A New Take on “Food for Fuel”

Usually when you hear the phrase “food for fuel,” it is used in reference to processing corn, sugar cane, and other staples into biofuel such as ethanol and biodisel. But there is a new situation developing that gives fresh spin on this phrase: displacing food for shale oil.

There is no question that the shale gas and oil boom has been a boon for the United States. A study out of Purdue University estimates that, without the shale revolution, U.S. GDP for the years 2008-2035 would be 3.5% lower. Additionally, shale oil has helped moderate the volatility of the global oil market and lowered our energy import dependence, while the growth in natural gas production has driven down prices, leading to a shift away from dirtier coal in favor of increased natural gas capacity

In states rich with shale oil and gas, the benefits of developing these resources have been the most tangible. Just across the border in North Dakota, development of the Bakken oil fields are largely credited with an 11 percent growth in the state’s GDP from 2011-2012, soaring real estate prices, and the lowest unemployment rate in the nation, 2.8 percent.

These figures make it seem like the economic impact of the shale revolution has been good for all, directly or indirectly from trickle down effects.

Perhaps not.

More reports are surfacing that, to the contrary, shale oil is actually crowding out other important commodities (and personal travel) by congesting rail lines and displacing shipments of coal and grain. Rail currently carries around 11 percent of U.S. oil, a figure that is expected to continue to increase through the rest of 2014. As of last week, BNSF, the largest regional railway, had over 1,000 rail cars set to deliver grain and other goods waiting to be shipped. According to a study out of North Dakota State University, these delays could cost North Dakota farmers $67 million over the winter months, and another $95 million if they are unable to move any remaining inventory after that.

As my colleague Conrad pointed out in a blog post earlier this month, farmers here at home are facing the same headache. A study from the University of Minnesota estimates that corn and soy growers lost over $70 million nearly $19 million, respectively, between March and May due to rail delays. Local businesses are taking a hit as well: General Mills reported last March that it had lost around 2 months’ worth of production; Cargill reported lower earnings due to higher rail transport costs.

Rail companies are responding to the overload of rail freight, greatly increasing spending on capital assets and boosting their payrolls. Despite this, backlogs of rail shipments are likely to persist as oil production ramps up. One solution, of course, could be more pipelines. But pipeline projects, even those with approval or that are close to gaining approval from the Federal Energy Regulatory Comission, are still years away from operation. In the meantime, state legislatures and likely, the Federal Government, will need to examine options for balanced growth that doesn’t bolster one commodity at the expense of others.

As a nation, we have an insatiable hunger for oil and gas to power that economy. But displacing food with fuel should be an unacceptable tradeoff.

Posted in Economic Development | Related Topics: Business Growth  Energy  Environment 

What State is Jeff Johnson Looking At?

“It is never a good thing to see jobs fleeing the state,” Jeff Johnson declared in a press release from earlier this summer. One can only wonder what state the conservative gubernatorial candidate is referring to, because it doesn’t sound like Minnesota.

Since Mark Dayton, the man Jeff Johnson wants to replace, came to office in January 2011, the total number of jobs in Minnesota have grown by 5.7 percent, significantly greater than the Midwestern average of 4.9 percent.* And how about Wisconsin, the home of conservative golden boy Scott Walker, the man that Johnson plans to emulate as the next governor of Minnesota? Wisconsin’s job growth rate is a disappointing 4.1 percent—as far below the Midwestern average as Minnesota is above it.

Approximately one year ago, Minnesota had officially regained all of the jobs lost during the Great Recession. Wisconsin, on the other hand, still hasn’t recovered all of the jobs it lost; in fact, as of July 2014, Wisconsin is still 25,000 jobs (0.9 percent) short of its pre-recession peak.

In fairness to the Badger State, it was hit much harder than Minnesota by the recession which officially ended in June 2009. Furthermore, not all of Wisconsin’s lackluster job growth can be blamed on Scott Walker, just as Mark Dayton cannot take credit for all of Minnesota’s above average job growth—although after over three years in office the policies pursued by both governors could be influencing the job trajectory to at least some extent. However, of two things we can be sure:

The conservative article of faith that tax increases are job killers and tax cuts are job producers is not borne out by the facts. Former state economist Tom Stinson has noted that Minnesota above average income growth over the last half century is in large part attributable to smart investments in education, infrastructure, and other public assets that improve Minnesota’s quality of life—investments paid for largely with tax dollars. Over the last two years, progressive state policymakers have restored a relatively small portion of cuts made to these investments over the last ten years.

