Daraius

Daraius

Later this month, a fifth casino will open its doors in Maryland, and in about two years, a sixth casino will open its doors. My question is this: Is there a sufficient consumer base to support this growth, or are the new casinos cannibalizing revenues in Maryland and the surrounding states in the region (New York, New Jersey, Pennsylvania, Delaware, West Virginia, District of Columbia, and Virginia)?

 

About thirty years ago, two states—New Jersey and Nevada—had casinos. For New Jersey, Atlantic City was the gambling destination for the East Coast; Las Vegas was the gambling destination for everywhere else. Additionally, Indian casinos came into prominence in the 1980s due to a Supreme Court ruling. However, in the last decade, the nation and the Maryland region have experienced an explosion of casinos and other gambling venues. The adult population or, more specifically, those who identify as wanting to gamble is not keeping up with the growth in the number of casinos opening in the region. Between 2000 and 2012, the adult population in the region (New York, New Jersey, Pennsylvania, Delaware, West Virginia, District of Columbia, Virginia, and Maryland) grew by 9 percent. However, the number of casinos grew by 183 percent during that same period.

 

Declining Gambling Revenues
As a result of this explosive growth, the media are full of reports on the share of gambling revenues declining across the region. This decline has resulted in several casino closures in Atlantic City. The gambling revenue is down in Delaware as well. In fact, there is a proposal to provide a subsidy to the casinos there. Gambling revenue is also down in West Virginia and Pennsylvania. Hollywood Casino Perryville saw a drop in its revenues once Maryland Live! Casino opened in Arundel Mills. I suspect that, when the Horseshoe Baltimore casino opens at the end of this month, Maryland Live! Casino will see a similar drop in revenue. Furthermore, when the MGM National Harbor casino opens in two years, another drop in Maryland Live! Casino’s revenue is likely to occur.

 

Image credit: South Bmore

Image credit: South Bmore

What is the underlying trend fueling this growth in casinos?
First, many states introduced lotteries as a means to raise additional revenues earmarked for specific programs such as education. Many states saw the success of other state’s gambling ventures and began to introduce gambling in their own jurisdictions, partly to keep their residents’ gambling spending in the state and partly to attract out-of-state gambling expenditures. The tax rate on gambling revenues is usually very high, but casinos are willing to pay due to the profitability of gambling ventures. For Maryland, it is a means for generating additional revenue as well as an economic development opportunity.

 

The economic development aspect of introducing casinos is somewhat tricky, and timing is everything. Being the first state outside New Jersey to allow gambling allows that state to generate enormous tax revenues and economic opportunity, as many out-of-state visitors are attracted to the new casinos. However, being the last state to allow gambling means that the number of new gamblers visiting from out of state is very limited.

 

Furthermore, the shifting in-state spending from local restaurants to local casinos does little in the way of increasing local economic activity. However, if local casinos can capture out-of state spending, then there will be an increase in local economic activity. In the Mid-Atlantic region—New York, New Jersey, Pennsylvania, Delaware, West Virginia, District of Columbia, Virginia, and Maryland—all but two, Virginia and District of Columbia, have legalized gambling. For Maryland and West Virginia, this disparity has proven to be a great geographic advantage, as Virginians and Washingtonians who wish to gamble can go to either West Virginia or Maryland to spend their money. However, within Maryland, the share of clients to each casino will likely drop as the number of casinos increases.


Ellen

Ellen

The usually quiet Monday after the long Fourth of July weekend—a day for downtown Baltimore to recuperate from the crowds, festivities, and celebratory revelry of democracy. Unless, of course, Queen Bey is taking over M&T Bank Stadium.

 

As part of the combined “On the Run” tour featuring Beyoncé and Jay-Z, the power couple performed at the M&T Bank Stadium to a sold-out crowd of excited fans. The downtown venue was just one of sixteen stops for this summer’s tour, which attracted concert-goers from near and far.
 

ontherun

Image credit: CBS Baltimore

 

Here at RESI, we analyze the economic impacts of various programs and events, and last month’s Beyoncé/Jay-Z concert had a definite impact on Baltimore’s economy. With ticket prices ranging from $40.50 to $251 for general admission seats and premium seats going for roughly $500 per ticket, ticket sales alone for the sold-out stadium of 70,000 represented a huge economic impact. Combine these data with concert-goers grabbing dinner downtown before the concert, paying for parking, and buying souvenirs—that’s a lot of money changing hands in just one evening. And keep thinking about it—someone had to sell those Beyoncé t-shirts and oversized programs. The electricity bill for the stadium included the power needed to show the Beyoncé/Jay-Z video interludes, and this required electricians and tech people at the stadium to ensure that everything transitioned smoothly. Outside the concert, servers who received extra tips from the increased crowds have extra cash to spend. If anyone drove on a toll road to get to the concert or travelled from far away and spent the night at a local hotel, there’s more money circulating in the local economy.

