Cycle Data Committee determined that the economy peaked in the 4th quarter of 2007…  The NBER also keeps a more precise monthly chronology. The postwar record is 16 months, again shared by the 1973-75 and 1981-82 recessions. To match this monthly benchmark, the current downturn would have to have continued into April. Our best single indicator as to whether it did so will be the employment number to be released by the Bureau of Labor Statistics next Friday, May 8. It almost certainly will show that there were further job losses in April. If so, it will further confirm the dismal conclusion: one would have to go back 80 years, to the disaster of 1929-1933, to find a longer recession.

Richard Florida
by Richard Florida
Thu Apr 30th 2009 at 11:19am UTC

Atlantic Blogging

Thursday, April 30th, 2009

Next week, I’ll begin blogging as one of a dozen new Atlantic Monthly correspondents, alongside lumnaries like Judge Richard Posner. I am a huge fan of The Atlantic and have published several essays there. I’ll be linking to and cross-posting those posts here.

Richard Florida
by Richard Florida
Wed Apr 29th 2009 at 5:39pm UTC

Obama on Life after the Great Recession

Wednesday, April 29th, 2009

David Leonhardt interviews President Barack Obama for the New York Times Sunday Magazine on the crisis and what the the financial system, economy, society, and life might look like on the other side.

I actually think that there was always an unsustainable feel about what had happened on Wall Street over the last 10, 15 years, and it’s not that different from the unsustainable nature of what was happening during the dot-com boom, where people in Silicon Valley could make enormous sums of money, even though what they were peddling never really had any signs it would ever make a profit.

That doesn’t mean, though, that Silicon Valley is still not a huge, critical, important part of our economy, and Wall Street will remain a big, important part of our economy, just as it was in the ’70s and the ’80s. It just won’t be half of our economy. And that means that more talent, more resources will be going to other sectors of the economy. And I actually think that’s healthy. We don’t want every single college grad with mathematical aptitude to become a derivatives trader. We want some of them to go into engineering, and we want some of them to be going into computer design.

And so I think what you’ll see is some shift, but I don’t think that we will lose the enormous advantages that come from transparency, openness, the reliability of our markets. If anything, a more vigorous regulatory regime, I think, will help restore confidence, and you’re still going to see a lot of global capital wanting to park itself in the United States.

The whole thing is here. The interview shows how focused Obama is on the economy and his grasp of core economic issues. But it’s a little heavy on the current moment and on immediate tactics. I wish – I really wish – Leonhardt would have pushed harder on the issue of broad economic transformation – and that we’d have gotten to hear more of what the President thinks the economy and society will look like after the Great Reset.

Richard Florida
by Richard Florida
Wed Apr 29th 2009 at 9:25am UTC

Social Justice, Creativity, and Cities

Wednesday, April 29th, 2009

This ran recently in The Walrus – a short letter in response to a longer, very interesting article by my esteemed University of Toronto colleague Mark Kingwell. It is just this kind of dialogue that is so very important and needed to make Toronto – and all cities – better, more prosperous, and more just places. I am delighted to be part of such a vibrant, challenging intellectual milieux.

Creative Differences
Mark Kingwell offers up a compelling diagnosis for the declining state of social justice in Toronto (“Justice Denied,” January/February), and it could not be more timely. Recently, my colleague J. David Hulchanski of the University of Toronto’s Centre for Urban and Community Studies released a landmark report on the splintering of Toronto into three separate cities, defined by increasing economic polarization.

But if Kingwell gets Toronto right, he gets me wrong. Perhaps it is because he has been too heavily influenced by certain critical reactions to my ideas. I do not think that cities should be made into playgrounds for what one neo-conservative critic called “homosexuals, sophistos, and trendoids.” My work is based on the premise that every single human being is creative. I note that in advanced countries like the U.S., roughly 30 percent of the workforce is currently engaged in creative occupations (playing a role more or less equivalent to that of the working class during the heyday of industrial capitalism). But I take great pains to point out that this arrangement is untenable in the long run, in that it neglects the creative talent and energy of the remaining 70 percent.