By emulating the far right agenda of Scott Walker, Jeff Johnson would be pursuing policies that haven’t worked out very well in Wisconsin. For that matter, they haven’t worked that well in Minnesota either, as demonstrated by Minnesota’s disappointing economic performance during the Pawlenty years. If anything, conservative “solutions” to the twin problems of sluggish job growth and income inequality have only made matters worse.

*Employment numbers cited here are based on seasonally adjusted total non-farm employment from the U.S. Bureau of Labor Statistics.

Posted in Economic Development | Related Topics: Job Growth  Midwestern States 

Video: Health Care Workers Vote to Unionize

Homecare workers gathered at the State Fair this afternoon to announce the results of their union election. By a decisive vote, over 60% voted "yes" to form a union and join SEIU. Workers will now have the opportunity to join together and bargain collectively with the state for better working conditions, wages and benefits that will improve the quality of life for workers, and the quality of care patients receive.  

Posted in Economic Development | Related Topics: Health Care Professionals  Union  Workers' Rights 

We Can Become an “Opportunity City”

The website, NewGeography.com, recently posed the question “What (and who) is a city for?” Which led me to consider the question: With all of the changes to the Twin Cities in recent years, how are we working for the betterment of all Minneapolis-St. Paul residents?

The author, Joel Kotkin, frames this argument between two possible options for metropolitan areas: luxury cities or opportunity cities. Luxury cities, such as New York City, Chicago or Los Angeles, are characterized as “entertainment machines” with blocks full of an amalgamation of “chic restaurants, shops, and festivals.”

The “less stimulating,” opportunity city, on the other hand utilizes urban life as a means to work towards upward mobility and improved well-being for the middle and working classes. These opportunity cities are, frequently, a destination for immigrants, promotion of housing equity and even diversity of industry and those who own the firms.

Which category should we belong to?

Minneapolis and St. Paul women, for example, own 33 percent of all firms (much higher than the national average). Furthermore, we have a 50 percent homeownership rate which the article cites as integral in attracting middle class families, and is in line with other major metropolitan areas, such as Dallas-Fort Worth, Denver and Nashville.

A majority of opportunity cities are in the middle swath of the country and, although Minneapolis-St. Paul is missing from this list as of now, we have the potential to be a strong, defining game-changer. This forward momentum can be tracked in Minneapolis Mayor Betsy Hodges’ first city budget, where equity and diversity of industry play a large part in Minneapolis’ future growth.

The general economic recovery, paired with Minnesota’s progressive policies coming from the capitol, has boosted Minneapolis and St. Paul’s likelihood for inclusion among these fast-growing cities. Kotkin iterates that, “to a large extent, this [city] growth is fueled by middle-class movement to regions that offer both economic prospects and more affordable housing prices.”

These economic prospects are defined by the diversification and development of industries that the Twin cities have already been doing. Revitalizing industrial jobs, adding STEM jobs as well as continuing mid-skilled job growth are all aspects that will continue to push the Twin Cities higher up on the list of opportunity cities.

The real question, then, is whether Minnesota can create and sustain the level of equity a title like 'opportunity city' implies. Our leaders have shown that they want to support open opportunity for all now and in the future, but we can challenge them to go further in creating this environment.

Posted in Economic Development | Related Topics: Business Growth  Minnesota Cities  Minneapolis / St Paul 

Marching on for Women’s Equality

I was 14 years old in 1976 when I marched in support of the Equal Rights Amendment (ERA) with a local chapter of National Organization for Women (NOW). It was a short march in a small Western New York town. But, that march was transformative and fed my hunger to learn more about the women making headlines of the time: Gloria Steinem, Shirley Chisholm and Bella Abzug, to name just a few. It wasn’t until I went off to college not far from the home of the historic 1848 Seneca Falls Convention that my lessons began about the first wave of feminists, the suffragists, including Elizabeth Cady Stanton and Susan B. Anthony.

