Wednesday, April 18, 2012

Tourist land

The internet is killing those highly valuable retail jobs that we so desperately want our college educated children to strive for.  Instead they people will be working within the cheerful confines of an Amazon contract warehouse.

Joe Weisenthal at Business insider noted via the two charts following that while retail sales went down and continued to go down throughout the recession, that food and beverage locations have recovered.  There are likely other factors, but people still go out to eat, and even when they order online at Dominoes, someone local still has to make the food.

Joe Weisenthal, Business Insider, 7 April 2012   (hat tip NC)

Retail Employement went down and stayed down
Leisure (Food Service and Drinking Places) recovered

So where are local cities and towns trying to find revitalization?
That other area where we send our youth off to college to train in - or at least they have a degree in it - Tourism.  And while their are a variety of tourist markets, a lot of them require something of at least marginal interest to attract people.
However one area of tourist interest does not really need any locally unique attraction.  You simply set up shop, and people will show up.  Or at least that is the theory that Gary, Indiana is banking o

America’s dream unravels
Edward Luce, Financial Times Magazine, 30 March 2012 (hat tip: Browser)

In a world where the economic centre of gravity is shifting from west to east, the continued faith in casinos, and other forms of gaming, epitomises a certain bankruptcy of thinking among America’s policy makers. On the charts they show up as service jobs, which economists instinctively treat as superior to jobs that involve making things. Much like the shift from farming to manufacturing a century ago, America is now climbing up the value-added chain to the more cerebral world of service industries. Brain power is America’s future.

It doesn’t always appear too cerebral in practice. Too large a share of the new service jobs are dead-end and enforced part-time positions that enable the employer to wriggle out of providing healthcare insurance. In the past decade, the number of Americans insured by their employers has fallen from two-thirds to barely half. Only the senior managerial slots offer any real security and they are mostly taken by outsiders. Much the same could be said of the armies of food preparers, domestic carers and data-entry workers who account for so many of the new service jobs America is creating.

“We are on track to becoming a country where the top tier remains wealthy beyond imagination, and the remainder, in one way or another, are working in jobs that help make the lives of the elites more comfortable,” says Harvard’s Lawrence Katz, one of America’s foremost labour economists. “They will be taking care of them in old age, fixing their home WiFi, or their air-conditioning, teaching or helping with their kids and serving them their food. It is not a very elegant prospect.”

Of course there is one series of actors that have been in the casino game for some time.  The Native American Nations within the United States.  Although they have constitutional standing, the actual powers that these "Nations" have, has been rather limited historically.

However, to avoid loosing a lot of land claims based on broken treaties, the United States government began trading off casino rights for land a few decades ago.  Of course that isn't how it is described, but the big land arguments seem to have gone away with the gambling proceeds.

The Economist, 7 April 2012

But casinos also bring problems. Some tribes consider gambling a vice. This is why the Hopi, for instance, have rejected gambling, and why the Navajo repeatedly voted against it in referendums before grudgingly accepting it for the revenues it brought in. In other cases, gambling income perversely reinforces a culture of dependency, as some tribal members wait passively for their profit share.

Indirectly the casinos have also highlighted some bizarre, sometimes unsavoury, aspects of tribal sovereignty. One of the biggest problems has always been deciding who is or is not a member. Most tribes do this with blood-quantum laws. An individual must prove that, say, a quarter, an eighth, or a sixteenth of his “blood” is from a given tribe.

Casino money has brought out the perversity in these rules. In California alone more than 2,500 Indians have been “dis-enrolled”—ie, cast out—from their tribes because political enemies or greedy administrators have suddenly discovered doubts about distant bloodlines. The motive is to share gambling revenues among fewer members. For the outcasts, this can mean losing tribal housing, education, welfare and sometimes cash payments, not to mention identity and community...

The bigger question is whether sovereignty in general and gambling in particular have, on balance, improved the lot of tribes. Unfortunately, any progress is patchy and slow. In the 2010 census 28% of American Indians were poor, compared with 15% of the whole American population. Their median household income was $35,062, compared with $50,046 for all Americans. They are, on average, less educated and less likely to have health insurance. Most of the 2.9m American Indians now live in cities, including many of those who are better off. So poverty on the 334 reservations (not all tribes have one) is worse than these numbers suggest.

Unemployment is astronomically high. Mr Lupe estimates that it is 80% for the White Mountain Apache (others estimate it at nearer 65% on that reservation). Alcohol and drug abuse are endemic, as are obesity and diabetes. Violent-crime rates on reservations are twice the national average, according to the Justice Department. American-Indian women are four times as likely to be raped and ten times as likely to be murdered as white American women.
So while the casinos obviously bring in money, it is not clear that they are a net positive for the tribes as a whole.  You have the usual splitting of economic groups that seem to occur in these situations.  Some get up and move, to become part of society as a whole, and others hang on to their home turf, holding onto whatever incidental benefits that entail, and slowly fall further behind.  The unfortunate results of the lack of jobs on Indian reservations, the inner cities, Puerto Rico, etcetera is to create little microcosm two tier societies.  The handouts keep some people comfortable.   but the and certain people who are in the advantage of being able to skim "rents" of the top (the financier-political class) can do very well if their numbers are small.  But the normally ambitious are often forced to move on.

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