 

In fact, the economic impact of large headline concerts such as “On the Run” has been the topic of numerous academic studies. In their 1997 paper, Gazel and Schwer estimate the economic impact of a 1995 Grateful Dead concert on Las Vegas. While not a perfect point of comparison to Baltimore’s Beyoncé/Jay Z concert, the framework outlined in this paper as applied to the July show suggests that, at a conservative estimate, the estimated economic impact was over $11 million, with more generous estimates of the economic impact from the single concert being closer to $18 million.
 

beyonce2

Image credit: Baltimore Sun

 

Another way to analyze the concert’s impact is to bring the analysis closer to home. Let’s consider the M&T Bank Stadium’s main occupant, the Baltimore Ravens. Ticket prices are comparable, and much like the Beyoncé/Jay Z concert, Ravens games draw huge crowds of dedicated fans to the stadium, attract visitors to Baltimore’s downtown area, and are featured in both local and wider media. I would argue that the concert, a one-night engagement, as opposed to the Ravens’ full-length season of home games, is more comparable to a playoff game held at the stadium. Luckily, for our purposes, estimates of the economic impact of Ravens playoff games already exist. Estimates from 2013 indicate that a single Ravens playoff game would have a total estimated impact of $20 million. That’s quite a lot of money, especially for a two-hour football game or show.

 

Clearly, the Beyoncé/Jay Z show had more of an impact than entertaining its 70,000 attendants. Given the far-reaching economic effects for Baltimore, it is safe to say that, in the words of the Queen herself, “Who runs the world [or at least local economies during her tours]?” Beyoncé.


susan steward

Susan

Loyalty programs have been around for ages. The idea behind them is to gain information about consumers, then tailor a store’s offers to them to increase their spending in store and to ward off competition. Often, these programs were done on a store-by-store basis and offers were targeted for their stores alone. However, in the last few years the economy has witnessed the emergence of cross-store loyalty programs. For example, gas rewards and grocery stores.

 

Currently there are several versions of this program.  For example, the grocery chain Giant has partnered with Shell and, similarly, Safeway has partnered with Exxon/Mobil. Under these programs, a consumer purchasing their weekly groceries at Giant or Safeway can swipe their “Bonus” or “Rewards” card and redeem savings on their groceries. Then, the additional cross-store rewards begin. The store states that for every dollar a consumer spends, they will receive a specific number of gas rewards points. Using their newly accrued rewards points, grocery consumers can proceed to the pump and enter their card number, redeeming these points to reduce their per gallon price for gas.

 

As Morgan and Hunt (1994) state in their research, these programs operate under the assumption that both the consumer and the retailer are committed to specific brands. However, as Liu (2007) points out, the consumer preference for grocery stores and gasoline brands may be relatively low and therefore the tradeoff between brands is relatively easy for consumers. In a review of consumer loyalty programs, Liu (2007) does find that over a period of time consumers will often continue to shop at the same retailers and increase spending levels under loyalty programs. According to Kim, Shi, and Srinivasan (2001), the increased demand through loyalty programs has an advantage for stores as well because this will inadvertently increase their tradeoff between firms for the same goods.

 

Savings at the Pump and Increased Disposable Income

At RESI, one of our favorite things to do is to consider general, everyday issues in relation to Maryland’s economy. Often, this results in us doing a bit of background work and then determining inputs for our REMI model. Thinking about gas rewards programs and their impact on Maryland’s economy, some questions arise.  Taking into account the gas rewards savings on an annual basis across households, what would this translate into for Maryland’s economy? What would this increased annual savings across households look like in REMI?

 

Disposable Income Changes

RESI always needs some primary data, and, given the short timeframe, the group needed a guinea pig. Thankfully, at least one employee shops at one of these grocery stores weekly and saves their receipts. This same employee visits the pump at least every two weeks, and happened to save their receipt this week.

