TOPICS > Economy > Making Sen$e

Could Brooklyn hipsters help save the middle class?

July 15, 2014 at 8:15 PM EDT
Frozen ginger slushies, tea-based pro-biotic drinks, a bed bug-killing steam machine -- these are just a few of the locally-grown products coming out of Brooklyn’s burgeoning artisan economy. But as popular as these start-ups may be, are they generating more jobs? Economics correspondent Paul Solman takes a look at some of these businesses and the challenges of carving out one’s own career.
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JUDY WOODRUFF: Gwen has just given us a good overview of how the overall U.S. economy is faring.

Let’s take a look now at a much smaller sector of it. It involves that ever-increasing number of small businesses, shops and start-ups around the country that are a bit hipper, more skilled, locally based and creative in their approaches.

But, as popular as they may be, are they generating more jobs? And are they well-paying ones?

Our economics correspondent, Paul Solman, explores those questions and others, part of his reporting on Making Sense of financial news.

PAUL SOLMAN: Brooklyn, New York, it’s gone from backwater borough to capital of cutting-edge cool and to a supposedly new breed of jobs, signified in part by hipsters in the business of handcrafting, single-source chocolate bars sprinkled with sea salt from the coast of Maine, spicy pickles based on Grandma Lala’s secret recipe. All natural, all handmade.

Helping house this corner of the new so-called artisan economy, the old Pfizer factory in Brooklyn’s Williamsburg. Vacated by the big pharma giant in 2008, it’s now a small business incubator, home to dozens of start-ups.

On the floor that local legend has it Viagra was once concocted, some claim at this very lab bench, Kombucha Brooklyn, co-founded by a microbiology major, is brewing a different kind of pick-me-up, tea-based probiotic drinks and kits were making them at home.

DAVID CARRELL, People’s Pops: Ready for a Popsicle?

PAUL SOLMAN: Yes. Yes.

Just down the hall, David Carrell of People’s Pops.

DAVID CARRELL: Here’s what we do, fresh green markets transformed into summer on a stick.

PAUL SOLMAN: Carrell, 31, majored in communications at Florida State University, made it to the mainstream media.

DAVID CARRELL: I was a researcher for Diane Sawyer.

PAUL SOLMAN: And why did you leave?

DAVID CARRELL: It was 2008. So, covering the news, you knew what was coming.

PAUL SOLMAN: The crash of ’08, he means and the jobs it took with him.

Luckily for Carrell, he and two friends had been tinkering with an artisanal alternative, monetizing their Popsicle passion. The partners now employ 45 people making up to 20,000 pops a week.

Rhode Island School of Design grad Bethany Obrecht crafted her commitment to animal rescue into a leash and collar business with a message.

BETHANY OBRECHT, Found My Animal: If you see a dog that is walking down the street and the dog is using a Found My Animal a leash, you know that that dog was adopted. And you know that its owner supports animal adoption.

PAUL SOLMAN: Found My Animal now employs 10, though Obrecht herself is still struggling.

BETHANY OBRECHT: I still work a second job, but everyone here is making a living.

PAUL SOLMAN: Now, these days, start-ups expect a decent incubator to sport a ping-pong table. I learned how far my game has fallen by sparring with the man who helped buy and transform the Pfizer plant, Ashish Dua.

ASHISH DUA, Acumen Capital Partners: We have over 60 artisanal manufacturers that have moved here in the last two years. I would say over a dozen of them have already expanded their business. Now, you are talking about a lot of college-educated people who have thought through this problem and made a financial decision to take care of their own future by building a business that they are passionate about.

PAUL SOLMAN: And what’s the problem with their future?

LAWRENCE KATZ, Harvard University: The basic problem is the decline of what have been the traditional middle-class jobs, the hollowing out of the middle of our economy, and trying to find a new way to provide upward mobility for the typical American.

PAUL SOLMAN: And it’s not just blue-collar jobs, says economist Larry Katz, who has given the new artisan economy its name.

LAWRENCE KATZ: The bottom half of jobs of college graduates has been just as effective as the top half of jobs of non-college graduates. They were the middle management jobs, sales jobs. A lot of those are exactly what new information technology is very good at replacing.

PAUL SOLMAN: But the artisan economy offers other options, not just in small-scale production, but also in services.

So if we had bedbugs, this would get rid of them.

COLIN HICKEY, Green Planet Pest Control: This would kill all the stages of bedbugs.

Meet my artisanal exterminators, Colin Hickey and Todd McNamara, proprietors of Green Planet Pest Control. Both college grads, neither one ever imagined a career in extermination, even if it environmentally friendly.

