Friday, January 21, 2011

Cleveland may be jumping out of recession

By Ken Prendergast

   For metropolitan areas, how they emerge from recessions is a lot like how companies emerge from bankruptcies. Did they learn anything? Are they leaner and more efficient? Have they positioned themselves to grab growth opportunities from the coming economic upswing?

   Unlike the last two recessions in the early 1990s and early 2000s, the answers for Greater Cleveland this time appear to be “yes.” Admittedly, at this early stage the data seems incomplete and, in one case, questionable. But to have early indications that are positive is better than the alternative. Greater Cleveland has had its share of the alternative. Now, the positive indications are rolling in and well-deserved.

   In his Jan. 18, 2010 blog “Where the Brains Are Going,” researcher Richard Florida, author of The Creative Class and founder of the Creative Class Group, noted a recent report by the Brookings Institution. It reported that the loss of bright, young people from Rust Belt cities like Cleveland, Pittsburgh, Buffalo and Milwaukee has slowed and is, in some cases, reversing. See:

   During the Great Recession of 2007-09, which Florida dubs “The Great Reset,” many young people undoubtedly returned home to seek parental refuge from the economic storm. But that ignores the impressive efforts made by Rust Belt cities to redesign themselves to enhance networking opportunities, build human-scale communities, attract entrepreneurs and boost the number of jobs in technology and advanced manufacturing.

   “One of the subtler and perhaps more important trends brought on by the Great Reset is the improved and improving performance of older Rust Belt metros from Pittsburgh, Cleveland, and Buffalo to Milwaukee and St. Louis, which appear to have turned the tide in terms of their ability to attract and retain young adults and college grads,” Florida wrote.

   “Certainly the housing crisis and the ongoing economic transformation has played a role, but it also suggests that the longer-run efforts that these communities have been making to transform their economies, as well their more recent strategies to upgrade their quality-of-place and in general improve their ability to compete for young talent may well be paying off. And that is very good news,” Florida added.

   In short, Greater Cleveland has come out of the recession better prepared for growth, so notes Chris Thompson, director of Funder and Regional Engagement at the Fund for Our Economic Future.

   “This recovery seems driven more by manufacturing than consumer consumption, and that is good news for Northeast Ohio,” Thompson said in an interview last week with NEOtrans. “The questions are will the manufacturing driven recovery continue to build and will Northeast Ohio companies continue to prosper in it? We are hopeful that it will, but it is still very early in the game. Two keys will be whether we continue to make strides in innovation and whether our companies improve their ability to export products to growing global markets.”

   He cautioned that it’s important not to read too much into short-term economic statistics, be they encouraging or discouraging.

   “However, based on numerous economic reports and anecdotal evidence it is evident that in the early stages of a relatively weak economic recovery, Northeast Ohio is doing better than it performed during the recoveries that followed the last few recessions. Indeed, one could argue that the economic recoveries experienced by the rest of the nation after the last few downturns barely happened here,” Thompson said.

   Some reports, including those from the Bureau of Labor Statistics, show that Greater Cleveland has seen the second-largest number of new jobs among U.S. metropolitan areas (trailing Indianapolis). Even job listings Web site ranked Cleveland as the nation’s seventh-hottest job market based on the number of available jobs (see: The reason? Health care and information technology were among the jobs in greatest demand nationwide – a hot market in which Greater Cleveland has positioned itself before the recession.

   One problem with recent data comes from the U.S. Bureau of Labor Statistics’ monthly reports, called the Current Employment Statistics. The BLS has been using a flawed model since 2008 to track the destruction or creation of jobs, says Cleveland-based economic research analyst George Zeller.

   “With the release of last month’s December figures, BLS threw in the towel,” Zeller said in an interview with NEOtrans. “They announced that they are going to abandon the failed ‘birth-death’ model of firms that has failed catastrophically for two years in a row. Instead, the annual February revisions will now become quarterly revisions, starting in April. They think, and I agree with them, that this will make the job figures more accurate and more timely.”

   At that time, those of us who watch Greater Cleveland’s economic performance should have much better data on how the region is performing compared to its emergence, or lack thereof, from past recessions. And we should be able to more accurately measure our region against the economic recoveries in other regions. But the early returns are much more positive than from the previous two recessions. May Greater Cleveland’s hard work and good news continue.


Sunday, January 9, 2011

A transportation tale of two cities – and states

By Ken Prendergast

   Sometimes the best way to reveal how miserably underserved Ohio is when it comes to local, regional and intercity public transportation is to compare two similar cities in separate states.

   Our tale of two cities starts in Warren, OH, 15 miles west of downtown Youngstown. Once a proud manufacturing center, it has been bleeding jobs and residents for several decades. Today it has a population of 43,000 (down from 60,000 in 1970). Warren is set in Trumbull County which has 210,000 residents, 3,100 of whom commute 50 miles each way to jobs in Cleveland, Census data shows.