 

Image credit: RESI

Image credit: RESI

 

The photo above shows the receipt on the bottom as the employee’s current rewards amount, and the receipt on top was their savings at the gas station that week from rewards over a two week timespan. It’s unlikely most people will save $0.60 per gallon every time they go to the gas station, but it is reasonable to suggest a $0.10 savings given the employee’s current gas rewards points.

 

RESI then took this $0.10 savings and multiplied it by 15, as the average fuel tank size in Maryland is 15 gallons. Therefore, if most people fill their tanks at the close to empty mark this translates to roughly $1.50 in savings on each trip. Over one month, this could equate to roughly $6.00 in savings.  Over a year, these savings would increase each consumer’s disposable income by $72.00. Although this isn’t much to a consumer, there are roughly 2,598,000 automobiles registered in Maryland as of 2009 according to the U.S. Federal Highway Administration. If at least 50 percent of those vehicles were to take part in this loyalty program and save $72.00 a year that would increase Maryland’s total household disposable income by $93,528,000 a year.

RESI ran this increased disposable income in REMI and found the following:

Jobs Output Wages
172.0 $19,567,000 $7,782,000

Source: REMI PI+, RESI

The reallocation of the disposable income from consumers supported 172 jobs, $19.6 million in output, and $7.8 million in wages in 2013. What does this do to prices? According to RESI’s analysis, although the price of consumer goods would increase, the change would be relatively small across the economy. Areas such as transportation services, motor vehicle fuels, and food and beverage purchases for off-site consumption (grocery) would see relatively small increases (less than half a percent).


Daraius

Daraius

A long time ago, in a business cycle far, far away there was a great recession. Before this recession, jobs were plentiful, high-paying, and secure. The recession officially ended in June 2009, and, according to economists, I included, the economy has been in recovery for the last 60 months – one of the longest periods of recovery in the post-war period.  The stock market has soared to new heights and while energy prices still remain high, they haven’t spiked too much in recent years. In fact, the US is now a leading producer of hydrocarbons. The US has also enjoyed one of the lowest interest rate environments in its history. As a result, the housing market has picked up and consumers are spending again. In spite of all of the signs of an economic recovery, it still does not feel like an economic recovery. There is a disturbance in the force.

 

The Number of Jobs Created & the Challenge of the Long-Term Unemployed
A couple of factors are driving that disturbance. While nationally, the number of jobs being created every month has been impressive, they have fallen short of the need to fill those jobs that were lost as well as those jobs that should have been created. The difference is noticeable, and I had to ask, “aren’t you a little short for a recovery?” Moreover, the challenge of the long-term unemployed continues to cast a shadow over the recovery and we often mutter a prayer that we are not one of them. While these two factors contribute to the feeling of recovery malaise, there are two other often over looked factors that also contribute to that disturbance—part time jobs and the wages of the post recessionary jobs.

 

Part Time Jobs
The percentage of jobs classified as part-time has risen quite dramatically as the economic recovery has evolved. Nationally, the part-time job percentage has gone from less than 16% to over 19%. This could be a result of the types of new jobs being created. In fact, nearly 40% of the new jobs created in the post-recession period were in retail, food service, and temp jobs, which tends to have more part-time jobs than say the manufacturing sector. It seems the recovery is trying to pull a Jedi mind trick on us, but these are, in fact, not the jobs we’re looking for.

 RESIemploystatusgraphic (2)_small

Wages of Post-Recessionary Jobs
The second factor is the quality of jobs being created and by quality I am implying wages. The National Employment Law Project recently published findings supporting our analysis. While the economy has created jobs, the median wages of the jobs created fall dramatically short of the median wages of the jobs lost. In the US, fewer mid and high wage jobs were created than were lost, but more low wage jobs were created during the recovery. Sadly, this same phenomenon is repeated here in Maryland as illustrated by the infographic below.

RESIjobsinfographic_small

The challenge before us is to ensure that we as a nation or as a state do not end up with a labor force comprised of part-time workers earning low wages. Are you worried? We find your lack of faith disturbing.

 


Guest Blogger - Jade Clayton

Guest Blogger Jade Clayton

At the Division of Innovation and Applied Research, we’ve long recognized the potential for Maryland to be a leader in establishing business opportunities where IT marries other industries, whether its counterpart is education, construction, or health care. We’d be remiss if we didn’t mention the winner, Rehabtics, and runner-up, Tutela Bedside Technologies, of TU Incubator’s 2014 Business Plan Competition; both are Maryland-based start-ups innovating in health technology. In recent months, we can’t help but notice the increasing buzz of health technology and questions on whether Maryland has what it takes to nurture an industry that improves patient care while increasing ROI for providers.

