The Geography of Joblessness

Go Lean Commentary

“A better place to live, work and play” – this is the tagline for the book Go Lean…Caribbean, thereby placing emphasis on the verb “work”. To work, there must be jobs, so the entire eco-system of jobs is a constant focus of the book’s publishers.

The foregoing news article relates to this mission. The underlying issue in this consideration relates to jobs and joblessness. There is the need for more jobs – in urban communities in OECD – Organization of Economic Cooperation and Development – countries (like US, Canada, Europe) and also in the Caribbean – see VIDEO in the Appendix below. But there are many issues that underlie the availability of jobs, such as geography, transportation and racial discrimination. To effect change in the job creation quest, there must be some consideration of these issues:

Subtitle: The difficulty people have in getting to jobs makes unemployment unnecessarily high

CU Blog - The Geography of Joblessness - PhotoIN THE OECD, a club mostly of rich countries, nearly 45 million people are unemployed. Of these, 16 million have been seeking work for over a year. Many put this apparently intractable scourge down to workers’ inadequate skills or overgenerous welfare states. But might geography also play a role?

In a paper* published in 1965, John Kain, an economist at Harvard University, proposed what came to be known as the “spatial-mismatch hypothesis”. Kain had noticed that while the unemployment rate in America as a whole was below 5%, it was 40% in many black, inner-city communities. He suggested that high and persistent urban joblessness was due to a movement of jobs away from the inner city, coupled with the inability of those living there to move closer to the places where jobs had gone, due to racial discrimination in housing. Employers might also discriminate against those that came from “bad” neighbourhoods. As a result, finding work was tough for many inner-city types, especially if public transport was poor and they did not own a car.

For the past 50 years, urban economists have argued over Kain’s theory. Some, like William Julius Wilson, then of University of Chicago, pointed to the decline of inner-city manufacturing to explain the sharp spike in poverty in black inner-city neighbourhoods between 1970 and 1980—in keeping with Kain’s logic. Others, like Edward Glaeser, another Harvard economist, suggest that spatial mismatch is overblown. There may indeed be a correlation between where people live and their chances of finding a job. But the connection may not be causal: people may live in bad areas because they have been shunned by employers, either for lack of skills or because of racial discrimination.

Until recently economists did not have adequate data to back up their opinions. Studies used cross-sectional data—a snapshot of an economy at a single point in time—which made it hard to disentangle cause and effect. Did someone live in a bad area because they could not find a job, or was it more difficult to find a job because they lived in a bad area? It was also hard to know quite how inaccessible a particular job was. Researchers could calculate the distance between homes and job opportunities but struggled to estimate how much time it would take to get from one to the other by car or public transport. And the research was marred by small samples, often all from a single city.

A new paper, published by the National Bureau of Economic Research, avoids these pitfalls. It looks at the job searches of nearly 250,000 poor Americans living in nine cities in the Midwest. These places contain pockets of penury: unemployment in inner Chicago, for instance, is twice the average for the remainder of the city. Even more impressive than the size of the sample is the richness of the data. They are longitudinal, not cross-sectional: the authors have repeated observations over a number of years (in this case, six). That helps them to separate cause and effect. Most importantly, the paper looks only at workers who lost their jobs during “mass lay-offs”, in which at least 30% of a company’s workforce was let go. That means the sample is less likely to include people who may live in a certain area, and be looking for work, for reasons other than plain bad luck.

For each worker the authors build an index of accessibility, which measures how far a jobseeker is from the available jobs, adjusted for how many other people are likely to be competing for them. The authors use rush-hour travel times to estimate how long a jobseeker would need to get to a particular job.

If a spatial mismatch exists, then accessibility should influence how long it takes to find a job. That is indeed what the authors find: jobs are often located where poorer people cannot afford to live. Those at the 25th percentile of the authors’ index take 7% longer to find a job that replaces at least 90% of their previous earnings than those at the 75th percentile. Those who commuted a long way to their old job find a new one faster, possibly because they are used to a long trek.

The annihilation of space with time

Other papers suggest that workers may be in the wrong place. A study from the Brookings Institution, a think-tank, finds that poverty in America has become more concentrated over the past decade. During the 2000s the number of neighbourhoods with poverty rates of 40% or more climbed by three-quarters. Unlike Kain’s day, though, poverty is growing fastest in the suburbs, not the inner cities. Pockets of concentrated poverty also tend to suffer from bad schools and crime, making them even more difficult to escape.

Spatial mismatch is not just an American problem. A paper by Laurent Gobillon of the French National Institute for Demographic Studies and Harris Selod of the Paris School of Economics finds that neighbourhood segregation prevents unemployed Parisians from finding work. Another study, conducted in England, concludes that those who live far from jobs spend less time looking for work than those who live nearby, presumably because they think they have little hope of finding one.

