New Geography

Author: Joel Kotkin

  • Paris and the Politics of Climate

    To some, particularly in the green movement, this month’s Paris climate change summit represents something like the great synods of the early Christian era, where truth and policy, for example, on pastoral celibacy, were determined by the princes of the church. Some others, largely marginalized on the fringes of the Right, insist the whole extravaganza is part of a vast left-wing conspiracy to delude people into accepting a world government.

    Lost in translation is that the Paris conference is largely a sideshow camouflaging a potentially epic struggle among national, regional and economic interests. This mundane reality is often lost amid the apocalyptic rhetoric, such as employed by Gov. Jerry Brown, that insists draconian action is necessary to avoid the species’ imminent “extinction.”

    In the real world, everything boils down to the winners and, arguably, the many more losers from the relentless drive to “decarbonize” the economy. Economist Bjorn Lonborg suggests that, by 2100, climate change policies will cost about a $1 trillion each year. Although scientists, bureaucrats, nonprofits and connected corporatists might actually benefit from decarbonizing quickly, it’s hard to see how most people will benefit from such an upheaval.

    Not surprisingly, a growing number of people in key countries have become increasingly less interested in sacrificing their lives for some impending but not-yet-occurring catastrophe. In fact, a recent BBC poll covering some 20 countries found a decreasing interest in the climate agenda in all but three – Russia, Turkey and Spain. In many countries, including the United Kingdom, despite almost incessant media coverage, the public has become more skeptical about paying for far-reaching climate policies.

    Read the entire piece at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo by Flickr user presidenciamx.

  • Fostering a Climate of Intolerance

    The Paris Climate Conference, convening this week, takes place in the very place where, arguably, the most dangerous exemplar of hysteria, the Islamic jihadi movement, has left its bloody mark. Yet the think tank mavens, academics, corporate shills and endless processions of bureaucrats gather in the City of Light not to confront the immediate deadly threat, but to ramp up their own grisly scenarios and Draconian solutions.

    Welcome to the age of hysteria, where friends and foes, and even those who blissfully talk past each other, whip themselves into an emotional frenzy that bears no discussion, debate or nuance. Rather than entering a technological age of reason, we seem to lurching towards a high-tech middle ages, where warring bands – greens, jihadis, libertarians, social conservatives, nationalists – immerse themselves not in intellectual competition but, inflating their own individual outrage. In this environment, exaggeration and hysteria are weapons of recruitment, while opposition is met with demeaning attacks, potential imprisonment and, at the worst, vicious acts of violence.

    Establishment’s hysteria

    Amid the recent carnage in Paris – not to mention bloodshed in the Sinai, Beirut and Mali – one would expect the world’s economic and political leadership to focus on that clear and present danger presented by Islamic extremism. But for years, much of the world’s power structure, particularly on the Left, has convinced itself that climate change represents the greatest challenge to mankind, rather than more immediate threats such as terrorism, poverty, deforestation and stagnating global economies.

    For some, climate change has become the default cause of virtually everything, even the Syrian civil war. However much dry conditions may have contributed to the crisis, this assertion ignores the fact that people have been killing each other in the Middle East from time immemorial and that droughts have been a constant threat in that region, as here in California, since before biblical times.

    Read the entire piece at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo: Entrance to Le Bourget UN climate Conference COP21 by Flickr user Takver

  • Jerry Brown’s Insufferable Green Piety

    At the site of real and immediate tragedy, an old man comes, wielding not a sword to protect civilization from ghastly present threats but to preach the sanctity of California’s green religion. The Paris Climate Change Conference offers a moment of triumph for the 77-year-old Jerry Brown, the apogee of his odd public odyssey.

    Jerry Brown has always been essentially two people—one the calculating, Machiavellian politician, the other the dour former Jesuit who publically dismisses worldly pleasures for austere dogma. Like a modern-day Torquemada, he is warning the masses that if they fail to adhere in all ways of the new faith or face, as he suggested recently humanity’s “extinction.”

    Brown is important because many other green cheerleaders like Al Gore grate on the public, in part because of rampant greed and a penchant for unsupportablepredictions. In contrast, Brown presents, with some justification, the very model of enlightened leadership and smart management, certainly in comparison with the ideologues and public employee pawns who dominate his party, and the blatant wealthy hypocrites who rule the green universe.

    Increasingly, Brown has become the patron saint of climate change, while at the same time exposing the effort’s flaws and contradictions most clearly. Railing against the satanic greenhouse gases, Brown, one supposes unwittingly, seems unconcerned he is waging what amounts to a war against the state’s own middle and working classes. His intolerance of dissent—albeit less extreme than some—reflects the current trajectory of environmentalism, which increasingly seeks to silence and even criminalize those who dispute their analyses and prescriptions.

    Like the Spanish father of the Inquisition, Brown has it in for anyone who dissents from his “God is not mocked,” as he suggested recently, attacking critics of his policies as “falsifying the scientific record,” something climate change advocates have also been caught doing on more than one occasion. Brown dismisses allclimate skeptics, even those who admit some carbon-caused warming,  as “a well funded cult.”

    Like a religious adept, Brown shows his need to link everything to one sin—greenhouse gas emissions—to explain virtually everything from wildfires to the current drought on climate change, although with little support from scientists who study such things. As was common in the worst aspects of the medieval Catholic Church, one increasingly cannot dissent in any way from revealed doctrine without being essentially evil.

    Between Image and Reality

    In Paris, Brown hopes to present himself as the great green success story, leader of an economy that has thrived despite some of the world’s most draconian climate change measures. And he has something of a case since California, after suffering greatly in the recession, has finally recovered its lost jobs and has bolstered its critical role as the dominant technology power on the planet.

    For many progressives, California represents “a beacon of hope.” Its “comeback” has been dutifully noted and applauded by left-wing economist Paul Krugman, and Michael Kinsley and the Washington Post’s Chris Cilizza have even suggested that Brown should run for president—at the ripe age of 77.

    These fans miss a big part of the reality. Outsiders think of California as a prosperous place that mints billionaires, but overall the state’s economic recovery has done little for many, if not most, state residents. Even with the boom in Silicon Valley, roughly one in three Californians live check to check, the state hashigher rate of poverty than Mississippi, as well as one-third of the nation’s welfare recipients. Among the emerging Latino majority, a prime Brown constituency, the state’s cost-adjusted poverty rate is more than 33 percent, compared to just 22.7 percent in Texas, a state often derided as unenlightened and cruel.