We honor the work of those brave early feminists on this Women's Equality Day, commemorating the 19th Amendment to the Constitution that granted women the right to vote.

Fast forward 94 years. Not only do we vote—we are being voted into office. "We are growing in number,” Senator Amy Klobuchar told the NY Times.  “But more importantly, we are growing in our power."  And making other strides. Early this year at home, the Women’s Economic Securities Act (WESA) was signed into law. 

Now, we must continue the work of the early feminists. What do women want and need? I emailed that question to a few women in my network and here's what they all agreed. Women need financial equity. Narrowing the gender-based wage gap is the number one issue on the minds of women I heard from:

"Pay is the most important feminist issue facing women today. We continue to face stereotypes in terms of pay structures and that harms women. Thirty years ago Minnesota passed the Local Government Pay Equity Act which was the state's way of leveling the playing field in terms of pay attached to men's and women's work. As a result pay is assigned to women's work as well as men's work based on skill, effort, working conditions, and responsibility for employees of cities, counties, and school boards. We do this through job evaluation and gender neutral rating of jobs. However, the private sector pay scales are so focused on market rates that include within them historic discrimination. Caregivers (women) are paid less than road repair workers (men), teachers (women) are paid less than engineers (men), marketing associates (women) are paid less than groundskeepers (men) even though the levels of responsibilities, problem solving, know how, and communication skills of the women's jobs are often greater than the men's jobs. We have a great deal of shifting to do in this respect."                                                                                                                                                         -- Patty Tanji, Pay Raise/Compensation/Pricing Strategist, Open Workplace LLC

"It’s been only 40 years since women could obtain a credit card in her own name without a man co-signing it for her. It was 1974 when the Equal Credit Opportunity Act was passed. I find that shocking. And, here we are forty years later talking about whether feminism is a relevant term anymore. We are still seeing institutionalized inequity in pay scale. We need to be treating people equally and paying people for their value. It's about equality."
-- Cecily Sommers, Futurist/Author, Founder of The Push Institute

“Additional funding must be made available for women business owners. The biggest obstacle for female entrepreneurs is access to capital, particularly venture capital, where women-owned businesses only receiving 6-8 percent of the funding. Achieving parity in the area would mean true equality for women in the area of business development.”
-- Elaine Wyatt, Executive Director, WomenVenture

The Peggy Olsons of the world may have helped coin the cigarette advertising slogan, We’ve Come a Long Way, Baby, but we have a long way yet to go until the work of men and women are valued equally. What will Minnesota be like for women forty years from now? Let’s continue working together—men and women—to ensure policies are in place to help close the economic gap so we can all enjoy a full, rich life of opportunity.

Posted in Economic Development | Related Topics: Gender Inequalities  Workers' Rights 

When Should the Public Pay for Purple Squirrels?

Go to college, get a job, make a decent wage. That’s how it’s supposed to work right? Only if everyone gets that decent wage at the end of it all.

Multiple pieces of research (summarized in part by The Atlantic) identify what employers are most looking for from job applicants who just graduated from college. High on the list, well above college GPA or the relevance of college coursework, are internships and work experience. Again, these are what employers are looking for from new graduates.

What, then, to make of the constant complaints that employers can’t find qualified workers? What of the much-discussed STEM (science, technology, engineering and mathematics) shortage? Well, as you may remember from past coverage, our problems in STEM aren’t really about the number of graduates in STEM fields.

This is a good reminder of the mismatch between an employer’s ideal candidate and what our schools, colleges, and universities can reasonably produce. In the parlance of job recruiters, they’re all hunting for purple squirrels: people with the perfect education and experience. This tends to imply a worker trained at someone else’s expense (where else is that work experience going to come from). And, of course, the ultimate purple squirrel is willing to work for free.

The role of public education should not be the production of purple squirrels. Even stepping back from the purple squirrel idea to the notion of simply preparing graduates to work for particular local employers, we can see problems.

Let’s say a local employer has five positions for a certain kind of job that it needs to fill every year. If a nearby college could produce five graduates each year who meet that employer’s criteria, it would still be better for the employer if the college produced ten. It would be even better for the employer if the college produced twenty. Flooding the market means the employer can drop wages, paying people less than their work.

