Chapter 1 Discussion
Blakely, Bradshaw 3rd Ed.
Overview – Trends – Generalizations
Chapter 1: A New Argument for Taking Local Economic Development
Initiatives
The New Economy
Major Shifts:
Technology Orientation – Microcomputer
Information VS Production
Labor
Grew
in the 90s – Leveled Off in the 2000s
Racial
disparity still problematic
Personal Wealth Grew
Personal Debt Grew
Personal Savings Shrunk
Attributes:
Globalization
-
Competitors are scattered worldwide
Products
Finance
and Insurance
Education
Worker
Pools
Accelerated Pace
-
Product Lifespan
-
Move to low cost provider
-
Employment turnover
Knowledge Base
-
50% of labor force in info. processing (by 2006)
-
Higher worker skills required
Networks
-
Specialization results in interdependency between firms
-
Companies working as “teams”
-
Flexibility – firms “reform alliances as needed”
Job Migration Trends:
- Northeast/Midwest regained some lost manufacturing
jobs and added service, technology, and transportation jobs
- Import/Export job market due to International Trade
- South and West gained technology, trade, construction
and food production jobs
- Auto manufacturing jobs in the Southeast as foreign
automakers expanded plants and production
- Northern metro areas regaining some lost employment
- Rural employment has increased (along with skill level)
Community Successes in the New Economy:
- Las Vegas
- Seattle (how has it faired since 2001?)
- Mid Sized cities
- Research Parks??
Old Problems in the New Economy
Manufacturing
-
Employment decline, disinvestment
- “Jobless
Growth” phenomenon
-
Reduction in median wages
Geographic Inequalities
-
Job migration from inner city to suburbs
-
Increase in racial segregation (lack of mobility?)
Inner-City Decline
-
Segregated housing
-
Zoning laws and banking practices reinforce the problem
-
Factories move away from labor base (zoning again)
-
White middle-class flight to the suburbs
-
Retail and services declined, adding to the problem
Problems of Suburbanization
-
City problems followed into suburbs
-
Industrial relocation (much of it overseas)
-
Rise in crime and homelessness
-
Suburban youth isolated from social network
-
Rapid suburban growth led to sprawl
-
Transportation and environmental impacts
Rural/Small Town Economic Decline
-
Simultaneous crisis in Mfg and Farming
-
Branch plant migration
-
Changes in retail and service patterns have
added
to the decline (examples??)
A Deeply Divided Labor Force
- Highly Segmented National Market (Harrison)
Primary Jobs
- Career professionals
- Technical positions
- Good wages/benefits
- Career mobility, training opportunities
- Employment security / unionized
- Knowledge intensive
Secondary
Labor Market (marginal)
- Low wage / unstable
- Footloose firms
- Geographic and racially segregated
- Poor benefits and little job security
- Employers are mobile, labor is not (spatially arranged,
isolated)
Outer
Layer of Welfare and Public Sector Job Training
- Revolving door (short duration employment)
- Many Federal programs (most have failed)
- Poor trade: the security of welfare for the insecurity
of a low-paying thankless job (which may involve travel cost)
Alegal
and Illegal Segment
Alegal
- Cash business, dodge taxes
- Drift around in the system
Illegal
- Underground market
- Illegal activities
Results of the segmented labor market
- Middle of the market shrinking (and the middle class
with it?)
- Top 20% earn 50% of income; bottom 60% earn 4.2% of
national wealth
Questions:
What is the effect of the Illegal Immigrant Labor Market?
Is this pattern duplicated in the world market?
Local Economic development must concern itself with the
quality of jobs, with the longevity of jobs and with the ability
of jobs to improve the job base (and eventually, the socio – economic
malaise)
Chronic Poverty
- Black and Hispanic poverty has remained high
- Cycle of the “underclass”
- Female-headed households (46% of persons under the
poverty line
- Under-education and illiteracy become a larger problem
when jobs involve more computers, technology or training
“Creating more jobs does nothing for this sector
of the market”
So What?
Role of Local Economic Development
- Understand Local issues, influences and limitations
- Develop new tools, initiatives (empowerment zones,
enterprise zones, training)
- Stimulate private INVESTMENT
- Look for new markets, opportunities
- Improve mobility of the workforce
- Develop Human Capacity
“Think Globally, Act Locally”
Make Local Economic Development Decisions in the Context
of the Community and with an Awareness of the Problems and Solutions
That Will Make a Difference
Discussion: Examples? Ideas? Argument?
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