    During this “boom,” most California blue-collar workers in farming, fishing, and forestry have experienced actual average wage decreases. Employment in fields such as construction and manufacturing remain well below their 2007 levels. Much of this has to do with environmental regulation, which has raised energy costs almost twice those of nearby competitors and also helped raise housing prices to an unsustainable level.

    Once the beacon of opportunity, California is becoming a graveyard of middle-class aspiration, particularly for the young. In a recent survey of states where “the middle class is dying,” based on earning trajectories for middle-income cohorts, Business Insider ranked California first, with shrinking middle-class earnings and the third-highest proportion of wealth concentrated in the top 20 percent.

    Most hurt, though, are the poor. California is home to a remarkable 77 of the country’s  297 most “economically challenged,” cities based on levels of poverty and employment, according to a recent USC study; altogether these cities have a population of more than 12 million. Some stressed cities exist cheek-to-jowl with the state’s uber-rich—Oakland, Los Angeles, as well as Coachella, near Palm Springs. Most others are in the poorer, more heavily Latino interior, places like Riverside, Stockton, and Vallejo. Journalists who come to California to praise the governor may think it’s still “California Dreamin’” but for all too many, particularly away from the coast (PDF), it’s more like The Grapes of Wrath.

    The Making of a Modern Medievalist

    Of course, there’s a long history of such bifurcated society, where people tend to stay in their class and the poor depend largely on handouts from their spiritual “betters.” It’s called feudalism.

    In many ways, Jerry Brown is a perfect medievalist—the son of a self-made man, a person who largely inherited his position. Without the legacy of his father, Edmund G. “Pat” Brown, a natural politician and arguably the greatest governor in the state’s history, it’s unlikely the shy, awkward, although unquestionably bright kid would have been elected the first time in his mid-thirties.

    Brown came to politics bathed not in the practicum of politics but in theology. As a seminarian, he imbibed the Jesuitical approach—highly intellectualized, hierarchical, and accepting of class distinctions. Although he occasionally dabbled in populist politics, particularly in his presidential runs, Brown’s achievement has been to undermine not just the Reaganite regime but also the pro-growth progressive structure left behind by his father and earlier California governors.

    Brown’s acuity has often been on target, as, for example, when he took on the encrusted bureaucracy at the University of California and inside state government. But Brown’s maverick approach also revealed a streak that reflected a harshness toward those who were weaker, including the poor. In his first term, Brown’s callous treatment of the mentally ill left 30,000 mental patients in worsening conditions in inadequate nursing facilities. As the Los Angeles director of mental health told me at the time, under Reagan there was “genuine concern for people,” while under Brown he didn’t “see much concern for people at all.”

    He came into office, recalled top aide Tom Quinn, “questioning the values of the Democratic Party” and rejecting the “build, build, build thing” of his father. Like the 15th century Florentine Catholic monk Girolamo Savonarola, he came to Sacramento, in part, to rid it of suberbia and luxuria. Most important, he did not restart the infrastructure building, most portentously for water storage, that marked his father’s regime; the severity of the drought and the awful condition of the state’s roads are, to some extent, his legacy.

    Brown’s initial politics were built around three principles—“serve the people, save the earth, and explore the universe.” Some, such as farmworkers, owe him much. But the biggest winners under Brown were the well-financed green lobby and public employee unions have become so powerful that that replaced the coalition of developers, farmers, and industrialists who had accepted, and often bankrolled, his father.

    In recent years, Brown, after being praised for his moderation in his first four years as second time governor, has become more “crotchety,” according to the Los Angeles Times’ George Skelton. He has insisted on funding his favorite project, the much maligned “bullet train,” even though many on the left, including Mother Jones, have identified it not as an environmental benefit but a colossal waste of time and money.

    In contrast, on most everything else, Brown leans toward austerity—he even reveals a fondness for the ration cards used during World War II. Yet surprisingly, Brown, the supposed ascetic, appears increasingly comfortable with his own wealth. He has speculated freely in Bay Area real estate and stocks, essentially creating a multimillion-dollar estate that, as the San Jose Mercury put it kindly, “belie [the] monastic image.” Recently he shocked his own green supporters by having a state agency perform a detailed analysis of the oil, gas, and mineralresources on his family’s 2,700-acre Northern California ranch, a service not readily available to other mere mortals.

    As for the poor left behind in California’s recovery, this, Brown insists, is not due to policy failure but because the state is an irresistible “magnet” for the masses.

    The High Priest of the Oligarchy

    Early on Brown cleverly cultivated the emerging tech oligarchy in Silicon Valley. This has created a new class of major donors who, along with the unions and Hollywood, have financed his political re-ascendency.

    The oligarchs seem kindred souls for Brown, with little patience for less advanced beings. He also knew that their success has allowed him to show economic gains without having to concede to the regulatory concerns of more traditional industries. In the new Silicon Valley, most of the “dirty work” is shoved off to other more benighted states, or abroad; regulatory overreach poses only limited problems. For his part, Brown sees the oligarchs as the state’s economic foundation. “We’ve got a few problems, we have lots of little burdens and regulations and taxes,” he said recently, “but smart people figure out how to make it.”

    Brown’s Bay Area connection is helped by the fact that the venture and tech firm oligarchy often share his climate concerns. He has further tightened this alliance by lavishing enormous subsidies for often dodgy, expensive renewable energy schemes backed by companies such as Google and by many among the venture capitalist elite.

    Ironically, none of Brown’s moves will, by themselves, have any demonstrable impact on climate. California is too small, too temperate, and, at this stage, too de-industrialized to make a difference. Indeed, as one recent study found, California could literally disappear tomorrow with virtually no effect on the climate. Perhaps less recognized, its efforts to reduce emissions have accounted for naught, since so much industry and so many people—some 2 million in the last decade—have taken their carbon footprint elsewhere, usually to places where climate and less stringent regulation allow for greater emissions. Some states, rather than embrace Brown’s formula and seeing an opportunity to score, have detached themselves from renewable mandates entirely.

    And now the world

    So why the dogged insistence on draconian policies? It’s very much for the same reason people take priestly vows, or why penitents whip themselves: moral posturing before the rest of the world and, for politicians, the prospect of attracting the adoring masses (or at least the media). President Obama looks to California policies for his future climate policies. On this issue Brown is the rock star, and will be in Paris, cool again after all these years.

    Brown’s green religion now has a most powerful ally, the leading Jesuit on the planet, Pope Francis. This alliance offers something of a religious redemption for Brown, a former seminarian who has rejected most traditional Catholic teachings on such things as gay marriage, abortion, population control, and, most recently,euthanasia.