 

Image credit: Next City

Image credit: Next City

 

RESI staff attended the Maryland Economic Development Association (MEDA)’s Summer Conference on Maryland’s health technology industry, and we were blown away by the complex and innovative nature of this emerging industry. Evident from discussion at MEDA’s conference, Maryland has an opportunity to be a leader in nurturing health technology, because Maryland is one of few east coast states with the necessary infrastructure in place. The conference kicked off with three overarching themes: health care access, quality, and affordability through technological innovations.

 

The exact definition of health technology remains elusive, but MEDA provided a definition for one sub-sector, mobile health. Mobile health is defined by MEDA as “the use of wired or wireless technology to improve health and care delivery.” Within mobile health, there are so-called wearables and applications that are probably the most well-known products birthed from the health technology industry. The good? These consumer products improve the user’s wellness and get patients engaged in their health care. The bad? Accessibility issues persist for aging and rural populations who are slower to adopt technology, in some cases due to lack of reliable broadband access.

 

Image credit: Direct Marketing News

Image credit: Direct Marketing News

To achieve accessible, high-quality, and affordable health care through innovative technologies, there has to be a workforce trained on how to use the technology, protect the technology and its users, and analyze the technology to inform future innovations. As one panelist roughly quoted John Naisbitt, the industry is “drowning in data, but starving for knowledge.”

 

What are the barriers to entry? How can mobile technologies be HIPAA compliant? Is the workforce trained to effectively use new technologies? Who are the major players? Will technology make health care more equitable? Finally, what is health care technology, really? RESI’s curiosity is certainly piqued, and we are well poised to help answer these questions. Just ask!


Julie

Julie

Having lived in Wales for the past nine years, I am a recent transplant to the Towson area. As is the case with many people who have recently moved, I often explain my current location and my previous location by referencing the largest city in each respective area—Baltimore and Cardiff. The interesting thing about these two cities is their interconnected history, which I have become quite familiar with over the last year. Despite their size difference, the similarities between these two cities have been recognized by travelers, bloggers, and academics for years.

 

As a result, for my first blog post as a new member of the Towson University community, I thought that the best way to introduce myself and my research interests (hint hint: regional economic development) would be to focus on the use of Baltimore’s Inner Harbor as a model for the regeneration and long-term economic development of Cardiff Bay. Historically, both cities were based around active ports, which were importing and exporting goods to and from the local area as well as from farther afield. Interestingly, at similar points in time, both ports were actively exporting coal that was mined in the surrounding area.

 

Cardiff
In the case of Cardiff, coal was mined in the South Wales Valleys, transported by rail to Cardiff Bay, and distributed globally by water. At the end of World War I, Cardiff Bay was considered the largest coal port in the world. A decline in production followed World War II. Since the Thatcher era (1980s), the South Wales Valleys’ coal production declined significantly and has more or less ceased in the whole of the region.  With the decline in coal production came the decline of the docklands area in Cardiff Bay. Currently, the main port facilities for the wider region are located in Milford Haven, West Wales, which boasts important routes to the Middle East due to the transport of liquefied natural gas.

 

Baltimore
In the case of the Port of Baltimore, coal was (and still is) a major export industry. Coal travels by rail from mines and production facilities both within and outside the state to the port and is then distributed globally. Due to its geographic placement on the Eastern seaboard, the Port of Baltimore has been a key part of a popular shipping route that has been in continuous use since the early-1900s through the present. The port facility makes a considerable economic contribution to the state, with the movement of 36.7 million tons of international goods that have an economic value of approximately $60 billion. In addition to the existing economic activity, the opportunity for increased use of the Port has opened up due to the recent expansion of the Panama Canal.

