NewGeography.com blogs

Is there any connection between the fact that Salinas has the gang problem that it does, and the fact that Monterey County's restrictions on the building of housing are very strict? I can see why the inhabitants of the Monterey Peninsula might want to protect the coastal strip. But if they apply their policies to the whole county, it becomes very difficult to build any housing. I saw a proposal 40 years ago from Ralph Nader's think tank that would encourage the building of Italian style hill towns along the hills along both sides of the South Santa Clara Valley, thus leaving the lowlands along the river for agriculture; such a plan could be applied to the Salinas Valley as well. I don't have the expertise to draw the connection between restricted housing and the gang situation in Salinas, but surely the situation is worth looking at. What kind of novels would a John Steinbeck write, if he were growing up in Salinas today?

Overall migration rates in America appear to be down in the wake of the Great Recession, reaching the lowest levels recorded since the 1940's. While some statisticians argue that changes in data collection over time have led to an overstatement of such changes, there seems little doubt that "interstate migration has been trending downward for many years," regardless of recent recessionary effects. That said, Americans remain a mobile people. Each year, millions of Americans make an interstate move. While overall migration rates may be down, "the commonly held belief that Americans are more mobile than their European counterparts still appears to hold true." In good times and bad, the draw of opportunity in a new state still remains a siren call for many Americans.

Adding a bit of information on current American migration patterns, Atlas Van Lines, a major American moving company, recently released it's annual data on interstate moves. A plurality of states (24) had a balance between inbound and outbound moves. Magnet states included the upper south (TN and NC), the capital region (DC, VA, and MD), and hubs of energy production, including North Dakota, Texas, and Alaska. Many Midwest and Great Lakes states had more outbound movers than inbound. While the Atlas numbers don't mesh completely with Census migration estimates, they may lend some support to Wendell Cox's argument that domestic migration may be returning to some sort of normalcy. Simply put, people continue to go where they can find work, economic opportunity, reasonable costs of living, and good weather.

Our 8th Annual Demographia International Housing Affordability Survey included the Saginaw, Michigan metropolitan area, which we noted had the lowest Median Multiple (median house price divided by median household income) among the included 325 metropolitan areas. This made Saginaw the most affordable metropolitan market, principally due to depressed economic conditions. Saginaw has been ravaged by the loss of manufacturing jobs and a generally declining economy because of its strong industrial ties to the Detroit metropolitan area.

D. Robertson of Freeman's Bay (Auckland, New Zealand) must think that things are much worse, as indicated by a letter to the editor in the New Zealand Herald on January 24 (The Herald does not post letters to the editor on its internet site). Robertson says that including and prominently reporting the result of Saginaw Michigan (population 297 in 120-odd dwellings) was inappropriate. Robertson makes a 99.9% error, having apparently confused Saginaw, Missouri (population 297) with Saginaw, Michigan. According to the 2010 US Census, the Saginaw metropolitan area has a population of 200,169. That would be substantial enough to qualify Saginaw as one of New Zealand's largest metropolitan areas if it were there.

Kevin Drum of Mother Jones reports on the highly questionable "cost of alternatives" that has been routinely repeated by proponents of the California high speed rail project, in an article entitled "California High Speed Rail Even More Ridiculous than Before."

The mantra goes something like, "yes high speed rail is expensive, but it would cost even more to not build it." Yes, indeed, it is expensive, starting at the low estimate of $98.5 billion the press and proponents usually cite to the nearly $118 billion that the California High Speed Rail Authority itself indicates. Advocates then cite a $171 billion figure as what Californian's would have to pay if they didn't build the line.

Joseph Vranich and I detailed the flaws in this "alternatives estimate" in a Wall Street Journal commentary on January 10 ("California's High Speed Rail Fibs"). We noted that the claim "sets a new low for planning projections in a field that has been rife with abuse." This was a reference to "strategic misrepresentation” ("lying") that has characterized rail project forecasts, according to top European academics.

Drum goes further, calling the claim "jaw-droppingly shameless," an appropriate characterization based upon the method and documentation. He goes on to suggest that "A high school sophomore who turned in work like this would get an F."

Regardless of the views that officials or the public may have on high speed rail, they are entitled to a standard of professional (and taxpayer financed) analysis above "jaw-droppingly shameless."

In a previous post we looked at which states have been most competitive in terms of job creation since the recession.

In this post we teamed up with our friends at Tableau Software to produce the following interactive graphic, which details individual industries that are driving states to be more (or less) competitive. The graphic breaks down the performance of the 20 major sectors in every state in the contiguous US (plus Hawaii and Alaska) in terms of expected and actual job change from 2007-2011. Further explanation of the analysis is below.

Rundown on the data

We used shift share, a standard economic analysis method that reveals if overall job growth is explained primarily by national economic trends and industry growth or unique regional factors. Shift share analysis, which can also be referred to as “regional competitiveness analysis,” helps us distinguish between growth that is primarily based on big national forces (the proverbial “rising tide lifts all boats” analogy) vs. local competitive advantages.

To generate our ranking, we summed the overall competitive effect for each broad 2-digit industry sector by state (e.g., agriculture, manufacturing, health care, construction, etc.) and added them together to yield a single statewide number that indicates the overall competitiveness of the economy as compared to total economy. We calculate the competitive effect by subtracting the expected jobs (the number of jobs expected for each state based on national economic trends) from the total jobs. The difference between the total and expected is the competitive effect. If the competitive effect is positive, then the industries within the state have exceeded expectations and created more jobs than national trends would have suggested. Those industries are therefore gaining a greater share of the total jobs being created. If the competitive effect is negative, then the industries are not gaining jobs as fast as what we would expect given national trends. In this case the state is losing a greater share of the total jobs being created.

Observations On Most Competitive

The big thing that stands out is that most of the competitive states tend to be in the middle of the country. This is tied to the growth in the oil and gas sector, yes, but in most cases better-than-expected performance in construction, government, and other miscellany sectors. In Alaska, North Dakota, and Nebraska, smaller states in terms of population and jobs, manufacturing, transportation, and construction are some of the most competitive industries. Louisiana also fares quite well in healthcare and accommodation & food services.

Observations On Least Competitive

For states that rank toward the bottom, the housing bust and subsequent construction downturn is the biggest culprit. For instance, in Nevada, which is last on the list, construction is nearly 50,000 jobs below what would be expected given national and industry trends. Florida, a much more populous state, is more than 130,000 jobs below what would be expected. For states like Michigan, Ohio, and Indiana, the poor performance in manufacturing and government weighed heavily in our ranking.

Here is the original graphic that show the comparison between states.

Please check out the graphic and let us know if you have any questions. Email Rob Sentz (rob@economicmodeling.com) or hit us via Twitter @DesktopEcon. Data and analysis comes from Analyst, EMSI’s web-based labor market analysis tool.