    In Paris, Brown’s claims of economic infallibility should be questioned particularly among leaders of developing countries. Some 3 billion people suffer from pollution created by burning wood, coal, or dung. Some 4.3 million die annually from the resultant indoor pollution compared to 250,000 deaths that might be assigned to climate change by 2050. For many, fossil fuels represent a lifesaver today. To offer these people expensive and inefficient solar panels instead of basic necessities, as economist Bjorn Lonborg has suggested, represents nothing more than “inexcusable self-indulgence.”

    Some developing countries are making their intentions clear. Indian Prime Minister Narendra Modi has thrown out Greenpeace for agitating against coal mines in his energy-starved country. China, whose world-leading emissions are now almost twice those of the U.S., recently admitted to burning 17 percent more coal than previously estimated. No doubt they will happily wink and nod their assent to a vague green agreement while Western countries, following Brown, Obama, and the Pope, adopt ever stricter regulations. By the time we get to 2030, when China might begin reducing emissions, the West itself may be so weakenedeconomically that it won’t be able to question anything Beijing wants to do anyway.

    Russia and virtually the entire Middle East also are not likely to give up on fossil fuels, which is the only thing that makes the world pay attention to them. Rather than use our energy boom to create leverage against these autocracies, Brown and his confederates are pushing policies that consequently make them more influential, also allowing them to finance and arm terrorists, whether ISIS, al Qaeda, or theocratic Iran and their satraps.

    A decade from now, the futility and wasted economic potential of this posturing will be clear. What could have been accomplished, at least initially, by replacing coal with natural gas and the careful expansion of nuclear power, will instead lead to a lower quality of life for all but the rich in the West, with perhaps worse ill-effects elsewhere. But by then Brown will likely have faded from the scene, although he may manage to get his wife, former Gap attorney Ann Gust Brown, elected to succeed him.

    What will be Brown’s main legacy? A more environmentally pure but severely bifurcated California and, if he and his compatriots have their way, an accelerating decline of the Western world and arguably the stagnation of the entire world economy. But Brown and his crony capitalist and priestly friends will be happy. They may have messed up the world, but they will always have Paris.

    This piece first appeared at The Daily Beast.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Facebook photo by BigStockPhoto.com.

    Photo: Troy Holden

  • Tech Titans Want to be Masters of All Media We Survey

    The rising tech oligarchy, having disrupted everything from hotels and taxis to banking, music and travel, is also taking over the content side of the media business. In the process, we might see the future decline of traditional media, including both news and entertainment, and a huge shift in media power away from both Hollywood and New York and toward the Bay Area and Seattle.

    This shift is driven by several forces: the power of Internet-based communications, the massive amounts of money that have accumulated among the oligarchs and, perhaps most important, their growing interest in steering American politics in their preferred direction. In some cases, this is being accomplished by direct acquisition of existing media platforms, alliances with traditional firms and the subsidization of favored news outlets. But the real power of the emerging tech oligarchy lies in its control of the Internet itself, which is rapidly gaining preeminence in the flow of information.

    This transition is being driven by the enormous concentration of wealth in a few hands, based mostly in metropolitan Seattle and Silicon Valley. In 2014, the media-tech sector accounted for five of the 10 wealthiest Americans. More important still, virtually all self-made billionaires under age 40 are techies. They are in a unique position to dominate discourse in America for decades to come.

    In recent years, like Skynet in the “Terminator” series, the oligarchs have become increasingly aware of their latent power to shape both the news media and the political future. A prospectus for a lobbying group headed up by Mark Zuckerberg’s former Harvard roommate, suggests tech will become “one of the most powerful political forces.” The new group’s “tactical assets” include not only popularity and great wealth but the fact that “we control massive distribution channels, both as companies and individuals.”

    Read the entire piece at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Facebook photo by BigStockPhoto.com.

  • The Cities Where Your Salary Will Stretch The Furthest 2015

    Average pay varies widely among U.S. cities, but those chasing work opportunities would do well to keep an eye on costs as well. Salaries may be higher on the East and West coasts, but for the most part, equally high prices there mean that the fatter paychecks aren’t necessarily getting the locals ahead.

    To determine which cities actually offer the highest real incomes, Mark Schill, research director at Praxis Strategy Group, conducted an analysis for Forbes of the 53 largest metropolitan statistical areas, adjusting annual earnings by a cost factor that combines median home values from the U.S. Census (20%) with a measure of regional price differences from the U.S. Bureau of Economic Analysis (80%).

    The takeaway: When cost of living is factored in, most of the metro areas that offer the highest effective pay turn out to be in the less glitzy middle part of the country. 

    Ranking first is the Houston-the Woodlands-Sugar Land metro area, followed by one high-cost outlier: San Jose-Sunnyvale-Santa Clara, Calif., aka Silicon Valley. Although average wages in the San Jose area are $38,000 higher than Houston’s $60,096, the much lower cost of living in Houston means residents there are effectively slightly better off. Adjusted for costs, Houston’s average real income is $62,136. A big contributing factor is Houston’s low home prices: the ratio of the median home price there ($215,000 in the third quarter) to median annual household income is 3.1, compared to 7.5 in the San Jose area (median 3Q home price: $795,000).

    San Jose’s high ranking is somewhat of an anomaly: the very high salaries paid by the tech industry in a metro area made up of largely affluent suburban communities go a long way to make up for the high prices. San Jose’s prices were the third highest among major U.S. metro areas in 2013, the most recent year for which the BEA has data — 21.3% above the national average — while the average annual wage of $98,247 as of this year ranks first.

    Another example of a higher-cost success story is the Hartford, Conn., metro area, which ranks fourth on our list with adjusted annual real earnings of $54,590. One of the lowest-density regions in the country, it boasts many small, prosperous communities with high housing prices surrounding a largely impoverished but small core city (population: 125,000 ). In 2011, the Harford metro area was ranked by Brookings as the most productive metropolitan region in the world.

    But for the most part, it’s the low-cost heartland that dominates the top 15 of our ranking of Cities Where Your Salary Stretches The Furthest. Manufacturing powerhouse Detroit-Warren-Dearborn ranks third with cost-adjusted annual earnings of $55,950. The metro area is comfortably affordable, including an average home price value of $136,400, but also boasts strong wages given the area’s high concentration of factory and engineering jobs, which tend to pay better than other industries, particularly for blue-collar workers.

    Low costs are an advantage that unites a number of the top-ranked heartland metro areas, including Cleveland-Elyria (seventh), where prices of goods and services are 10.5% below the national average, and Cincinnati (ninth), where prices are 9.5% below the national average. In all these areas, the cost of a house is about 20% of what passes for normal in Silicon Valley.