I share Kingwell’s concern about unchecked economies. Global market forces, left to their own devices, are leading to greater economic disparity between countries, regions, and cities, including Toronto. As our city becomes bigger, wealthier, more productive, more innovative, and more of a global player, it also becomes more stratified.

Kingwell rightly points out that this offends our notion of social justice.

But I am interested in identifying not just the problem but the solution, which has led me to look at the laws of motion that power societies. And this, believe it or not, is why I am hopeful. Quite possibly for the first time in human history, the growth of the economy requires further development of human creative capabilities.

I bet on Toronto (moving my family and academic work here) for a reason. While our city is far from perfect, I believe it is the city in the world that is best prepared to engage in this shift, building a society that honors and integrates the creativity of all its people.

Richard Florida
Toronto, ON

CCE Editor
by CCE Editor
Wed Apr 29th 2009 at 8:56am UTC

Conversations in the Arts

Wednesday, April 29th, 2009

On Thursday, April 30, Richard Florida will speak at Columbia College Chicago as part of the institution’s The Founders Lectures.

Conversations in the Arts is the school’s program series that offers in-depth dialogue with some of the world’s most notable cultural figures. Other speakers have included Lauren Bacall, Ben Vereen, Mary Tyler Moore, Julie Andrews, James Earl Jones, Richard Roundtree, Salman Rushdie, and Edward James Olmos.

Who do you consider as three of the top influential cultural figures of your generation?

Michael Wells
by Michael Wells
Tue Apr 28th 2009 at 10:27am UTC

One Nation Under (Your Name Here?)

Tuesday, April 28th, 2009

“Americans not losing their religion, but changing it often” is a headline on CNN.com. It reports on a new study by the Pew Forum on Religion and Public Life that says:

Americans change religious affiliation early and often. In total, about half of American adults have changed religious affiliation at least once during their lives. Most people who change their religion leave their childhood faith before age 24, and many of those who change religion do so more than once. These are among the key findings of a new survey conducted by the Pew Research Center’s Forum on Religion & Public Life. The survey documents the fluidity of religious affiliation in the U.S. and describes in detail the patterns and reasons for change.

The reasons people give for changing their religion – or leaving religion altogether – differ widely depending on the origin and destination of the convert. The group that has grown the most in recent years due to religious change is the unaffiliated population. But this group’s growth seems to have less to do with the belief that science disproves religion than with disenchantment with religious people and institutions. Many people who left a religion to become unaffiliated say they did so, in part, because they think of religious people as hypocritical or judgmental, because religious organizations focus too much on rules or because religious leaders are too focused on power and money. Far fewer say they became unaffiliated because they believe that modern science proves that religion is just superstition.

This follows on a recent Newsweek cover story titled “The End of Christian America” which begins:

The percentage of self-identified Christians has fallen 10 points in the past two decades. How that statistic explains who we are now and what, as a nation, we are about to become.

While there may have been been a 10-point drop, the end is still a ways away – 76 percent of Americans call themselves Christian. This is also from a Pew study, laid out on this website.

All of this reminds me of one of my favorite books of 2001, A New Religious America by Diane Eck. A Harvard religion professor, she discovered that one of the ways immigration is shaping America is by bringing in non-”Judeo-Christian” faiths: Muslim, Buddhist, Hindu and many others. How does “One Nation Under God” apply to non-theistic Buddhists  or multi-theistic Hindus? Her Pluralism Project’s website shows examples of new religions all over the U.S.

We’re in a time of fundamental change in many ways – financial, environmental, political are in the news. But behind the scenes, America, while still the world’s most religious developed country, is re-examining how all of this fits into the REALLY larger picture.

