Last week, Forbes Magazine published a story entitled “Shaking off the Rust: Cleveland’s Workforce Gets Younger and Smarter“.
It’s a stunning article — and dramatically contravenes the conventional wisdom about Rust Belt Cities like Cleveland and Pittsburgh. The article notes that “between 2000 and 2012, the Cleveland metro area logged a net gain of about 60,000 people 25 and over with a college degree, while losing a net 70,000 of those without a bachelor’s” degree (my emphases).
The article also notes that “the picture of Cleveland that emerges… is a very different one from that to which we are accustomed. Rather than a metro area left behind by the information revolution, Cleveland boasts an increasingly youthful workforce that is among the better educated in the nation… ahead of such “brain centers” as Chicago, Austin and Seattle.”
The Forbes piece was based on last month’s report by Richey Piiparinen and Jim Russell of Cleveland State University. Entitled “Globalizing Cleveland: A Path Forward“, the report is Part 2 of a 3-part series sketching a theory of change for the CLE relating to economic and community development.
The report documents some broad trends:
· Simultaneously, higher-educated people are moving into the CLE, while lower-educated people are moving out;
· This phenomenon has resulted in a net population loss, but also in a net per capita income gain; and
· The Rust Belt offers a far better value proposition than “spiky” coastal cities like San Francisco and Manhattan. For example, housing in the CLE is 25% the cost , based on income, than San Francisco.
More particular findings follow:
· CLE’s emergent knowledge industry, measured by STEM (i.e., science, technology, engineering, manufacturing) and Health Care employment, increased its job totals by nearly 25% from 2003 to 2013.
· A region’s growing knowledge economy translates into wage growth. CLE’s per capita income increased from $33,359 in 2003 to $44,775 in 2012 — a gain of 34%.
· Also driving up per capita income, the CLE is experiencing a brain gain.
· From 2000 to 2012, the CLE gained over 60,000 people aged 25 and over with a college degree. Most of these gains, approximately 40,000, were made from 2006 to 2012.
· Fueling this brain gain are young Clevelanders. The number of college-educated 25- to 34-year-olds in Greater Cleveland increased by 23% from 2006 to 2012 – with an 11% increase occurring from 2011 to 2012.
· The skill level of the metro’s young adult workforce is world class. In 2009, according to Pitt economist Chris Briem, 15% of the CLE’s workers aged 25 to 34 had a graduate or professional degree, which ranks the city 7th in the nation — ahead of Chicago, Seattle and Austin.
· The sources of the CLE’s brain gain are geographically diverse. Nearly 50% of educated individuals coming into Cuyahoga County from 2007 to 2011 did so from another state.
· When it comes to net migration, Atlanta, Detroit, and Pittsburgh were the biggest feeders for those arriving with a bachelor’s degree — while Chicago, Manhattan, Brooklyn, and Pittsburgh sent the most in-migrants with a graduate or professional degree.
· Concerning international brain gain, 50% of the immigrants that came into Cuyahoga County from 2007 to 2011 were college educated. Out of those educated migrants, 64% were Asian, 14% were European and 8% were African. Sixty percent (60%) of all educated migrants had graduate or professional degrees.
· The landing spots for young and educated migrants, termed “Global Neighborhoods”, included parts of Downtown, Ohio City, Tremont and Edgewater — as well as inner-ring suburbs of Lakewood and Cleveland Heights.
· The parts of Cleveland experiencing the greatest brain gain are also where the greatest wage increases are occurring. Nearly 50% of the residents of the CLE’s Global Neighborhoods work in emerging industries — particularly the “eds and meds.” The number of Global Neighborhood residents who made more than $40,000 a year increased by nearly 50% from 2002 to 2011.
The Forbes article concludes by stating that “the Rust Belt retains many natural resources — oil, gas and, perhaps most importantly, water — that position it to be a major contributor. If the opportunity is recognized by a new generation, the future could prove surprisingly bright in what has long been seen as a fading region.”
First one in, turn on the lights!