    Hip, But Increasingly Not Worth It

    Perhaps the biggest surprise in our survey is the low rankings of the “cool” cities that are widely discussed as the places that offer the best economic opportunities.

    Take for instance San Francisco, a city that has become the epicenter of “disruptive” tech companies Uber, Lyft, Airbnb, Salesforce.com that are changing our service economy, as well as Twitter. With an average annual salary of $74,794, you would think people would be fat and happy in Baghdad by the Bay. But soaring home prices — median value, $657,300 — have raised costs so high that the area ranks a poor 41st on our list.

    The tech boom has also raised prices in Austin, which ranked fifth when we last did this ranking in 2012, but falls to 19th this year. Over the past year, the average home value in the Texas capital has risen by $24,000, twice the increase experienced in the rest of the country. Median prices now average $217,9000, well above the national median of $188,000 for all large metropolitan regions. This is still not ridiculous, but costs do seems to be eroding some of Austin’s still powerful advantage.

    Similarly, greater New York City also fared poorly, ranking 33rd, in large part due to high housing prices and the overall cost of living: prices there are 22.3% above the national average, according to BEA data, making it the second-costliest metro area in the nation.

    Some of the biggest gaps between cost of living and salary are in Southern California, which has experienced significant house price gains without the income growth that makes San Jose more competitive. Already high, prices in San Diego-Carlsbad (51st), Los Angeles-Long Beach-Anaheim (52nd) and Riverside-San Bernardino (last among the 53 largest metro areas) have all risen considerably above the national average.

    Long-Term Implications

    Our paycheck analysis does not impact everyone equally. Given the central role of housing, for example, long-term residents who bought their homes before prices began to rise dramatically can keep a bigger portion of their take-home pay, and if they decide to sell, they’ll benefit greatly from inflated values. More directly impacted may be young adults and immigrants, most of whom do not own their own homes, and often lack the resources to buy in the more expensive markets.

    Over time this could influence where young families and singles chose to migrate. Since 2010, according to an upcoming study by Cleveland State’s Center for Population Dynamics, there has been a marked shift of college educated workers aged 25 to 34. While between 2008 and 2010, metro areas like San Francisco, New York, Los Angeles, San Jose and Chicago enjoyed the biggest upticks in this coveted population, over the most recently studied period, 2010-13, the leaders were generally less expensive places like Nashville, Pittsburgh, Orlando, Cleveland, San Antonio, Houston and Dallas-Ft. Worth.

    This suggests that areas that have both high-wage jobs and low costs are likely to gain momentum in coming years, particularly if the economy expands. This is not to say that people do not like the excitement and culture associated with San Francisco, Los Angeles or New York, but many may be finding that the price of admission to these fabled places may be too high.

    This could be a great opportunity for less-heralded communities, from Arizona and Texas to Ohio, to gain more educated workers and the companies that require them.

    Metropolitan Average Annual Earnings Adjusted for Cost of Living and Home Values
    Rank MSA Name Adjusted Ave Annual Earnings
    1 Houston-The Woodlands-Sugar Land, TX $62,136
    2 San Jose-Sunnyvale-Santa Clara, CA $56,147
    3 Detroit-Warren-Dearborn, MI $55,950
    4 Hartford-West Hartford-East Hartford, CT $54,590
    5 Dallas-Fort Worth-Arlington, TX $54,497
    6 Atlanta-Sandy Springs-Roswell, GA $53,922
    7 Cleveland-Elyria, OH $53,841
    8 Pittsburgh, PA $53,726
    9 Cincinnati, OH-KY-IN $53,405
    10 St. Louis, MO-IL $53,115
    11 Charlotte-Concord-Gastonia, NC-SC $52,508
    12 Birmingham-Hoover, AL $51,710
    13 Kansas City, MO-KS $51,460
    14 Memphis, TN-MS-AR $51,339
    15 Boston-Cambridge-Newton, MA-NH $50,373
    16 Columbus, OH $50,369
    17 Chicago-Naperville-Elgin, IL-IN-WI $50,351
    18 Nashville-Davidson–Murfreesboro–Franklin, TN $50,168
    19 Austin-Round Rock, TX $50,154
    20 Minneapolis-St. Paul-Bloomington, MN-WI $50,117
    21 Indianapolis-Carmel-Anderson, IN $49,790
    22 Oklahoma City, OK $49,771
    23 Seattle-Tacoma-Bellevue, WA $49,514
    24 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD $48,976
    25 Louisville/Jefferson County, KY-IN $48,807
    26 Milwaukee-Waukesha-West Allis, WI $48,341
    27 Denver-Aurora-Lakewood, CO $48,287
    28 Washington-Arlington-Alexandria, DC-VA-MD-WV $48,102
    29 Buffalo-Cheektowaga-Niagara Falls, NY $48,071
    30 New Orleans-Metairie, LA $47,956
    31 San Antonio-New Braunfels, TX $47,837
    32 Rochester, NY $47,660
    33 New York-Newark-Jersey City, NY-NJ-PA $47,649
    34 Jacksonville, FL $47,230
    35 Raleigh, NC $47,164
    36 Richmond, VA $47,002
    37 Grand Rapids-Wyoming, MI $46,480
    38 Phoenix-Mesa-Scottsdale, AZ $46,281
    39 Tampa-St. Petersburg-Clearwater, FL $45,826
    40 Baltimore-Columbia-Towson, MD $45,184
    41 San Francisco-Oakland-Hayward, CA $45,082
    42 Portland-Vancouver-Hillsboro, OR-WA $44,451
    43 Salt Lake City, UT $43,857
    44 Sacramento–Roseville–Arden-Arcade, CA $43,254
    45 Miami-Fort Lauderdale-West Palm Beach, FL $42,976
    46 Las Vegas-Henderson-Paradise, NV $42,960
    47 Providence-Warwick, RI-MA $42,827
    48 Orlando-Kissimmee-Sanford, FL $42,463
    49 Tucson, AZ $42,264
    50 Virginia Beach-Norfolk-Newport News, VA-NC $42,226
    51 San Diego-Carlsbad, CA $37,395
    52 Los Angeles-Long Beach-Anaheim, CA $35,691
    53 Riverside-San Bernardino-Ontario, CA $34,040
    Figure is the average annual wages, salaries and proprietor earnings adjusted for cost of living usine BEA Regional Price Parities (80%) and variation in Census median home value among the 53 regions (20%). Data Sources: EMSI 2015.2 Employment Data, U.S. Bureau of Economic Analysis Regional Price Parities, U.S. Census American Community Survey
    Analysis by Mark Schill, mark@praxissg.com

     

    This piece first appeared at Forbes.com.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo by w:Flickr user Bill Jacobus [CC-BY-2.0], via Wikimedia Commons

  • Too Many Places Will Have too Few People

    The adage “demographics are destiny” is increasingly being replaced by a notion that population trends should actually shape policy. As the power of projection grows, governments around the world find themselves looking to find ways to counteract elaborate and potentially threatening population models before they become reality.

