susan steward


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



1 NY Yankees



1 Tampa Bay Rays



1 Toronto Blue Jays



2 Baltimore Orioles



3 Boston Red Sox





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



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


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.


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.



Is hosting the Olympics worth the investment?
The winter and summer Olympic Games encompass significant work on behalf of the host cities. Before the Olympic Games begin, construction activity and preparation occur years in advance. One of the most frequently asked question once the Games are done is, “does the time and money invested to host the Olympic Games really benefit the host country?” One can assume that, aside from the pride gained in hosting, countries are expecting some benefit from their investment.


Sochi-2014-Company-OlympicsThe 2014 winter Olympic Games were hosted in Sochi, Russia, home to 343,000 citizens. This year’s host country invested significantly in the opening ceremony to boost tourism and create a lasting legacy. The ceremony featured a record 88 countries, 66 world leaders, and 800 performers. The cost to host this year’s winter Olympics in Sochi was an estimated $51 billion—a record high investment. Approximately 235 projects were facilitated to prepare for the Olympics, such as repairs to infrastructure and new housing for local residents. Through improvements due to the many projects and the added tourism of the games, the city is expecting to see a lasting positive effect on the economy.


Economists…in agreement?
Recently, National Public Radio (NPR) ran an interesting story regarding the long-term impacts of the games. One of my favorite parts of the story is this line: “Economists are notorious for being unable to agree on anything. So it’s striking that on the finances of the Olympics, they almost all agree.” Opinions usually point to the fact that once the games are over a country mostly ends up with an indebted city. This is almost in direct contrast to the expectations of Government stakeholders.


The British Government, in particular, claims that they were different. A report (nearly 1,000 pages) estimates that they earned at least $1 billion more than the $15 billion they spent to host the 2012 Summer Games. However, there has been a lot of criticism of the report, mostly because the report was funded by the government. Max Nathan, a London economist for the National Institute for Economic and Social Research, claims that it is too soon to really gauge whether or not hosting the London Olympics was worth the investment.


Photos Tell the Tale
Perhaps more telling than any economic report are images from past cities that have hosted the games. A photography project ( led by Jon Pack and Gary Hustwit visits cities such as Athens (2004), Barcelona (1992), and Beijing (2008). The conditions they found in some of these Olympic villages are a far cry from their grand expectations. Some have been turned into prisons or malls while others have been left to decay.

Athens—Faliro Olympic Beach Volleyball Center - Photo credit: NBC News

Athens—Faliro Olympic Beach Volleyball Center – Photo credit: NBC News

It will be interesting to see what happens to the facilities in Sochi now that the Games have ended. How these facilities will be used in the future will say a lot about the long-term benefit to Sochi. According to Forbes, for some past host cities and countries, the Olympics have marked the transition to being a world player. They cite Tokyo (1964), Seoul (1988), and Beijing (2008) as prime examples. For Russia as a whole, the hope is that the Olympics has given the country a bigger starring role on the international stage and laid the groundwork for future international investment growth.



Every February, restaurant reservations at romantic spots become very scarce, heart-shaped gift boxes of chocolates sell like hotcakes, and the price of a dozen roses seemingly rises along with the stress level of any one who is in a relationship and is looking for that perfect Valentine’s Day gift.  According to the National Federation of Retailers, an American will spend $133.91 on average on Valentine’s Day gifts, compared to $130.97 in 2013. However, only 54% of those surveyed will celebrate the holiday—down from 60% in 2013.


With the advent of the internet and smart phones, Valentine’s Day gift giving patterns may be changing. More than 40% of consumers will shop online or use their smart phones to purchase a Valentine’s Day gift. So, gone are the days of men (I say men as a majority of the Valentine’s Day spending, by over half, is done by men) dashing into a florist or jewelry shop to buy whatever is available on the way home from work. This is important, as over half of the women would dump their boyfriends if they did not get something for Valentine’s Day. Even a card would suffice, and Valentine’s Day is the next most popular holiday after Christmas for cards.