Wendy Waters
by Wendy Waters
Mon Apr 27th 2009 at 8:54am UTC

The Information Age and the Workplace

Monday, April 27th, 2009

There is more data than ever available for human resource specialists, including:

  • The unemployment rates in specific occupations, in specific cities.
  • Employee turnover rates in particular industries, and places.
  • The relationship between particular workplace styles and productivity.
  • Graduation rates in certain fields (and thus the supply of new accountants, lawyers, engineers).

And, within certain large employers such as the big accounting firms, retail chains, or large information technology companies such as Google or Microsoft, further internal data can be scrutinized.

Jason Warner, the VP of HR at Google (and formerly Starbucks), recently pondered the role of enhanced information on the human resources field:

I’m not a statistician, but for large sample sizes at large companies, there is a LOT of information that is just waiting to be discovered by progressive HR organizations who can pull the data and turn it into meaningful information. We had talked about doing this at Starbucks right before I left; running multivariate regression analysis against the thousands of store level staff to better predict attrition and the demographic trends that play out when you have large sample sizes of people.

But HR is rarely predictive. It tends to be more like ‘old medicine’, identifying what is wrong and then prescribing a fix. “You see, your attrition spiked so now we need to recruit more…..” Exit interviews. Employee relations. Compensation reviews. Most all of it analyzes post data.

It is admittedly difficult to be predictive, but it is also because we don’t ask enough smart questions. We ought to be significantly better as an HR function at predicting things. Because predictive HR is a lot more helpful that diagnostic HR.

For example, we can reasonably predict what range the US unemployment level is likely to be in the next 2 years, by comparing the delta in unemployment from the top of the boom in 1999/2000 to the peak in unemployment in 2003 (50 basis points, or 2% points overall) and fudge a little for the gravity of the economic issues that we face. It’s probably going to jump to about 8% (we can now wait and see if I’m right). And from that, HR should be able to extrapolate candidate flow and inform a recruiting strategy and resourcing plan. But the vast majority of groups won’t ever do this.

I expect in the next decade (provided I make it that far), that we’ll see much more predictive HR at the best companies.

I think Warner is right.  Workplaces will start to be shaped by this knowledge.

A firm that has below-average employee retention rates might change up the workplace, offering employees something different.

Maybe we’ll soon know much more about how turnover really affects productivity, for example. The conventional wisdom is the cost to recruit, hire, and train a replacement is very high in terms of dollars and lost productivity. But maybe, based on our discussion here last week, it may be that some turnover is desirable and actually raises productivity through the introduction of new ideas – even best practices – from new employees coming from competitive and complementary firms.

Richard Florida
by Richard Florida
Thu Apr 23rd 2009 at 9:27am UTC

Home-Base Effect

Thursday, April 23rd, 2009

There’s an undeniable home-base effect for leading consumer brands. So, Starbucks does better in Seattle; Wal-Mart in Arkansas; Heinz ketchup in Pittsburgh. Here’s the abstract for the detailed study published in the Journal of Political Economy.

We document evidence of a persistent “early entry” advantage for brands in 34 consumer packaged goods industries across the 50 largest U.S. cities. Current market shares are higher in markets closest to a brand’s historic city of origin than in those farthest. For six industries, we know the order of entry among the top brands in each of the markets. We find an early entry effect on a brand’s current market share and perceived quality across U.S. cities. The magnitude of this effect typically drives the rank order of market shares and perceived quality levels across cities.

Tyler Cowen comments; and Andrew Gelman has maps which depict a similar diffusion away from home-base effect for Starbucks and Wal-Mart.

I wonder though if this is just a home-base effect, as brands take hold where they are established and get picked up more slowly elsewhere, or if there might be another (deeper) process which would explain why certain kinds of brands – say like Starbucks and Wal-Mart – crop up in particular locations to begin with.

Your thoughts?

Kwende Kefentse
by Kwende Kefentse
Thu Apr 23rd 2009 at 4:51am UTC

The Value of an Artist

Thursday, April 23rd, 2009

After returning from the whirlwind that was the CHRA’s Annual Congress (with keynote speaker Richard Florida to boot) and DJ-ing at Urbana – a charity gala put on by a local housing developer to end homelessness in Ottawa – my mind is abuzz with housing issues. While at the congress, we took a tour of Regent Park’s redevelopment and, as with any redevelopment project, there was much talk/concern about gentrification with respect to community renewal.