    Nowhere is this clearer than in China’s recent announcement that it was suspending its “one child” policy. The country’s leaders are clearly concerned about what demographer Nicholas Eberstadt has labeled “this coming tsunami of senior citizens” with a smaller workforce, greater pension obligations and generally slower economic growth.

    A second example is Europe’s open migration policy. Despite widespread opposition by its own citizens, and cost estimates that run to a trillion euros over 30 years, Europe’s political and business leaders regard migration as critical to address the Continent’s aging demographics. Germany knows it may not be able to keep its economic engine running without a huge influx of workers.

    In defense of the migration policy, European Union economists project that refugees from the Middle East, Africa and Central Asia could boost Europe’s GDP by 0.2 percent to 0.3 percent by 2020.

    This all speaks to a kind of demographic arbitrage between countries with aging demographics and those with youth to spare. Half the world’s population already lives in countries with fertility rates below replacement level (2.1 per woman).

    Read the entire piece at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo “Nursery Cart” by flickr user Pieterjan Vandaele

  • Are We Heading for An Economic Civil War?

    When we speak about the ever-expanding chasm that defines modern American politics, we usually focus on cultural issues such as gay marriage, race, or religion. But as often has been the case throughout our history, the biggest source of division may be largely economic.

    Today we see a growing conflict between the economy that produces consumable, tangible goods and another economy, now ascendant, that deals largely in the intangible world of media, software, and entertainment. Like the old divide between the agrarian South and the industrial North before the Civil War, this threatens to become what President Lincoln’s Secretary of State, William Seward, defined as an “irrepressible conflict.”

    Other major economic divides—between capital and labor, Wall Street versus Main Street—defined politics for much of the 20th century. But today’s tangible-intangible divide is particularly tragic because it undermines America’s peculiar advantage in being a powerhouse in both the material and non-material worlds. No other large country can say that, certainly not China, Japan, or Germany, industrial powerhouses short on resources, while our closest cousins, such as Canada, Australia, and New Zealand, remain, for the most part, dependent on commodity trade.

    The China syndrome and the shape of the next slowdown

    Over the past decade, the United States has enjoyed two parallel booms that combined to propel the economy out of recession. One was centered in places like Houston, Dallas-Ft. Worth, Oklahoma City, and across much of the Great Plains. These areas were all located in the first states to emerge from the recession, and benefited massively from a gusher in energy jobs due largely to fracking.

    At the same time, another part of the economy, centered in Silicon Valley as well as Seattle, Austin, and Raleigh/Durham, has also been booming. Though far more restricted than their counterparts in the “tangible” economy in terms of both geography and jobs, the tech/digital economy did not lag when it came to minting fortunes. By 2014, the media-tech sector accounted for six of the nation’swealthiest people. Perhaps more important, 12 of the nation’s 17 billionaires under 40 also hail from the tech sector.

    Until China’s economy hit a wall this fall, these two sectors were humming along, maybe not enough to restore the economy to its ’90s trim robustly enough to improve conditions in many parts of the country. But as China begins to cut back on commodity purchases, many key raw material prices—copper and iron to oil and gas as well as food stuffs—have fallen precipitously, devastating many developing economies in South America, Africa, the Middle East, and Southeast Asia.

    Plunging prices are also beginning to hurt many local economies in the U.S., particularly in the “oil patch” that spreads from west Texas to North Dakota. This is one reason why overall economic growth has fallen, and is unlikely to revive strongly in the months ahead. Overall, according to the most recent numbers, job growth remains slow and long-term unemployment stubbornly high while labor participation is stuck at historically low levels. Much of this loss is felt by the kind of middle and working class people who tend to work in tangible industries.

    But it’s not just the much maligned energy economy that is in danger. The recovery of manufacturing was one of the most heartening “feel good” stories of the recession. Every Great Lakes state except Illinois now enjoys an unemployment rate below the national average, and several, led by the Dakotas, Minnesota, Nebraska, and Iowa, boast unemployment that is among the lowest in the nation. Now a combination of a too-strong dollar, declining demand for heavy equipment, and falling food prices threaten economies throughout the Great Lakes and the Great Plains.

    Waging war on the tangible economy

    President Obama’s emphasis on battling climate change—aimed largely at the energy and manufacturing sectors—in his last year in office will only exacerbate these conflicts. For one thing, the administration’s directive to all but ban coal could prove problematic for many Midwest states, including several—Iowa, Kansas, Ohio, Illinois, Minnesota, and Indiana—that rely the most on coal for electricity. Not surprisingly, much of the opposition to the Environmental Protection Agency’s decrees come from heartland states such as Oklahoma, Indiana, and Michigan. The President’s belated rejection of the Keystone Pipeline is also intensely unpopular, including among traditionally Democratic-leaning construction unions.

    These policies have also succeeded to pushing the energy industry, in particular, to the right. In 1990 energy firms contributed almost as much to Democrats as to Republicans; last year they gave more than three times as much to the GOP.

    In contrast, the tech oligarchs and their media allies largely embrace the campaign against fossil fuels. Environmental icon Bill McKibben, for example, has won strong backing in Silicon Valley for his drive to marginalize oil much like the tobacco industry was ostracized earlier. Meanwhile the onetime pragmatic interest in natural gas as a cleaner replacement for coal is fading, as the green lobby demands not just the reduction of fossil fuel but its rapid extermination.

    Embracing the green agenda costs Silicon Valley little. High electricity prices may take away blue collar jobs, but they don’t bother the affluent, well-educated, Telsa-driving denizens of the Bay Area, who also pay less for power. But those rates are devastating to the less glamorous people who live in California interior. As one recent study found, the average summer electrical bill in rich, liberal andtemperate Marin County was $250 a month, while in impoverished , hotter Madera, the average bill was twice as high.

    Many Silicon Valley and Wall Street supporters also see business opportunities in the assault on fossil fuels. Cash-rich firms like Google and Apple, along with many high-tech financiers and venture capitalist, have invested in subsidized green energy firms. Some of these tech oligarchs, like Elon Musk, exist largely as creatures of subsidies. Neither SolarCity nor Tesla would be so attractive—might not even exist—without generous handouts.