Public education’s priorities are its students and the public at large. Employers’ needs are important only to the extent they support those two. Convincing thousands of students to take on additional debt only so they can fight for low wages in an oversaturated market is not —or at least should not be—the business of public schools, colleges, or universities. Helping Minnesota's students prepare for jobs is great, but we should recognize the difference between employers’ interests and those of students or the public in general.

Posted in Economic Development | Related Topics: Higher Education  Job Growth 

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Mayo and Shyness “On a Stick” at the State Fair

I never thought I’d see the day when references to the great Mayo Clinic would be uttered in the same breath with our annual attraction to food on a stick at the Minnesota State Fair. It has happened. And it works.

Secretary of State Mark Ritchie mixes metaphors to make a good point about Minnesota innovation in a recent op/ed article for the Rochester Post Bulletin. He called on visitors to the Minnesota State Fair, which opens Thursday, to stop by the Innovation on a Stick exhibit in the Grand Stand building.

We’re talking about promoting Minnesota innovation here, not necessarily the state’s contributions to health or food nutrition. The state fair exhibit will show how Ritchie and other Minnesota promoters and entrepreneurs are working to attract a World’s Fair here in 2023. Rochester, he told the southern Minnesota newspaper readers, has been a leader in such bold thinking about the future. The Destination Medical Center anchored on and surrounding the Mayo Clinic, with state and local support, is an example of bold thinking that will be remembered a hundred years from now, Ritchie added.

Promoting a world’s fair proposal and keying off our annual, humorous attraction to fair food served on a stick, Ritchie is at the same time highlighting a quirkiness of Minnesota culture. We sometimes have to laugh at ourselves in order to tell people about us. “But while we are a major world player, we are often too shy or polite to brag about our achievements and institutions,” he wrote. “Hosting a world’s fair is an opportunity to invite the world to our backyard – where we can comfortably share our remarkable stories about the Mayo Clinic, the Boundary Waters, our amazing colleges and universities and all the hardworking, creative people making Minnesota the most civically engaged and economically successful state in the nation.”

Overcoming shyness, it should be noted that world fair promoters are finding legitimate things for Minnesotans to brag about. A good example of that comes from Stamford, Conn., where the Stamford Advocate recently informed its readers that Minnesota entrepreneurs would “Launch Innovation on a Stick at Minnesota State Fair.”

That is getting the word out no matter how it is served.

Posted in Economic Development | Related Topics: Economic Growth 

The State as a Model Employer

Our public workforce should reflect our state’s diversity, but Minnesota is not living up to this standard.  Research shows that 10 percent of Minnesota’s civilian noninstitutionalized population has a disability, but only a little more than three percent of state public employees are disabled. The state’s disabled workforce has been shrinking for 15 years—now is the time to reverse the trend.

In response to recent criticism by disability advocates, Governor Mark Dayton issued an executive order last week that urges state agencies to hire more workers with disabilities. The order outlines a goal to double the amount of Minnesota’s public employees with disabilities to at least 7 percent by August 2018.

Under Dayton’s order, all Executive Branch Agencies must work to hire more people with disabilities by designing better recruitment strategies, updating hiring tools, training managers and human resource personnel, and submitting quarterly progress reports.

As the largest employer in Minnesota, the state is responsible for offering employment opportunities to all of its citizens. The talents of individuals with disabilities cannot be overlooked.

Governor Dayton’s executive order will hopefully inspire the state to embrace its potential as a model employer. As more people with disabilities gain careers as public employees of the state, businesses and organizations will learn the importance of equal employment.

Commenting on the reason behind Minnesota’s failure to hire more workers with disabilities, Governor Dayton told MPR, “Part of it is just the lack of attention to this as a priority.”

In order to successfully prioritize equality throughout all of Minnesota’s economic landscape, the state government must create an accessible, welcoming environment for disabled persons through workplace accommodations, staff education, and community awareness training.

Proactive recruitment is necessary to inform the disability community about available public positions. State agencies should partner with disability advocacy organizations to reach out to potential employees. Minnesota’s government must also work to improve the accessibility of job applications and the hiring process.

The Governor’s executive order was only the first step in transforming the state into a model employer. Communities must support the government as it implements improvements to open employment opportunities to individuals with disabilities. With our state leaders on board, all of Minnesota’s employers will learn to embrace equality.