 

Similar to the regeneration of Baltimore’s Inner Harbor in the 1960s, Cardiff Bay underwent a regeneration 20 years later. The regeneration of Cardiff Bay began in the late 1980s with the aim of increasing employment, commerce, and tourism in the former docklands area. In addition, the regeneration had the overarching goal of linking the city with the seaside area used by the previous port facilities. Based on the successful regeneration of a similar port area (both in size and scope) in the case of Baltimore’s Inner Harbor, the local government of Cardiff decided to model its efforts on the Inner Harbor. Through a public-private partnership estimated at $4 billion, the same horseshoe-shaped design was planned and implemented in the mid-1990s. However, with the some of the strongest tides in the world, the Cardiff Bay project also included the construction of a 0.75-mile barrage to ensure that the water level within the Bay remained stable for maritime activities. The construction of this lock system was estimated at $180 million. These two components—the spatial regeneration and the barrage construction—worked together to recreate the Inner Harbor in Wales and promote the tourism industry and, more recently, the creative industry in the region.

 

The Inner Harbor and Cardiff Bay

Baltimore Inner Harbor Cardiff Bay - Wales
Inner Harbor – Image credit: Greg Pease Photography Cardiff Bay – Image credit: Visit Britain

 
The regeneration efforts in Cardiff Bay have been the gift that keeps on giving to the regional economy of Cardiff. Building on the success of the tourism industry, the major universities clustered in the wider Cardiff area, and the proximity of major TV and film studios to the Bay, Cardiff Bay has also emerged as a creative industries powerhouse that is now the home to the BBC Drama Village and other major creative firms. One of the main reasons that these creative entities were interested in the Bay was due to the space, the tourism-related industries, and the view—none of which would have been possible without the design-led regeneration from the 1980s.

 


susan steward

Susan

Baltimore has long been in a state of transformative flux. The late 1950s gave rise to a growing desire to leave urban areas for suburban ones. Baltimore was one of many urban causalities; recent population estimates for city residents has yet to match that of the late 1950s. However, new economic incentives could reverse this trend.

 

High and long-term unemployment has been a problematic issue for Baltimore for several years. As of 2013, Baltimore had the third highest unemployment rate in Maryland, at 10.1 percent, well above the national average for 2013. A paper released by the National Bureau of Economic Research (NBER) noted that unemployment among lower paid workers could be decreased if labor opportunities within their respective regions were increased, supporting the belief that spatial mismatch can lead to long-term unemployment.
 

800px-Bmore_skyline_inner_harbor

Image credit: Wikimedia Commons

What is spatial mismatch?
It occurs when location of low-skilled, low-wage jobs is so far from the potential employment base that long-term unemployment within urban areas occurs creating a mismatch between employment opportunities and employee availability. The theory was formulated around the rise of suburbia after World War II. Essentially, demand increased for suburban living, and demand for shopping in those areas also increased. Businesses that once thrived in the city began to move away to be closer to their customer bases. Overall, the flight of these employers resulted in a decrease in the availability of lower-skilled, relatively low-wage jobs in cities.

 

Census records of Baltimore’s population from the 1900s to the present outline this specific trend, with record high population for the city in the 1950s, followed by declines through the 1960s with minor increases in the last twenty years. Getting back to spatial mismatch, the theory suggests that long-term unemployment and joblessness among lower paid workers is attributable to the following factors:

  1. Cost of traveling,
  2. Information accessibility about job openings, and
  3. Search incentives for jobs farther away.

What initiatives are being used to combat spatial mismatch?
Looking at Baltimore’s current dynamics, we find that there are opportunities for public transit to lower travel costs for these lower paid workers. Information about jobs openings is becoming more easily accessible through One Stop Career Centers promoted by the Department of Labor, Licensing and Regulation. As for search incentives, Baltimore has plans to further expand its rail lines while also continuing to offer business tax credits for companies to develop mixed-use and residential areas in the city. The tax credits offered to businesses are aimed at shortening the distance between employee and employer within Baltimore.

 

Some of these credits are being utilized to redevelop the Baltimore area. Employment opportunities from new businesses such as the Horseshoe Casino as well as the redevelopment of Old Town Mall are on the horizon, in part from these newly developed opportunities. Additionally, companies are seeking to become part of the city’s culture. A few names include Columbia-based Pandora, First National Bank, R2Integrated, and Lupin Pharmaceuticals.  If this trend continues, Baltimore might be on track for an economic renaissance in the near future. As the gap begins to close, the potential for lowering unemployment durations within the city may increase with these new opportunities.
 

Image credit: Bmore Media

Image credit: Bmore Media


Daraius

Daraius

This past week, I attended my ninth Maryland Economic Development Association (MEDA) annual conference. Each time I attend, I come away feeling smarter and better networked into the community of economic development. This year’s conference theme, “Research to Revenue: Harnessing Maryland’s Intellectual Capital for Economic Growth,” was very timely and interesting. The panels and speakers ranged from venture capitalists to entrepreneurs to practitioners.