    In this way California already shows us something of what an economy dominated by the intangible sectors might look like. Driven by the “brains” of the tech culture, the ingenuity of the “creative class,” and, most of all, by piles of cash from Wall Street, hedge funds, and venture capitalists, the tech oligarchs have shaped a new kind of post-industrial political economy.

    It is really now a state of two realities, one the glamorous software and media-based economy concentrated in certain coastal areas, surrounded by a rotting, and increasingly impoverished, interior. Far from the glamour zones of San Francisco, the detritus of the fading tangible economy is shockingly evident. Overall nearly a quarter of Californians live in poverty, the highest percentage of any state. According to a recent United Way study, almost one in three Californians is barely able to pay his or her bills.

    Silicon Valley’s political agenda

    For the time being, with the rest of the economy limping along, the tech oligarchs seem, if anything, ever more arrogant and sure that they will define the future of the country’s politics. At a time when most small business owners hold Obama in low regard, the Democratic Party can consider the tech sector as an intrinsic part of its core political coalition. In 2000 the communications and electronics sectorwas basically even in its donations; by 2012 it was better than two to one democratic.

    Once largely apolitical or non-partisan in their approach, firms like Microsoft, Apple and Google now overwhelmingly lean to the Democrats. President Obama has even enlisted several tech giants—including venture capitalist John Doerr, Linked In billionaire Reid Hoffman, and Sun cofounder Vinod Khosla—to help plan his no doubt lavish and highly political retirement.

    The love-fest between Obama and Silicon Valley grows from a common belief in being extraordinary. The same media that has marveled at Obama’s celebrated brilliance also hails Silicon Valley’s ascendency as a triumph of brains over brawn.

    Yet in reality many traditional industries such as energy and manufacturing still depend on skilled engineers. Indeed, after Silicon Valley, the biggest concentration of engineers per capita (PDF) can be found in brawny metros like Houston and Detroit. New York and Los Angeles, which like to parade as tech hotbeds, rank far behind.

    In contrast to engineers laboring in Houston or Detroit, those who work in Silicon Valley focus largely on the intangible economy based on media and software. The denizens of the various social media, and big data firms have little appreciation of the difficulties faced by those who build their products, create their energy, and grow their food. Unlike the factory or port economies of the past, those with jobs in the new “creative” economy also have little meaningful interaction with working class labor, even as they finance politicians who claim to speak for those blue collar voters.

    This may explain the extraordinary gap between the economies—and the expectations—of coastal and interior California. The higher energy prices and often draconian regulations that prevented California from participating in the industrial renaissance are hardly issues to companies that keep their servers in cheap energy areas of the Southwest or Pacific Northwest and (think Apple) manufacture most if not all of their products in Asia.

    In the process the Democrats, once closely allied with industry, are morphing into a post-industrial party. Manufacturing in strongholds like Los Angeles, long the industrial center of the country, continues to erode. In a slide that started with the end of the Cold War, Southern California’s once-diverse industrial base has eroded rapidly, from 900,000 jobs just a decade ago to 364,000 today. New York City, which in 1950 boasted 1 million manufacturing jobs, now has fewer than 100,000. Overall, manufacturing accounts for barely 5 percent of state domestic product in New York and 8 percent in California, compared to 30 percent in Indiana and 19 percent in Michigan.

    This divide could become decisive in the election. In contrast to advances in energy, autos, and homebuilding, which produced good blue collar and middle-skilled jobs, the benefits of the current tech boom have been limited, both in terms of job creation (outside of the Bay Area) and increased productivity, for the vast majority of voters.

    This underlying economic conflict is redefining our politics less along lines of ideology and more in terms of interests. Increasingly states that follow the Obama line on energy, such as New York and California, are not contestable for Republicans. But elsewhere—beyond the coasts—there may be greater resistance.

    Among those who are likely to revolt are those workers and entrepreneurs in the oil patch, those who build heavy machinery, and those who grow large quantities of food. The recent Republican win in Kentucky was in part based on opposition to anti-coal regulations coming from the Obama administration. As the EPA ramps up its regulatory onslaught, one can expect energy-dependent industries and regions to recoil, particularly at a time when their industries are headed into a recession. Republicans claims that regulatory policies hurt the tangible economies will gain traction if car factories and steel mills start shutting down again, while farmers plant fewer soybeans and developers build fewer suburban homes.

    The emergence of an economic civil war?

    Hillary Clinton may praise the economic progress under President Obama, and win the nods of those in the tech, media, and financial community who have done very well on his watch. There’s enough momentum from these industries to guarantee that the entire West Coast and the Northeast will fold comfortably, and predictably, into the Clinton column, despite rising concern about crime, homelessness, and loss of middle class jobs. But the very same policies that attract the tech world voter to Clinton will just as certainly alienate many working class and middle class Democrats in places like Appalachia, the Gulf Coast, and particularly the politically pivotal Great Lakes.

    The stakes could be huge. If the Republicans can convince most voters in the middle of the country that the coastal-driven policy agenda is a direct threat to their interests, the GOP will likely carry the day. But if the Democrats can convince the country that coastal California and New York City represent the best future for us all, then get ready for Hillary, because nothing else—certainly not the old social issues—will stop her.

    This piece first appeared at The Daily Beast.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

  • So Much For The Death Of Sprawl: America’s Exurbs Are Booming

    It’s time to put an end to the urban legend of the impending death of America’s suburbs. With the aging of the millennial generation, and growing interest from minorities and immigrants, these communities are getting a fresh infusion of residents looking for child-friendly, affordable, lower-density living.

    We first noticed a takeoff in suburban growth in 2013, following a stall-out in the Great Recession. This year research from Brookings confirms that peripheral communities — the newly minted suburbs of the 1990s and early 2000s — are growing more rapidly than denser, inner ring areas.

    Peripheral, recent suburbs accounted for roughly 43% of all U.S. residences in 2010. Between July 2013 and July 2014, core urban communities lost a net 363,000 people overall, Brookings demographer Bill Frey reports, as migration increased to suburban and exurban counties. The biggest growth was in exurban areas, or the “suburbiest” places on the periphery.

    How could this be? If you read most major newspapers, or listened to NPR or PBS, you would think that the bulk of American job and housing growth was occurring closer to the inner core. Yet more than 80% of employment growth from 2007 to 2013 was in the newer suburbs and exurbs. Between 2012 and 2015, as the economy improved, occupied suburban office space rose from 75% of the market to 76.7%, according to the real estate consultancy Costar.

    These same trends can be seen in older cities as well as the Sun Belt. Cities such as Indianapolis and Kansas City have seen stronger growth in the suburbs than in the core.