However, while the means to purchase Valentine’s Day gifts has changed, the mix of gifts have not changed; it is still cards, candy, flowers, dining, jewelry, or some combination of the above. Gifts of gym memberships or fitness equipment are usually not well received.


Women prefer to receive their gifts in the evening after nice dinners, while men prefer to get their gifts in the morning. With the exception of friends, most people will spend more on their pet for Valentine’s Day than on their coworkers, classmates, and teachers. Condom sales spike by nearly 30% on Valentine’s Day, and the month of March is usually the biggest month in sales of pregnancy tests. This figure is not surprising as 85% of men and women consider sex an important part of Valentine’s Day. Moreover, over 10% of couples get engaged on Valentine’s Day.


While Valentine’s Day retail sales are nearly $20 billion, Christmas retail sales are nearly $270 billion. However, forgetting a gift on Christmas may not have as significant an impact on your romantic relationship as forgetting a gift or getting the wrong type of gift on Valentine’s Day.

Image credit: Tada - click the image to view full Valentine's Day infographic

Image credit: Tada – click the image to view full Valentine’s Day infographic



As the legislative session marches on, Maryland lawmakers and supporters are proposing to raise the minimum wage.  A number of bills have been introduced that increase the minimum wage to as high as $12.50 per hour.  At the current minimum wage rate of $7.25 per hour, a full-time worker would bring home approximately $15,000 a year—well below the poverty line of $23,050 for a family of four that is currently set by the federal government.


The minimum wage is one of the topics that economists most like to debate and theorize about. For instance, the traditional model of economics explains that, in a market where supply and demand maximize employment, an artificial increase in the wage rate (such as an increase of minimum wage) will reduce employment. Alternatively, other theories posit that increased wages translate to more spending and therefore more demand for goods services—driving the demand for employment upward. Other theories look at it from the supply side of the equation. The belief is that, when workers are earning better wages, they will be encouraged to work harder and be more productive. The extra cost incurred by businesses for higher rates will be offset by increased productivity and output. The ultimate impact will vary since labor markets each have their unique characteristics. The true impact of wage increases will vary by geographic location, type of industry, and labor market composition.

minimum wage

Image credit: Marguiles (Click for full size image)


The majority of the opposition comes from retail or food-related business owners who say that increased labor costs will severely impact their bottom line and increased costs would drive them to have to decrease their staff. However, other business owners do not share in that sentiment. Some argue that better pay equals lower staff turnover (which can be extremely costly) and can impact the success of a business venture.


Clearly, the economics of the minimum wage debate are highly nuanced. The ultimate impact on Maryland is difficult to determine without thorough analysis and projections. What we do know is that Governor Martin O’Malley is fully in support of raising the minimum wage during his last term in office.

Dyan Brasington

Dyan Brasington

One of the most rewarding organizations I participate in is the International Economic Development Council (IEDC).  As an economic developer at heart there’s no other professional organization more critical to moving our industry and mission forward.


I am so excited to be facilitating a roundtable discussion on Building the Network: Local and Regional Partnerships at the upcoming IEDC Leadership Summit. The interactive format allows an exchange of information and ideas on this key economic development topic, as practitioners learn to lead and create new opportunities in today’s global economy.


There are five reasons I think this conversation will be both enlightening and exciting and also why anyone attending the summit should plan to attend:

    1) Nevermore was the term “think globally, act locally” more important

    2) A sustainable Global city needs global networks

    3) Understanding the advantages of regional and world-wide connectivity is a 21st century imperative

    4) Building partnerships is key to leveraging assets and moving forward faster

    5) Sharing ideas and best practices is fun

After the Summit, I’ll report back the big takeaways. If you are attending the Summit and want to attend, just mark your calendar for 7:30 AM on February 4th.



As we are carving into our turkey (or tofurkey if you don’t eat meat) and enjoying the company of our families and loved ones (dysfunctional as they all may be), many retail employees will have already have worked a full day. Many stores will have been open since 6:00 a.m. to offer great, budget-pleasing deals to hardy shoppers.  This raises the question: why?