   We don’t have to look far for Warren’s comparison city. Of nearly equal distance from downtown Youngstown to the east is New Castle, PA. It is virtually the eastern mirror of Warren, except that New Castle is smaller and has more hills. And like Warren, it has been bleeding manufacturing jobs and residents. Today, New Castle has a population of 25,000 (down from 40,000 in 1970). It is in Lawrence County, population 90,000, of whom 3,000 commute nearly 50 miles each way to jobs in Pittsburgh, according to Census data.

   But the similarities stop when it comes to public transportation.

   The reason for the difference is that a state line separates Warren from New Castle. More accurately, the reason for the difference is the sharp contrast in transportation public policies that exist on one side of the state line versus the other.

   The New Castle Area Transit Authority has 17 fixed-route bus services, many of which operate every day except Sunday. Their most heavily traveled routes offer buses every 30 minutes. And, they have a popular and growing express bus service to downtown Pittsburgh with 11 daily round trips Monday through Thursday, 13 on Friday and four on Saturdays. The trip takes 1 hour, 25 minutes and the fare is just $3 each way, funded in part by Pittsburgh's new casino. Sunday service is provided by Greyhound which has two round trips between New Castle and Pittsburgh seven days per week but the round-trip fare costs up to $50.

   NCATA buses travel directly to Pittsburgh’s new Greyhound station, built two years ago across Liberty Avenue from Amtrak’s Penn Station. So someone from New Castle can easily connect to/from long-distance trains and buses. Local buses east to the universities at Oakland or west to the airport flow through this area, too.

   A very different transportation scene exists 15 miles west of downtown Youngstown. So what regular public transportation service does Warren offer?

   Nothing. Nada. Zero.

   Trumbull County recently scraped together enough funding for a minimal dial-a-ride service so low-income, senior and disabled residents aren’t sentenced to home confinement anymore. If they reserve a bus early enough, citizens can get a ride to the doctor, grocery store and social activities. But the transportation isn’t there on a regular, daily basis to provide more independence, which a scheduled route offers.

    That’s a statement about Ohio’s lack of civility, humanity and moral responsibility to its most vulnerable citizens – let alone many travelers who simply don’t want their hands to be chained to the steering wheels of their money-eating, energy-dependent, weather-vulnerable cars. Warren has no transit route to Youngstown or Cleveland. There’s no Greyhound service. There’s nothing. Warren may as well be in the middle of the Mojave Desert for all Ohio is concerned. It’s a similar situation in other small and medium-sized Ohio cities – from Lorain to Lima.

   What’s the difference between Ohio and Pennsylvania? Money, of course. Budgets are the ultimate statement of political priorities. In 2010, the Pennsylvania Department of Transportation’s Bureau of Public Transportation spent $400 million on transit. In 2011 it could drop to $250 million due to the commonwealth’s inability to turn Interstate 80 into a tollway. But the state’s goal is to increase public transit operating funds to more than $500 million per year.

   In 2010, Ohio spent a mere $10 million on public transportation. Yes, $10 million is not a typo. That’s less than what the state spends to cut the grass along its Interstates. Even at its peak in 2000, the $42 million Ohio spent on public transit is less than what Pittsburgh’s transit system got last year from the Commonwealth of Pennsylvania.

   In one of its last acts, the departing Strickland Administration quintupled Ohio transit funding to $50 million for 2011 by tapping federal transportation funds. It's likely those funds will be diverted to roads by the incoming Kasich Administration – as if 98 percent of transportation tax dollars going to Ohio roads is not enough. If Ohio spent 8.5 percent of its $3 billion transportation budget on transit to at least serve the 8.5 percent of Ohio households without cars, the Buckeye State would quintuple transit funding again, this time to $250 million per year.

   Of course, all of these cities – Cleveland, Warren, Youngstown, New Castle, Pittsburgh – could be connected again using some of the region’s many parallel rail corridors. Federally compliant environmental planning for Cleveland – Akron – Youngstown – Pittsburgh (CYP) TechBelt rail infrastructure investments was due to start in 2011 to create more efficient freight and commuter rail accessibility and support TechBelt Initiative job-creation goals. The fate of that planning under Kasich isn't known. This region and many others need transportation now.

   Back in New Castle, citizens can take NCATA bus Route 91 on US 422 between downtown New Castle and the Ohio state line. Sadly, no Western Reserve Regional Transit Authority bus route comes from Youngstown to connect with it. The closest is WRTA’s Route 31 on US 422, which turns back just three miles shy of the state line. Three miles. So if someone in Youngstown (where 18 percent of the city’s households have no car) wants to visit family or friends in New Castle, they’d have to take a Greyhound bus to downtown Pittsburgh and double-back to New Castle – a 115-mile trip because Ohio won’t pay for three miles of bus service.

   Sadly, that’s still more convenient than the transportation service to Warren and other Ohio cities which have nothing.