    This pattern can even be seen in California, where suburban growth is discouraged by state planning policy but seems to be proceeding nevertheless. After getting shellacked in the recession, since 2012 the Inland Empire — long described as a basket case by urbanist pundits — has logged more rapid population growth  than either Los Angeles and even generally healthy Orange County. Last year the metro area ranked third in California for job growth, behind suburban Silicon Valley and San Francisco.

    To those who have been confidently promoting a massive “return to the city,” the resurgence of outer suburbs must be a bitter pill. In 2011, new urbanist pundit Chris Leinberger suggested outer ring suburbs were destined to become “wastelands” or, as another cheerily described them, “slumburbs” inhabited by the poor and struggling minorities chased out of the gentrifying city.

    In this worldview, “peak oil” was among the things destined to drive people out of the exurbs . So convinced of the exurbs decline that some new urbanists were already fantasizing that suburban three-car garages would be “subdivided into rental units with street front cafés, shops, and other local businesses,” while abandoned pools would become skateboard parks.

    This perspective naturally appeals to people who write most of our urban coverage from such high-density hot spots as Brooklyn, Manhattan, Washington, D.C., or San Francisco. And to be sure, all these places continue to attract bright people and money from around the world. Yet for the vast majority, particularly families, such places are too expensive, congested and often lack decent public schools. For those who can’t afford super-expensive houses and the cost of private education, the suburbs, particularly the exurbs, remain a better alternative.

    Even as Houston, like other Sun Belt cities, has enjoyed something of a renaissance in its inner core, nearly 80% of the metro area’s new homebuyers last year purchased residences outside Beltway 8, which is far to west of the core city.

    If you want to know why people move to such places, you can always ask them. On reporting trips to places like Irvine, California, Valencia, north of Los Angeles, or Katy, out on the flat Texas prairie 31 miles west of Houston, you get familiar answers: low crime, good schools and excellent access to jobs. Take Katy’s Cinco Ranch. Since 1990, the planned community has grown to 18,000 residents amid a fourfold expansion in the population of the Katy area to 305,000.

    To some, places like Cinco Ranch represents everything that is bad about suburban sprawl, with leapfrogging development that swallows rural lands and leaves inner city communities behind. Yet to many residents, these exurban communities represent something else: an opportunity to enjoy the American dream, with good schools, nice parks and a thriving town center.

    Nor is this a story of white flight. Roughly 40% of the area’s residents are non-Hispanic white; one in five is foreign born, well above the Texas average. Barely half of the students at the local high school are Caucasian and Asian students have been the fastest-growing group in recent years, with their parents attracted to the high-performing schools.

    “We have lived in other places since we came to America 10 years ago,” says Pria Kothari, who moved to Cinco with her husband and two children in 2013. “We lived in apartments elsewhere in big cities, but here we found a place where we could put our roots down. It has a community feel. You walk around and see all the families. There’s room for bikes –that’s great for the kids.”

    Here Come The Millennials

    Potentially, the greatest source of exurban and peripheral revival lies with the maturation of the millennial generation. Millennials — born between 1982 and 2002 — are widely portrayed as dedicated city dwellers. That a cohort of young educated, affluent people should gravitate to urban living is nothing new. The roughly 20% who, according to an analysis by demographer Wendell Cox, live in urban cores may be brighter, and certainly more loquacious, than their smaller town counterparts, dominating media coverage of millennials. But the vast majority of millennials live elsewhere — and roughly 90% of communities’ population growth that can be attributed to millennials since 2000 has taken place outside of the urban core.

    To be sure, millennials are moving to the suburbs from the city at a lower rate than past generations , but this is more a reflection of slower maturation and wealth accumulation.

    According to U.S. Census Bureau data released last month, 529,000 Americans ages 25 to 29 moved from cities out to the suburbs in 2014 while 426,000 moved in the other direction. Among younger millennials, those in their early 20s, the trend was even starker: 721,000 moved out of the city, compared with 554,000 who moved in.

    This may well reflect rising cost pressures, as well as lower priced housing many millennials can afford. Three-quarters, according to one recent survey, want a single-family house, which is affordable most often in the further out periphery.

    Future trends are likely to be shaped by an overlooked fact: as people age, they change their priorities. As the economist Jed Kolko has pointed out, the proclivity for urban living peaks in the mid to late 20s and drops notably later. Over 25% of people in their mid-20s, he found, live in urban neighborhoods; but by the time they move into their mid-30s, it drops to 18% or lower. In 2018, according to Census estimates, the number of millennials entering their 30s will be larger than those in their 20s, and the trend will only get stronger as the generation ages.

    Some might argue that millennials will be attracted to more urban suburbs, places like Bethesda, Md.; Montclair, N.J.; or the West University or Bellaire areas of Houston, all of them located near major employment centers with many amenities. These suburban areas are also among the most expensive areas in the country, with home prices often in the millions. And a number of older inner ring suburbs, as we saw in the case of Ferguson, are troubled and have lost population — even as the number of residents in downtown areas have grown.

    So when millennials move they seem likely to not move to the nice old suburbs, or the deteriorating one, but those more far-flung suburban communities that offer larger and more affordable housing, good schools, parks and lower crime rates.

    Among the research that confirms this is a study released this year by the Urban Land Institute, historically hostile to suburbs, which found that some 80% of current millennial homeowners live in single-family houses and 70% of the entire generation expects to be living in one by 2020.

    The Future Of Exurbia

    Far from being doomed, exurbia is turning into something very different from the homogeneous and boring places portrayed in media accounts. For one thing exurbs are becoming increasingly ethnically diverse. In the decade that ended in 2010 the percentage of suburbanites living in “traditional” largely white suburbs fell from 51% to 39%.  According to a 2014 University of Minnesota report, in the 50 largest U.S. metropolitan areas, 44% of residents live in racially and ethnically diverse suburbs, defined as between 20% and 60% non-white.

    And how about the seniors, a group that pundits consistently claim to be heading back to the city? In reality, according to an analysis of Census data, as seniors age they’re increasingly unlikely to move, but if they do, they tend to move out of urban cores as they reach their 60s, and to less congested, often more affordable areas out in the periphery. Seniors are seven times more likely to buy a suburban house than move to a more urban location. A National Association of Realtors survey found that the vast majority of buyers over 65 looked in suburban areas, followed by rural locales.

    Trends among millennials, seniors and minorities suggest that demographics are in the exurbs’ favor. The movement to these areas might be accelerated by their growing sophistication, as they build amenities long associated with older cities, such as town centers, good ethnic restaurants and shops, diverse religious institutions and cultural centers. At the same time, the growth of home-based business — already larger than transit ridership in two-thirds of American metropolitan areas and growing much faster — increases the need for larger homes of the sort found most often in the outer rings.