All this has big policy implications. Some suggest that governments should encourage companies to set up shop in areas with high unemployment. That is a tall order: firms that hire unskilled workers often need to be near customers or suppliers. A better approach would be to help workers either to move to areas with lots of jobs, or at least to commute to them. That would involve scrapping zoning laws that discourage cheaper housing, and improving public transport. The typical American city dweller can reach just 30% of jobs in their city within 90 minutes on public transport. That is a recipe for unemployment.
The Economist Magazine (Posted October 25, 2014; Retrieved November 7, 2014) –
http://www.economist.com/news/finance-and-economics/21627628-difficulty-people-have-getting-jobs-makes-unemployment-unnecessarily

References – *Studies cited in this article

“Job displacement and the duration of joblessness: The role of spatial mismatch”, by F. Andersson et al, National Bureau of Economic Research, 2014

“The effect of segregation and spatial mismatch on unemployment: evidence from France”, by L. Gobillon & H. Selod, Centre for Economic Policy Research, 2007

“The spatial mismatch hypothesis: three decades later”, by J.F. Kain, Housing Policy Debate, 3(2), 371-460, 1992

“Spatial mismatch, transport mode and search decisions in England”, by E. Patacchini, & Y. Zenou, Journal of Urban Economics, 58(1), 62-90, 2005.

The Growth and Spread of Concentrated Poverty, 2000 to 2008-2012“, by E. Kneebone, Brookings Institution

The book Go Lean…Caribbean serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU). The CU is set to optimize Caribbean society, starting with economic empowerment. In fact, the Go Lean roadmap has 3 prime directives:

  • Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
  • Establishment of a security apparatus to protect the resultant economic engines.
  • Improve Caribbean governance to support these engines.

The Go Lean roadmap calls for many changes and empowerments. One such example is the infrastructure of Self-Governing Entities (SGE), to allow for industrial developments in a controlled (bordered) environment. There is so much that can be accomplished with the right climate, entrepreneurial spirit, access to capital and willing work force. But location is significant with this model, workers must physically get to the bordered campuses/compounds, to get to the jobs. So transportation solutions are paramount to this roadmap.

The CU will foster the installation of SGE’s, and the infrastructure to transport workers to the jobs. The roadmap identifies electrified streetcars, light-rail, natural gas buses and other transit options.

Another compelling mission of the Go Lean book is to lower the “push and pull” factors that lead many to abandon their Caribbean homeland for foreign shores. The book posits that the region must create jobs, the roadmap calls for 2.2 million new jobs over a 5-year period, so that its citizens do not have to leave to become aliens in a foreign land, to be discriminated against as victims of joblessness due to the compelling factors depicted in the foregoing article. The CU does not aim to change North American or European societies, beyond impacting the Diaspora – our scope is the Caribbean. So the public messaging of the societal defects in those countries, as depicted in the foregoing article, should have the effect of dissuading Caribbean emigration. This affects the “pull” factors for Caribbean citizens wanting to leave.

That’s the “pull”; we must still deal with the “push” factors …

There are so many other defects of Caribbean life that need to be addressed to lower the “push” factors. This point is pronounced early in the book with the Declaration of Interdependence (Pages 12 – 14) with many statements that demonstrate the need to remediate Caribbean communities:

xix. Whereas our legacy in recent times is one of societal abandonment, it is imperative that incentives and encouragement be put in place to first dissuade the human flight, and then entice and welcome the return of our Diaspora back to our shores. This repatriation should be effected with the appropriate guards so as not to imperil the lives and securities of the repatriated citizens or the communities they inhabit. The right of repatriation is to be extended to any natural born citizens despite any previous naturalization to foreign sovereignties.

xx.  Whereas the preparation of our labor force can foster opportunities and dictate economic progress for current and future generations, the Federation must ensure that educational and job training opportunities are fully optimized for all residents of all member-states, with no partiality towards any gender or ethnic group. The Federation must recognize and facilitate excellence in many different fields of endeavor, including sciences, languages, arts, music and sports. This responsibility should be executed without incurring the risks of further human flight, as has been the past history.

xxiv. Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

xxv.  Whereas the legacy of international democracies had been imperiled due to a global financial crisis, the structure of the Federation must allow for financial stability and assurance of the Federation’s institutions. To mandate the economic vibrancy of the region, monetary and fiscal controls and policies must be incorporated as proactive and reactive measures. These measures must address threats against the financial integrity of the Federation and of the member-states.

xxvi. Whereas the Caribbean region must have new jobs to empower the engines of the economy and create the income sources for prosperity, and encourage the next generation to forge their dreams right at home, the Federation must therefore foster the development of new industries, like that of ship-building, automobile manufacturing, pre-fabricated housing, frozen foods, pipelines, call centers, and the prison industrial complex. In addition, the Federation must invigorate the enterprises related to existing industries like tourism, fisheries and lotteries – impacting the region with more jobs.