There are two challenges that face retailers. First, how do you squeeze out more shopping time between the Friday after thanksgiving and Christmas morning? Second, how do you top last year’s deals?  According to many sources, about 20 percent of the retail industry’s sales occur between Black Friday and Christmas.  Retail sales are expected to rise by about 4 percent. The holiday season can make or break a retailer, so this is a very important period.


Image credit: Joe Heller

Image credit: Joe Heller – Click the image to view more cartoons

A little history: the Friday after thanksgiving was named “Black Friday” by Philadelphia merchants in the early ‘60s.  It was considered a negative as it was named to describe the downtown crowds and traffic on both Friday and Saturday.  Now, it’s considered to be the official start of the holiday shopping season.  As internet shopping became more commonplace, and online retailers inevitably participated in this bacchanalia of shopping, a new term was coined in 2005: “Cyber Monday.” The term refers to the Monday following Thanksgiving. Cyber retail sales have more than doubled from $600 million to just over$ 1.4 billion between 2005 and 2012.


Retailers have addressed the first challenge, in effect, by creating one more shopping day—Thanksgiving Day.  The logical question, then, is whether this current event is a one-off or whether it will become the norm.  Will we soon have “Purple Wednesday,” the day before Thanksgiving Day, as a shopping day?


Retailers try to address the second challenge by offering goods that have very high perceived value: flat screen TVs, laptops, computers, etc., at a very low price.  Although this is becoming harder and harder with each passing year, I suspect that retailers will figure it out.  I am hoping that one day soon I can buy a new car as a gift on “Green Tuesday” at 1:00 a.m. for very little money, assuming I am one of the first five people in the door.



The Senate is scheduled to vote this week to advance the nomination of Janet Yellen for Chair  of the Federal Reserve. If confirmed, Yellen would replace Ben Bernanke next January. There has been a lot of talk and controversy around her nomination. Yellen would be the first woman to chair the Federal Reserve, so that has definitely drawn some attention. She has faced opposition from some Republicans who oppose the current direction of the Federal Reserve’s policies. However, this all leads us to the question: just how important is the Chair?


Let’s first begin with a quick summary of what the Federal Reserve is and what its purpose is in our economic system. The Federal Reserve is the nation’s central bank and controls the supply of money in the economy. It ensures that banks have plenty of money to meet their obligations, and it can step in to provide loans to these banks if necessary. The Federal Reserve Chair is essentially the CEO of the whole operation. The Chair doesn’t have sole responsibility for the actions and outcomes of the system but is often held liable for any missteps. The Chair is part of a seven-member board that makes decisions regarding monetary policy. Their power comes from being able to influence the ultimate outcome of the board’s decision by setting the agenda of each meeting and refereeing the discussion.


Image credit: Cagle Cartoons

Image credit: Cagle Cartoons


All signs indicate that Yellen will likely continue to support the expansionary policies that Bernanke has supported. During her confirmation hearing, she made it clear that she would keep interest rates low to continue fueling employment growth. What this means is a continuation of low long-term interest rates.  Evidence of the success of this policy is mixed and many argue that it has not been successful at all. After all unemployment remains high even amid the lowest interest rates in history.


Without a doubt, Yellen’s resume is impressive. She certainly has the experience and knowledge to do the job. However, the main question is and will be: will she able to know when to pull back the reins before it’s too late? Critics believe that this policy of easy money has inflated the stock and real estate markets possibly creating another asset bubble that could eventually burst. If that is the case, it would mean a catastrophic blow to the economic recovery.




The Regional Economic Studies Institute (RESI) hosted its 17th annual Economic Outlook Conference on November 6th, 2013, focusing on the film industry and its challenges, future, and impacts. The conference this year was comprised of two separate segments—one focusing on the economy and the other on the film industry in Maryland. The title for this year’s economic outlook presentation was The Sum of All Fears. The presentation provided a current and long-range view of the economic indicators affecting Maryland and the U.S. economy. In addition, it focused on the five years since the financial meltdown and how the national economy has managed to recover.