    Rather than regard these communities as outrages to the urban form, planners and developers need to appreciate that peripheral developments remain a necessary part of our evolving metropolitan areas. With a new generation looking for affordable homes, good schools and low crime, it seems logical that many will eventually leave core cities that offer none of the above. The future of exurbia is far from dead; it’s barely begun.

    This piece first appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

  • How Commuters Get Railroaded by Cities

    With more than $10 billion already invested, and much more on the way, some now believe that Los Angeles and Southern California are on the way to becoming, in progressive blogger Matt Yglesias’ term, “the next great transit city.” But there’s also reality, something that rarely impinges on debates about public policy in these ideologically driven times.

    Let’s start with the numbers. If L.A. is supposedly becoming a more transit-oriented city, as boosters already suggest, a higher portion of people should be taking buses and trains. Yet, Los Angeles County – with its dense urbanization and ideal weather for walking and taking transit – has seen its share of transit commuting decline, as has the region overall.

    Since 1980, before the start of subway and light-rail construction, the percentage of Angelenos taking transit has actually dropped, from 7.0 percent to 6.9 percent, while the region (including the Inland Empire and Ventura County) has seen the transit share drop from 5.1 percent to 4.7 percent. These reductions in ridership have been experienced both on the rail and bus lines.

    The simple truth is that this region is just not structured to run largely on rails. We should not prioritize our transit dollars on trying to remake our region into something resembling New York, or even San Francisco, but in serving the needs, first and foremost, of those who remain dependent on public transit.

    Read the entire piece at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

  • End Of One-Child Policy Is Unlikely To Solve China’s Looming Aging Crisis

    By finally backing away from its one-child policy, China would seem to be opening the gates again to demographic expansion. But it may prove an opening that few Chinese embrace, for a host of reasons.

    Initially, the one-child policy made great sense. The expansion of China’s power under Mao Zedong was predicated in part on an ever-growing population. Between 1950 and 1990, the country’s Maoist era, the population, roughly doubled to 1.2 billion, according to U.N. figures. Deng Xiaoping’s move to limit population growth turned out to be a wise policy, at least initially, allowing China to focus more on industrialization and less on feeding an ever-growing number of mouths.

    Three decades later, this policy clearly has outlived its usefulness. China’s population growth is now among the slowest in the world, and it is aging rapidly. The U.N. expects the Chinese population to peak around 2020, about when India will pass the Middle Kingdom as the world’s most populous country.

    Perhaps the most troubling impact will be on the workforce. In 2050, the number of children in China under 15 is expected to be 60 million lower than today, approximately the size of Italy’s population. It will gain nearly 190 million people 65 and over, approximately the population of Pakistan, which is the world’s sixth most populous country.

    The same broad pattern will play out in Taiwan, South Korea, Singapore and Japan, but those countries’ much greater per capita wealth gives them a greater ability to cushion the impact than China. Demographer Nicholas Eberstadt envisions a developing of fiscal crisis in China caused by “this coming tsunami of senior citizens,” with a smaller workforce, greater pension obligations and generally slower economic growth.

    These factors were clearly part of the calculus that led to suspending the one-child policy. But if China’s rulers think they can change demographic trends on a dime, they are massively mistaken.

    The birthrates of many other East Asian countries have plummeted as well, despite campaigns to promote fertility. In South Korea, Taiwan, Japan, Singapore birthrates are near one per woman, roughly half the rate needed to sustain the current population. With the exception of Singapore, which accepts many immigrants, none have a reasonable path away from rapid aging of their populations and shrinking workforces.

    So what is causing this plunge? Gavin Jones, a demographer based at the National University of Singapore, identifies primarily rapid urbanization and sky-rocketing house prices. In 1979, China’s population was 80 percent rural; today the proportion is roughly half that.

    This transformation makes reversing the one-child policy largely moot, Jones says. Indeed a 2013 easing of restrictions on family size in certain circumstances elicited far fewer takers than expected. Barely 12 percent of eligible families even applied.

    One critical problem is the high cost of real estate, particularly in China’s most important cities, which makes it difficult for young couples to attain the space to house a larger family, let alone leave them sufficient financial resources to raise the children. China’s main cities have suffered arguably the world’s most rapid growth of property prices relative to income. Last year, The Economistestimated house price to income ratios of nearly 20 in Shenzhen 17 in Hong Kong and over 15 in Beijing, between 50% and 100% higher than ultra-expensive Western places like San Francisco, Vancouver or Sydney.

    This explains in part why prosperous cities like Shanghai and Beijing, now have among the lowest fertility rates ever recorded — down near 0.7 per woman, or one-third the replacement rate. If the experience of densification and high prices spread to other Chinese cities, officials may be lucky if couples even bother to have one child.

    One alternative strategy may be to slow urbanization and disperse population to less congested areas, but policy seems to be headed in the exact opposite direction. In 2013 China announced plans to bring an additional 250 million people from the countryside into the city.

    This could boost the economy, as planners hope, but also reduce the fertility rate. All over the world the displacement of rural populations, accelerate the pattern of low fertility, notes the demographer Jones. For one thing, separation from their relatives in the countryside means there is little in the way of family support for taking care of children.

    Jones suggests that urbanization has also undermined the traditionally family centered religious values of Chinese society. Pew Research identifies China as the least religious major country in the world, making it, even more than Europe, a paragon of atheism. All around the world, the decline of religious sentiments has been associated with low fertility around the world.

    Finally the announcement’s timing may not be fortuitous. When China’s economy was booming and the future looked limitless, more families might have considered a second child. But with the economy slowing, it seems logical to expect that weak economic conditions will reduce fertility rates further, as has been the case in Japan and Taiwan.

    What matters most here is what China’s decision reveals about changing attitudes on population. For the last half century, we have tended to be worried about overpopulation, particularly in Asia. And to be sure some parts of the world, notably sub-Saharan Africa still have birthrates far above their capacity to accommodate newcomers.

    But it is now clear that many parts of the world — notably East Asia and Europe — face a very different demographic challenge rooted in falling fertility, diminishing workforces, and rapid aging. As British author Fred Pearce has put it, “The population ‘bomb’ is being defused over the medium and long term.”

    Eliminating the one-child policy may not much change the current trajectory of China’s demography, but it marks a significant shift in the debate about population that will be with us for decades to come.

    This piece first appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo by Paul Munhoven (Own work) [CC BY-SA 3.0], via Wikimedia Commons