The purpose of the Go Lean…Caribbean roadmap is to compose, communicate and compel economic, security and governing solutions for the Caribbean homeland. We want a better society than the past, and perhaps even better than our OECD counterparts. (A CU mission is to repatriate the Diaspora back to the homeland).

How, what, when?

The Go Lean book details a series of community ethos, strategies, tactics, implementations and advocacies to impact jobs in the region, member-states, cities and communities. Below is a sample:

Community Ethos – Deferred Gratification Page 21
Community Ethos – Economic Principle – Economic Systems Influence Choices & Incentives Page 21
Community Ethos – Economic Principle – Voluntary Trade Creates Wealth Page 21
Community Ethos – Job Multiplier Page 22
Community Ethos – Minority Equalization Page 24
Community Ethos – Lean Operations Page 24
Community Ethos – Ways to Impact the Future Page 26
Community Ethos – Ways to Foster Genius Page 27
Community Ethos – Ways to Help Entrepreneurship Page 28
Community Ethos – Ways to Promote Happiness Page 36
Community Ethos – Ways to Impact the Greater Good Page 37
Strategy – Mission – Facilitate Job-Creating Industries Page 46
Tactical – Fostering a Technocracy Page 64
Tactical – Tactics to Forge an $800 Billion Economy – High Multiplier Industries Page 70
Tactical – Separation of Powers – Self-Governing Entities Page 80
Implementation – Ways to Pay for Change Page 101
Implementation – Steps to Implement Self-Governing Entities Page 105
Implementation – Ways to Deliver Page 109
Implementation – Reasons to Repatriate to the Caribbean Page 118
Planning – 10 Big Ideas – Self Governing Entities as Job Creating Engines Page 128
Planning – Ways to Make the Caribbean Better Page 131
Planning – Ways to Improve Failed-State Indices – OECD-style Big Data Analysis Page 133
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy – Ways to Improve Transportation Page 205
Advocacy – Ways to Impact the Diaspora Page 217
Advocacy – Battles in the War on Poverty Page 222
Advocacy – Ways to Impact Trinidad & Tobago – Bottom Line: OECD Case Study Page 240
Appendix – Job Multipliers Page 259

Other subjects related to job empowerments (and joblessness) for the region have been blogged in other Go Lean…Caribbean commentaries, as sampled here:

http://www.goleancaribbean.com/blog/?p=2769 DC Streetcars to Facilitate Easier Urban Transportation Options
http://www.goleancaribbean.com/blog/?p=2750 Disney World’s example of Self Governing Entities and Economic Impacts
http://www.goleancaribbean.com/blog/?p=2602 Jobless Rural Guyana Wrestles With High Rate of Suicides
http://www.goleancaribbean.com/blog/?p=2126 Where the Jobs Are – Computers Reshaping Global Job Market
http://www.goleancaribbean.com/blog/?p=2025 Where the Jobs Are – Attitudes & Images of the Caribbean Diaspora in US
http://www.goleancaribbean.com/blog/?p=2003 Where the Jobs Are – Ship-breaking under the SGE Structure
http://www.goleancaribbean.com/blog/?p=1698 Where the Jobs Are – STEM Jobs Are Filling Slowly
http://www.goleancaribbean.com/blog/?p=1683 Where the Jobs Were – British public sector now strike over ‘poverty pay’
http://www.goleancaribbean.com/blog/?p=1596 Book Review: ‘Prosper Where You Are Planted’
http://www.goleancaribbean.com/blog/?p=1433 Caribbean loses more than 70 percent of tertiary educated to brain drain
http://www.goleancaribbean.com/blog/?p=1214 Where the Jobs Are – Fairgrounds as SGE & Landlords for Sports Leagues
http://www.goleancaribbean.com/blog/?p=273 10 Things We Don’t Want from the US – Job Discrimination of Immigrations

The purpose of this roadmap is to elevate Caribbean society. To succeed we must apply lessons from the advanced economy countries (OECD) like the US, Canada and Western Europe; lessons from their good, bad and ugly experiences of the past.

The Go Lean book embraces economic principles. One basic tenet is “supply and demand”. The assumption would be that if there are job openings and unemployed people, that “suppliers and demanders” would align. Unfortunately that is not the reality; the foregoing article relates the other issues in OECD countries of racism and geography.

Life in the OECD countries is not fair. It is a struggle; perhaps even more so than necessary.

The Go Lean movement (book and blog commentaries) posits that there is less effort to remediate the Caribbean homeland, than to thrive in an alien land. So it thusly advocates to “prosper where planted”. With some effort, as defined in the Go Lean book, the Caribbean can truly become a better place to live, work and play. 🙂

Download the free e-Book of Go Lean … Caribbean – now!

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AppendixVideo: OECD – For A Better World Economyhttp://youtu.be/B5XGiihBfaU

 

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