Meanwhile, on the internet, some blogs were also abuzz with housing issues related to gentrification. From the Clyde-Fitch Report I fished out this Wall Street Journal article about the much-discussed and debated role of artists in community renewal and the gentrification process:

Artists have long been leaders of an urban vanguard that colonizes blighted areas. Now, the current housing crisis has created a new class of urban pioneer. Nationwide, home foreclosure proceedings increased 81% in 2008 from the previous year, rising to 2.3 million, according to California-based foreclosure listing firm RealtyTrac. Homes in hard-hit cities such as Detroit and Cleveland are selling for as little as $1.

Drawn by available spaces and cheap rents, artists are filling in some of the neighborhoods being emptied by foreclosures. City officials and community groups seeking ways to stop the rash of vacancies are offering them incentives to move in, from low rents and mortgages to creative control over renovation projects.

But looking at the artists profiled in the WSJ piece, I couldn’t help but notice – they all seem to be, for lack of a better term, white hipsters doing, again, for lack of a better term, white hipster art. I’m forced to wonder: what do we really mean when talking about artists? What are we valuing?

Here’s another perspective on gentrification from the always sublime blog Model Minority:

Gentrification has very little to do with white hipsters moving into the ‘hood and everything to do with process of people who earn higher incomes moving into neighborhoods where folks reside who are earning comparatively lower incomes.

A more sustainable, honest and comprehensive conversation about gentrification would involve a discussion of the income of the gentrifiers and not just the race of the gentrifiers.

And that’s what the WSJ piece seemed to elucidate implicitly – beyond race or even occupation, the artists valued in the gentrification discourse seem to be more important as an economic entity than as a creative one. Because these blighted areas like the Bronx or Detroit actually generate some of the greatest abundances of high-potency art and artists in the world. Hiphop culture and that entire industry emerged from the 1973 Bronx, and artists are still coming out of the BX at high rates. Detroit breeds some of the world’s best street artists with a lopsided ratio of good music emerging from the 313. What is the difference between them and the museum curator who buys the $100 house down the street? Only that the street artist from the Bronx or the D are actually from the area and are often creating from a position of poverty it seems.

So are the artists we refer to in the gentrification and renewal discourse really more of an economic model – liberal people with fixer-upper money, within a limited margin? Why doesn’t it seem that local street artists who are embedded in the community, often telling the story of the community, don’t have the same renewal/gentrifying value as the sculptor or the graphic designer who move in? And how can we create that value?

And now, as always, some topical music. Video Style:

Richard Florida
by Richard Florida
Wed Apr 22nd 2009 at 5:54pm UTC

Mobility and the Reset

Wednesday, April 22nd, 2009

Fewer Americans are moving than at any point in the past six decades (since the Census Bureau started tracking mobility). Fewer than 12 percent (11.9 percent) of Americans moved in 2008 compared to more than 20 percent in 1984-85. This is the result of the economic crisis and the housing slump which has essentially locked Americans in place. Brookings Institution demographer William Frey told the The New York Times:

“It represents a perfect storm halting migration at all levels, since it involves deterrents in local housing-related moves and longer distance employment-related moves. … [T]he U.S. population, often thought of as the most mobile in the developed world, seems to have been stopped dead in its tracks due to a confluence of constraints posed by a tough economic spell.”

The Economist makes much the same point arguing that housing has turned from “shelter” to “burden” – noting that “the social benefits of home ownership look more modest than they did and the economic costs much higher.”

The Census Bureau also reports that foreign immigration to America is down to its lowest point in more than a decade. Quite a devastating double whammy for the U.S. economy which draws considerable strength from labor mobility and inflows of foreign talent.

Economic recovery will turn on restoring both.