 

Conference Overview
One of the key takeaways from the conference speakers and panels was that conventional thinking and practices will get the same outcomes. If everyone is doing the same thing, nothing will change. The opening keynote speaker challenged the way economic development practitioners view technology transfer projects. The closing keynote, a venture capitalist, suggested that economic development may have added success if states or localities invest in start-up companies outside the region and, if successful, then bring them to the state or locality to permanently set up shop.

 

My Presentation
I had the opportunity to present our work on the National Establishment Time Series (NETS) data. These data have 45 unique attributes for each company such as number of employees and sales from 1990 through 2012. Moreover, all the data are geocoded, a feature that enables us to analyze business trends at the sub-county level. We hoped that this availability of data and our analytical and mapping expertise would enable local economic development organizations to have better information about their counties and the business districts within their counties.

 

Entrepreneurs at MEDA
There were several panels of entrepreneurs who spoke of their challenges with funding, hiring, and the culture within their organizations. While the cultures in each varied dramatically—from a very cerebral quiet office to a rather loud and rambunctious shop floor—all were in agreement that the state and local resources used to assist entrepreneurs were instrumental in their collective success.

 

Finally, the closing speaker offered a great story of combining a family business with technology. Hooper’s Island Oyster Company was started by a waterman using technology, university scientists, and passion to create a sustainably farmed oyster sold locally as well as in the mid-Atlantic region. Moreover, I can attest that the oysters were absolutely delicious. So, all in all, this past MEDA conference was a great success both for the mind and taste buds.


susan steward

Susan

April marks a few beginnings for Maryland this year. House legislation increasing the minimum wage passed, Noah was set adrift from the top of the box office by Captain America, the weather hasn’t been negative twenty degrees, and baseball returns to Camden Yards. Of course, to get into the mood for the season, I like to pull out my collection of baseball movies. This would include the following:

 

 

  • Major League (if you ask, you don’t get it),
  • 42,
  • The Sandlot,
  • A League of Their Own, and
  • Moneyball.

The last one in the list is a new addition to the collection for a variety of reasons. At first glance, most understand the first three films. The last two, however, are always the head scratchers. If you were to categorize my favorite baseball films, there’s humor (Major League), drama (42), childhood (The Sandlot), and economics (A League of Their Own and Moneyball). You may ask, do economics really feature in A League of Their Own and Moneyball? Well, it’s pretty evident in Moneyball, but A League of Their Own?

 

At the core, baseball is a business. In A League of Their Own, the women’s team starts because owners are losing money as men are being enlisted for WWII. Moneyball reflects on the challenges faced by managers with restricted budgets trying to make money and increase their teams’ standings. Baseball franchises pay employees (players) a salary for performing a job (scoring runs).  As a business, the goal is to get the most from players and therefore make a profit.

 

There are a number of factors that go into making baseball profitable. One can be location of the team. If there are two teams within a state, then for every one mile closer the teams are, there will be a 0.07 percent decline in the original, existing team’s attendance. A locational advantage limits the competition of places people can go to see baseball games. Another factor is having a competitive team with a come-from-behind season, because everyone loves an underdog.  Let’s take a look at the current American League East (AL East) standings as of April 14.

 

Rank Team

Wins

Losses

1 NY Yankees

7

6

1 Tampa Bay Rays

7

6

1 Toronto Blue Jays

7

6

2 Baltimore Orioles

5

7

3 Boston Red Sox

5

8

Source: MLB.com

 

In the table above, Forbes marks the Yankees as the most valuable team, followed by the Red Sox, Orioles, Blue Jays, and the Rays. However, when looking at the money on the field since the beginning of the 2014 season, here are the rankings from lowest to highest.

 

Rank Team

Total Salaries of Players on Field

1 Tampa Bay Rays

$36.457 million

2 Boston Red Sox

$65.416 million

3 Baltimore Orioles

$66.446 million

4 Toronto Blue Jays

$70.773 million

5 New York Yankees

$112.467 million

Source: Sporttrac.com

 

The team spending the least amount of money, Tampa Bay, is tied with the team spending the most amount of money, New York, in the AL East rankings. Is it possible to make a winning team on a smaller budget? Well, if the current standings suggest anything, then the answer is yes. Additionally, Boston has been applying a Moneyball type of framework for several years. Apparently, this strategy seems to be functioning just fine for the 2013 World Series Champs.