Keynote Speaker Kevin Kilner with RESI Staff. Click the photo to view more!


Let’s be honest, sometimes presentations full of data and charts can start to get a little boring. To keep our audience engaged and spice up the data, RESI utilized Prezi—a relatively new presentation software. This new technology helped to keep the presentation exciting and entertaining. We received lot of positive feedback about it so we are excited to keep using it for future presentations. Our keynote speaker this year was well-known Baltimore native, film, television and stage actor, Kevin Kilner, or “Senator Kern” from House of Cards. Not only did he provide the insider’s perspective on the film industry, he was also very passionate about the filming that is done in Maryland. Kevin brought a lot of excitement and energy to the conference. Can’t wait for next  year! Any ideas what our next conference theme should be?


Here’s a video that highlights a few segments of the 2014 RESI Economic Forecast:




Imagine a situation where a major employer calls to ask you how they stack up against other businesses in terms of their economic contribution to the community. Or recall an encounter that leaves you wondering why a business chose to locate in a specific location over another. What better way to explain to your local businesses, developers, clients, members, and constituents how the business community is performing than through actual data? We think about these types of questions all the time at RESI, and have come up with a solution to providing a quick, reliable response for our clients.


RESI is pleased to announce a new suite of client services around the National Establishment Time-Series, or NETS, database. The NETS database has been used widely by researchers, local governments, and private firms to develop robust analyses of the following:

  • Business type, as categorized by North American Industry Classification System (NAICS) code
  • Business characteristics, including annual sales and number of employees
  • Business activity and location decisions, including openings and closures, expansions, contractions, and in- and out-migration
  • Relocation behavior, such as move year, origin and destination, distance of move, and type of location

NETS enables developers, local officials, public agencies, and economic developers to evaluate and communicate business activity in their jurisdiction. The database contains over one million establishments in Maryland going back to 1990 and is updated annually. Over 300 fields contain unique business-level information that can be used to create a customized profile of the business activity or a specific industry or geographic area. Other data sources can be combined to develop business recruitment and retention strategies, conduct policy analyses, and more.


NETS enables RESI to provide answers to questions such as the following:

Economic Development Organizations and Local Government

  • What types of companies are relocating to a specific area or employment center?
  • What are the impacts of tax changes, tax incentives, and regulations on local business decisions?
  • What linkages and clusters exist?
  • Who’s likely to move within an industry or geography?

Many factors feed into the site selection decision: the local economic climate, the available workforce, potential partners (and competitors) nearby, taxes, and incentives.

  • What’s the local economic climate?
  • What is the composition of the local workforce?
  • Who are potential partners and competitors?

RESI can also create custom animations that tell the story in images rather than words. Below is an illustration of business “births” and “deaths” in the state of Maryland by zip code since 1990.

 photo TEST2-1.gif

‘National Establishment Time Series (NETS) Database
Illustrating business openings and closures in the manufacturing industry by Maryland County between 2006 and 2010. Notice the trend in in manufacturing business closures in central Maryland counties between 2008 and 2009. Many of which return in 2010.


RESI also conducts impact analyses for development projects in order to evaluate the potential economic contribution in terms of number of new jobs, wages, and tax revenues associated with the project. By knowing as little as the projected number of residential and commercial units, square footage, and amenities, RESI can evaluate the local community and define potential success drivers, illustrating whether project specifications will meet the market demand. This is a valuable step in the real estate development process during the site selection phase and can ensure that the project meets performance and financial goals in the short and long-term.


So when you are looking for answers to questions on the business dynamics in your jurisdiction or market, keep RESI in mind as your one-stop-shop for actual business data and analysis. RESI can provide innovative solutions your business needs through summary data development and analysis for a specific industry, development project or geographic area.