South By North Strategies, Ltd.

Triangle Business Journal Features South by North Strategies

John Quinterno, a principal at South by North Strategies, Ltd., was quoted in the September 25th edition of the Triangle Business Journal. Quinterno offered analysis of local unemployment trends. Click here for the article.

Another Poor Performance in NC

CHAPEL HILL (September 18, 2009) – Summer in North Carolina ended with another poor performance by the state’s labor market. In August, the state saw a small drop in in the unemployment rate (-0.1 percentage points) and a slight gain in the number of payroll positions (+7,000), according to the Employment Security Commission. Nevertheless, hundreds of thousands of North Carolinians are starting fall as they did summer: jobless and facing limited employment prospects.

“North Carolina’s labor market deteriorated all summer long,” says John Quinterno, a principal at South by North Strategies, Ltd., a research firm specializing in economic and social policy. “North Carolina ended August with fewer total jobs, fewer private sector jobs, and a smaller labor force than it had at the the start of June.”

In August, North Carolina employers added 7,000 more positions than they shed. The gain was driven by an increase in government payrolls (+20,100). In contrast, private sector employers, eliminated 13,100 more positions than they created. With the exception of the construction industry, every major private industry reduced payrolls. The trade, transportation, and warehousing industry posted the largest numerical decline (-4,400). Relative to payroll sizes, employment in the information industry fell the most (-1.7 percent).

“The net employment gain posted in August must be taken with a spoonful of salt,” cautions Quinterno. “The gain is so slight that it easily could turn negative upon subsequent revision, as happened with June’s employment report. The gain also is partially offset by revisions to the July data that found that the state lost 2,100 more positions than first reported.”

“By any objective measure, job growth, especially the private-sector job growth vital to a long-term recovery, is not taking place in North Carolina,” adds Quinterno. “Despite the talk about an improving economy, North Carolina has fewer jobs — both total and private-sector ones – that it did at the start of June. And it has many fewer of both job types than it had one year ago.”

A similar story can be told about the state’s unemployment rate. The statewide, seasonally-adjusted rate dropped slightly in August, falling from 10.9 percent to 10.8 percent. Much of the drop was tied to a fall in the size of the labor force — a fall caused in large part by jobless individuals who stopped looking for work and therefore were excluded from the official count.

“The drop in the unemployment rate should not be exaggerated,” warns Quinterno. “Last month, nearly 15,000 individuals exited the labor force and were omitted from the monthly estimates. Furthermore, that decline is part of an ongoing pattern. From the start of June to the end of August, 46,561 North Carolinians left the labor force.”

“North Carolina’s labor market remains in weak shape, observes Quinterno. “Conditions steadily deteriorated all summer long, and on a variety of important employment indicators, North Carolina is worse off now than it was at the beginning of summer.”

“Perhaps the best that can be said is that things are not as bad as they could have been, thanks to modest improvements in the national economy and the federal recovery package,” adds Quinterno.

“Unfortunately, robust economic and job growth still appear to be way over the horizon.”

Contact: John Quinterno, Principal, (919)622-2392

Quinterno Discusses New Development Models

John Quinterno, a principal with South by North Strategies, was a guest on “The Scott Fitzgerald Show” on WPTF Radio in Raleigh, NC on September 8, 2009. Quinterno spoke about the report When Any Job Isn’t Enough: Jobs-Centered Development in the American South that was commissioned by the Mary Reynolds Babcock Foundation in Winston-Salem, NC.  Click here to listen.

Winston-Salem Journal Cites South by North Strategies

A Labor Day editorial in The Winston-Salem Journal cited South by North Strategies’ economic research into long-term employment trends. The firm’s research was used to argue for an extension of emergency unemployment insurance payments and an expansion of workforce development services.

New Report: Reversing NC’s Job Slide

WINSTON-SALEM (September 4, 2009) – By testing the limits of traditional methods of economic and workforce development, the recession is providing North Carolina with an opportunity to deploy a different approach to job creation and skill formation known as jobs-centered development. This model holds the potential to cultivate the skilled workforces demanded by local businesses and expand the opportunities available to area residents, especially low-income ones.

These insights come from the new study When Any Job Isn’t Enough: Jobs Centered Development in the American South. The report’s purpose was to analyze changes in development practices that have occurred across the South over the past decade and identify lessons relevant to current realities. The analysis was commissioned by the Mary Reynolds Babcock Foundation in Winston-Salem and prepared by South by North Strategies, Ltd. in Chapel Hill.

“For some time, communities around the South have recognized that development strategies that simply sell a place on the basis of low costs seldom create living wage jobs for the long term,” says Gayle Williams, executive director of the Babcock Foundation. “At the same time, many places quietly have crafted more integrated approaches that serve the needs of businesses, workers, and communities. Our intention is to spotlight good ideas and learn what works where.”

“Jobs-centered development is an emerging alternative to traditional models of economic and workforce development,” explains John Quinterno, a principal at South by North Strategies and the author of the report. “The goal is to increase community prosperity by simultaneously meeting the workforce needs of local firms and the career-building and skill development needs of local workers, especially low-income ones.”

Because jobs-centered development is a relatively new, relatively localized approach, it lacks a standard model. Nevertheless, research suggests that successful efforts are regional ones built upon five building blocks: 1) an awareness of the macro context; 2) an understanding of the regional economy; 3) knowledge of industry realities; 4) a commitment to worker development and advancement; and 5) the involvement of high-performing intermediary organizations. These components then can be combined to deliver a variety of strategies tailored to local conditions.

“North Carolina is home to an impressive number of jobs-centered development efforts,” observes Quinterno. “In western North Carolina, Hand Made in America has used jobs-centered development techniques tied to entrepreneurship to catalyze the growth of a multi-million dollar crafts industry across a 25-county area. In Greensboro, the Latino Pathways Project created by MDC, Inc. and a local consortium of educational and service providers has helped local health care employers fill job openings while launching recent immigrants on career paths.”

“North Carolina is a regional leader in the jobs-centered development field,” adds Quinterno. “Unfortunately, many promising efforts have received limited funding and have struggled to achieve scale.”

“The current recession represents a test of, and opportunity for, jobs-centered development,” continues Quinterno. “On the one hand, many models were developed in response to the tight labor markets of the late 1990s, not the high unemployment environment of today. On the other hand, the federal recovery act has extended significant financial support for such initiatives, particularly those related to health care and the ‘green economy.’ The challenge is to adapt to current conditions and leverage resources for the maximum benefit of all North Carolinians.”

To meet the recessionary challenges, concludes the report, practitioners and supporters of jobs-centered development should direct their attention to four areas. First, they could reposition themselves to respond to changes in regional economies. Second, they have a chance to leverage federal funds for the specific benefit of low-income workers and low-wealth communities. Third, they could invest in the capacities of intermediary organizations. Lastly, there is an opportunity to for improvements to social insurance and educational policies.

To view the report When Any Job Isn’t Enough: Jobs Centered Development in the American South, visit the web site of the Mary Reynolds Babcock Foundation. The site contains the full report and a condensed summary.

Contacts John Quinterno, South by North Strategies, Ltd., (919) 622-2392 and Gayle Williams, The Mary Reynolds Babcock Foundation, (336) 748-9222