COLIN HICKEY: I went to college for a biology degree. And then when I finished my undergraduate, basically, I didn’t really have a plan of what I wanted to do.

PAUL SOLMAN: Todd McNamara was a business major, tried his hand at selling stocks.

TODD MCNAMARA, Green Planet Pest Control: But I just didn’t like the idea of sitting in front of a computer all day watching numbers bounce around, and calling clients and pretending like I liked them.

PAUL SOLMAN: Instead, the would-be biologist and businessman are content turning couches into killing fields and growing their two-man operation. But did they need college for that?

COLIN HICKEY: I couldn’t do what I do now if I didn’t go to college.

TODD MCNAMARA: Controlling the pest is the easy part. But doing the marketing, the business strategy, managing all the accounts, the day-to-day operation…

LAWRENCE KATZ: I actually think it may be that a really strong liberal arts education is going to be more valuable in the future. How well do you deal with unstructured problems and how well do you deal with new situations, that’s what is really key.

PAUL SOLMAN: Kerry Mills got so creative with her career, she created a new profession. After studying business at Arizona State and returning home to New York, she felt a religious calling to work with older people in nursing homes, but was bummed by what she saw.

KERRY MILLS, Engaging Alzheimer’s: There’s no enthusiasm. There’s no encouragement to go live your life. Still be who you are.

PAUL SOLMAN: So Mills enthusiastically transformed herself into what she called a dementia coach, training both staff and private clients on how to care for people like 93-year-old Grace Caffrey who have Alzheimer’s or related disabilities. Caffrey’s devoted niece, Mary Lou Casey, visits nearly every day.

KERRY MILLS: What are some of Grace’s challenges now?

WOMAN: I think the biggest issue is when they have to touch her, whether it’s the shower, the toileting, or anything in there. That’s where the problems are.

KERRY MILLS: Most people react when somebody goes to touch them. It is actually a defense mechanism. So, we also have to look in the situation to say, where can I give her a little bit more space so that she can be more independent?

PAUL SOLMAN: Kerry Mills has dozens of tips that I very much wish I had heard when I cared for my parents, which suggests the job possibilities in an aging and therefore fraying population.

KERRY MILLS: Astronomical. There’s a ton of jobs out there that you just have to go figure it out. You have to kind of craft it in your community.

PAUL SOLMAN: But can the average college grad carve out his and her career?

LAWRENCE KATZ: I think every human being for the most part has that capability.

The key is having a foundational set of skills, some of them interpersonal, some of them analytical, and finding what turns you on.

PAUL SOLMAN: But you hear people more and more now saying to college graduates don’t follow your bliss, don’t do what you love because that’s impractical.

LAWRENCE KATZ: There’s different levels of do what you love. You don’t want to just do something because it looks like today there’s a safe job in it.

You want do something that you wake up every morning and feel passionate about. And that doesn’t guarantee there will be a market for it. But it’s — in many cases, it gives you a good shot.

PAUL SOLMAN: And speaking of good shots, one last example of artisanship.

Yes, it’s just delicious.

Lawyers Zack Silverman and Alex Rein work for the same firm, bonded over their childhood love of frozen slushies.

ZACK SILVERMAN, Kelvin Natural Slush Co.: They’re not as socially acceptable for a law firm, so we sort of joked, why isn’t there a good frozen slushie that we could bring to the office?

PAUL SOLMAN: Rein bought a machine for his home, started developing flavors, citrus, ginger, tea. When he got laid off in 2009, Kelvin Slushie was born, starting with a food truck.

ZACK SILVERMAN: People get coming to the truck and bringing their own booze. And they would spike the slushies.

PAUL SOLMAN: Your eureka was adult slushies, wait a second, that would be alcohol.

ZACK SILVERMAN: Exactly.

PAUL SOLMAN: Silverman has since quit the law firm, joining Rein full-time. Regrets? They have had few.

ALEX REIN, Kelvin Natural Slush Co.: I love what I do. I’m much more passionate about what I’m doing day in and day out.

ZACK SILVERMAN: We hope that we’re building equity in a company that will be worth hopefully more in the future.

PAUL SOLMAN: But will they ever earn lawyer money? And more importantly for this story, will artisanal businesses create enough jobs to rebuild America’s middle class?

We note that, at its peak, the Pfizer plant employed some 2,500 people, its artisan replacements just 1,000 jobs so far. On the other hand, the space is still only 40 percent leased. If it hits its full occupancy, there just might be 2,500 people working here once again.

JUDY WOODRUFF: So, why should young people today want a liberal arts education? You can read more of Paul’s interview with the man who coined the term artisan economy. That’s on Making Sense.