 

Does a team need to spend like the Yankees to be contenders? At the current standings, Tampa Bay spends nearly half of what the Orioles and Red Sox spend. At the time of this blog, with the roster the Tampa Bay has, the team has recorded 44 scoring runs and 95 times on base, scoring 46 percent of the time they get on base, proving efficiency has its merits on the field. Where does that leave our Orioles?

 

The Orioles’ efficiency for scoring is around 43 percent, above that of Boston and New York (the big spenders). However, competitors like Toronto, which has a 52 percent scoring ratio, and Tampa Bay are spending less and scoring more frequently when on base. If the Orioles can hone in on stopping people from getting on base (especially their AL rivals), and in turn position themselves on base more frequently, then they could have a shot. Additionally, rooting for the home team could help. Ticket sales indicated nearly 2.3 million visitors to Camden Yards last year, an attendance that is closer to the team’s 2003 annual attendance. If supporting the home team can increase runs, then Baltimore rooting for the home team just might yield some positive results this year.


susan steward

Susan

The debate over changing Maryland’s minimum wage from $7.25 an hour to $10.10 has been ongoing since late 2013. The Maryland Minimum Wage Act of 2014 (H.B. 0295) passed in Maryland’s House in February, but concerns regarding community health workers have stalled its progress within the Senate.

 

To date, several studies have analyzed the minimum wage. However, no clear, concise conclusion has emerged from the vast empirical knowledge base. Researchers such as Card, Krueger, Hoffman, and Neumark are some of the bigger names cited when economists discuss the potential impacts associated with changes to the minimum wage. Recent studies of Maryland’s current minimum wage proposal include that of Dr. Stephen Fuller from George Mason University.

 

Dr. Fuller’s team used a version of REMI’s PI+ model to determine the potential impacts associated with changes in Maryland’s minimum wage. However, their analysis looked at the effects of the minimum wage change occurring all at once. The last minimum wage change in Maryland occurred in a series of three-year increments, rising by $0.70 each time until finally reaching $7.25 in 2009. RESI had a brainstorm: “What would happen if they repeated the same technique between 2015 and 2017 to raise the wage from $7.25 to $10.10?”

 

That brainstorm is how this blog post began. RESI used estimates from Dr. Fuller’s report (more specifically, Table 1), data from the Bureau of Labor Statistics to determine industry breakdowns of minimum wage earners, and some good, old-fashioned mathematics.

 

RESI first determined that the increase in wage rates would not be effective until 2015, allowing for changes in the bill before it passes. The second assumption that RESI made: the amount that the minimum wage would increase each year would be $0.95, or the difference between $10.10 and $7.25 spread equally over a three-year period. Third, tipped workers would continue to be paid at 50 percent of the rate of minimum wage. Fourth, full-time employment is 30 hours per week (per IRS definition for the Affordable Healthcare Act). Finally, RESI made some tough decisions about the weights applied for each sector in the model based on annual employment. RESI decided to run the model for an increase in production costs with a simultaneous increase in wages to offset both sides of the economy, producers and consumers.

 

RESI’s analysis suggests that impacts on Maryland’s economy are less negligible compared to Dr. Fuller’s analysis. RESI looked at the changes in the forecast given the policy change from the baseline scenario using full time equivalents. Under the baseline scenario, Maryland’s initial workforce including both full-time and part-time workers in 2020 is about 3.45 million. Under RESI’s analysis, the workforce by 2020 would be 3.44 million if RESI’s assumptions hold true. When comparing full-time (as the data was calculated) to full-time, RESI found that the total overall change is -0.3 percent in potential employment growth for Maryland by 2020.  When looking at the full-time equivalency loss of employment from 2014 through 2020, RESI found that the jobs not realized by 2020 would be 2,900.

RESI_MinimumWage

The above chart shows that, under RESI’s phase-in between 2015 and 2020 (where the final minimum wage change occurs in 2017), private payrolls would be unrealized from their initial forecast by 2,900 full-time equivalent jobs. The sectors falling short of reaching 2020’s current forecasted employment due to the minimum wage change include Retail Trade, Hospitality, and Personal Services. The change is marginal at best, and losses reflected in RESI’s analysis are changes in the current baseline forecast.