Posted in Economic Development | Related Topics: Job Growth  Workers' Rights 

Minnesota’s Stagnant Broadband “Expansion”

In 2008, Minnesota set a goal to become one of the top five states for advanced broadband speeds by 2015; unfortunately, Minnesota has fallen to 23rd in the nation. Why are we failing at solving this problem?

Education is the most powerful motivating factor for expanding internet capabilities throughout the state, so that’s where we’ll start.

More and more education will happen using the internet and online learning tools. Teachers will still be in our schools, no doubt about that; however, if schools and teachers want to stay ahead of the curve, they will accept that curriculum must be supported by online resources.

But what use is online learning for students and communities with limited access to those resources?

Comcast has recently announced an extension to their Internet Essentials program, which assists low-income families with students to access high-speed internet. The program determines which families are eligible by the student’s ability to access free or reduced-price lunch at school. The extension allows those families with previous debts to Comcast to be forgiven and will focus more intensely “on schools where 100 percent of students receive a free lunch through the National School Lunch Program.”

Comcast has been plagued by bad press lately, however and, without a committed philanthropic mission, this relatively small expense could be seen as attempting to earn positive headlines in a troubled time.

What is truly needed is the approach that Connect Minnesota’s Broadband Task Force (BBTF) has been taking for the last six years. The BBTF’s goal is to connect all Minnesotans to some sort of broadband service by next year, 2015. In their 2013 Report, the BBTF outlined that their efforts are simply not adequate for the size of the project in question.

The situation for students is dire because although “most schools are able to offer students at least limited internet access at school,” many of the “rural area have no such access to do their online work at home.” This fact, paired with the fact that 30 percent of low-income families in the Twin Cities lack access, spells out the dismal situation for Minnesota’s broadband capabilities.

All of the top states growing in broadband availability are investing in the infrastructure to achieve wide-spread availability. Much like electricity and phone lines, the internet has already proven to be capable of much more than imagined at its conception, which is why availability remains absolutely vital.

A child’s potential should not be determined by their access to the internet, Minnesota has a responsibility to her citizens to ensure that they are competitive and prosperous.

Posted in Economic Development | Related Topics: Rural Minnesota  Technology 

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Beginner’s Luck at Farmers Market

We celebrate Minnesota farmers markets abundance in August and Colleen Landkamer, state director of USDA Rural Development programs for Minnesota, reminds us that USDA is promoting farmers markets all across the country. That being the case, there is no time like the present to note an extraordinary find at the St. Paul Farmers Market. A new food industry sector may be developing right before our eyes.

Mark Christopher, who with wife Sue has Maple Leaf Orchard across the river at Spring Valley, Wisconsin was selling plump, bright red cherries at the market. Since I've never cooked with locally grown cherries before, I had to give them a try. Best cherry pie I've ever tasted; best pie I've ever baked.

A call to the orchard suggested there might have been luck involved. The cherries can be pretty tart at the beginning of the season and become juicy and sweet by the end of July-early August pickings. Your recipes can't anticipate how much sugar or corn starch may be needed to produce baking perfection.

This tasty treat has relevance to area economic development. There just might be a cherry industry developing in Minnesota like that in Door County (Wis.) and in Michigan.

University of Minnesota scientists and individual plant breeders have had great success in developing apples over the years, and their work with cold-hearty grapes has created a successful and rapidly growing wine industry as well. Less well-known is their work with cherries, apricots and plums that date back to the early 1940s based on varieties available that can be traced to release dates.

Here's what makes the tasty, not-so-sour sour cherries from the St. Paul Farmers Market so promising. Christopher said the cherry variety he raises was largely developed by Bill Eubank who has a River Falls area orchard. Someone from the large, local Bailey Nurseries at Newport bought cherries from Christopher at the farmers market and came back the following week to ask what they were and where did he get them.

Christopher put the Baileys together with Eubank. They have teamed to start producing the trees for orchards and backyards, trademarked as part of Bailey's First Edition collection of plants and called the Sweet Cherry Pie cherry tree.

The talent has come together. That isn't beginner's luck.

Posted in Economic Development | Related Topics: Agriculture  Business Growth 

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