Wednesday, September 29, 2010

Married 25-34 Year Olds Now a Minority

Just ten years ago, 55% of 25-34 year old Americans were married, by 2009 that number had dropped to 46%, according to data just released by the Population Reference Bureau, and based on the Census Department's American Community Survey.

Living in the Washington, DC area, I feel this every week, especially when I get a break from my marriage to go out with single friends, and see other people my age (which is above 34) hanging out at bars, making grand plans for the weekend that don't involve mowing the lawn or baseball practice. (And yes, my kid plays baseball, no American child should be playing that silly English sport with a black-spotted ball)

While the trend is not surprising, the rate of change is, essentially dropping a percentage point a year. Now, before any economic development exec or urban planner thinks this means their city needs more douchebag bars or four-letter loft neighborhoods to accommodate overeducated workers, here's an interesting excerpt:

Between 2000 and 2010, the proportion of young adults who are married dropped 10 percentage points (to 44 percent) for those with a high school diploma or less. For those with at least a bachelor's degree, the percent married dropped only 4 percentage points, to 52 percent.

...and many of the cities earning high praise from pundits who think we still have a 1990s creativity-based economy aren't following the trend, the report notes that:

Seattle was the only large city where the proportion of young adults who are married increased slightly since 2000.

The article goes on to point out that there's been a flip - high school grads with no college used to more likely to get married, now the opposite is happening.  And here's my favorite line:

Another factor contributing to the decline in marriage rates, especially for less educated groups, is the rise in women's earnings relative to men.

This is kind of what I've been talking about with face-to-face contact now the defining scarce resource of the economy.   The jobs that aren't getting automated or outsourced, and showing the best growth prospects - from skin care technicians to social workers to nurses - are mostly done by women and don't have exceptionally high educational requirements.

Ultimately, we are adjusting to a new world where most middle-class workers, from teachers to nurses, are women, while men are pushed to the top or bottom by productivity gains.   The decline of marriage rates is just one implication of this trend.   I'm sure some of you have spotted others.

Wednesday, September 22, 2010

The End of Big Infrastructure Projects, Part 1

Last week, it was announced that phase 2 of the Dulles Rail project, which includes the actual airport, will now cost $3.8 billion, or about $350 million per route mile, excluding interest. This blew away previous estimates that had the project coming in at $2.5 billion, and is a huge increase from the $1 billion and change it was supposed to cost five years ago.

The DC area media, including those astute microeconomists at the Washington Post, are chiming in cost saving ideas, particularly relocating the airport station above ground. But these do little to address what's pushing the cost up - labor and health benefits.

In our 2010s economy, where face-to-face contact, not creativity, is the defining scarce resource, big capital projects are becoming more costly at a rate faster than inflation. And it's not an issue of corruption or politicians, but the simple fact that labor costs, including benefits, are rising faster than inflation. Moreover, cap labor productivity is barely advancing, while operating labor is practically being automated out of existence. This means any major infrastructure project - road, rail, or building, is being forced into a tough financing situation.

Maryland's financing $1.2 billion of its 18 mile, $2.6 billion inter-county connector with revenue bonds supported by 25 cent/mile tolls that are expected to rise in the future. Drivers on the Dulles Toll Road will face even more significant increases to pay off the revenue bonds funding the rail line going down its median. While transit advocates might like this arrangement, the same construction firms working on rail work on roads, and the forces increasing costs are the same - it's not like philosophy or politicians can do anything about the underlying economics.

The result of all this that we will soon reach a point where most infrastructure is just maintenance and "construction" mostly applies to existing roads and rails. This will also be seen in sports stadiums, which are subject to similar economic constraints and also likely to be built in far lower numbers in the future, regardless of who gets elected.

Friday, September 17, 2010

Let's Hope Minneapolis Doesn't Tell Us It's "Cool" Now

Few top 30 metros have withstood the bad economy of the last few years as well as Minneapolis-St. Paul. Unemployment there is just 6.8%, it's on the verge of becoming the second largest metro economy after Chicago, surpassing Detroit, and a new baseball stadium is bringing 3 million pedestrians downtown every year. Moreover, its economy is rooted in an industry, agribusiness, which is a net exporter and not in the process of being crushed by outsourcing.

Yet somehow a consultant's report is claiming the region isn't on many relocation short lists, and that a regional economic development group will somehow fix this. In DC, we've had regional efforts, most notably the Greater Washington Initiative, that really do little other than provide a way for members to network. Moreover, exactly who do the consultants want to bring to Minneapolis? Another software company with 35 people but 50 press stories about its relocation? Another solar manufacturer who will stay for nine months before heading off to the Philippines? More pictures of lab coat techs staring at test tubes?

All I ask is if this thing gets created, they spare us the "cool city" crap we've gotten from Michigan and that Louisville has picked up on. Rather than attracting new businesses, that's the sort of thing that tells people it's time to leave.