New Geography

Category: Demographics

  • There’s No Place Like Home, Americans are Returning to Localism

    On almost any night of the week, Churchill’s Restaurant is hopping. The 10-year-old hot spot in Rockville Centre, Long Island, is packed with locals drinking beer and eating burgers, with some customers spilling over onto the street. “We have lots of regulars—people who are recognized when they come in,” says co-owner Kevin Culhane. In fact, regulars make up more than 80 percent of the restaurant’s customers. “People feel comfortable and safe here,” Culhane says. “This is their place.”

    Thriving neighborhood restaurants are one small data point in a larger trend I call the new localism. The basic premise: the longer people stay in their homes and communities, the more they identify with those places, and the greater their commitment to helping local businesses and institutions thrive, even in a downturn. Several factors are driving this process, including an aging population, suburbanization, the Internet, and an increased focus on family life. And even as the recession has begun to yield to recovery, our commitment to our local roots is only going to grow more profound. Evident before the recession, the new localism will shape how we live and work in the coming decades, and may even influence the course of our future politics.

    Perhaps nothing will be as surprising about 21st-century America as its settledness. For more than a generation Americans have believed that “spatial mobility” would increase, and, as it did, feed an inexorable trend toward rootlessness and anomie. This vision of social disintegration was perhaps best epitomized in Vance Packard’s 1972 bestseller A Nation of Strangers, with its vision of America becoming “a society coming apart at the seams.” In 2000, Harvard’s Robert Putnam made a similar point, albeit less hyperbolically, in Bowling Alone, in which he wrote about the “civic malaise” he saw gripping the country. In Putnam’s view, society was being undermined, largely due to suburbanization and what he called “the growth of mobility.”

    Yet in reality Americans actually are becoming less nomadic. As recently as the 1970s as many as one in five people moved annually; by 2006, long before the current recession took hold, that number was 14 percent, the lowest rate since the census starting following movement in 1940. Since then tougher times have accelerated these trends, in large part because opportunities to sell houses and find new employment have dried up. In 2008, the total number of people changing residences was less than those who did so in 1962, when the country had 120 million fewer people. The stay-at-home trend appears particularly strong among aging boomers, who are largely eschewing Sunbelt retirement condos to stay tethered to their suburban homes—close to family, friends, clubs, churches, and familiar surroundings.

    The trend will not bring back the corner grocery stores and the declining organizations—bowling leagues, Boy Scouts, and such—cited by Putnam and others as the traditional glue of American communities. Nor will our car-oriented suburbs replicate the close neighborhood feel so celebrated by romantic urbanists like the late Jane Jacobs. Instead, we’re evolving in ways congruent with a postindustrial society. It will not spell the demise of Wal-Mart or Costco, but will express itself in scores of alternative institutions, such as thriving local weekly newspapers, a niche that has withstood the shift to the Internet far better than big-city dailies.

    Our less mobile nature is already reshaping the corporate world. The kind of corporate nomadism described in Peter Kilborn’s recent book, Next Stop, Reloville: Life Inside America’s Rootless Professional Class, in which families relocate every couple of years so the breadwinner can reach the next rung on the managerial ladder, will become less common in years ahead. A smaller cadre of corporate executives may still move from place to place, but surveys reveal many executives are now unwilling to move even for a good promotion. Why? Family and technology are two key factors working against nomadism, in the workplace and elsewhere.

    Family, as one Pew researcher notes, “trumps money when people make decisions about where to live.” Interdependence is replacing independence. More parents are helping their children financially well into their 30s and 40s; the numbers of “boomerang kids” moving back home with their parents, has also been growing as job options and the ability to buy houses has decreased for the young. Recent surveys of the emerging millennial generation suggest this family-centric focus will last well into the coming decades.

    Nothing allows for geographic choice more than the ability to work at home. By 2015, suggests demographer Wendell Cox, there will be more people working electronically at home full time than taking mass transit, making it the largest potential source of energy savings on transportation. In the San Francisco Bay Area and Los Angeles, almost one in 10 workers is a part-time telecommuter. Some studies indicate that more than one quarter of the U.S. workforce could eventually participate in this new work pattern. Even IBM, whose initials were once jokingly said to stand for “I’ve Been Moved,” has changed its approach. Roughly 40 percent of the company’s workers now labor at home or remotely from a client’s location.

    These home-based workers become critical to the localist economy. They will eat in local restaurants, attend fairs and festivals, take their kids to soccer practices, ballet lessons, or religious youth-group meetings. This is not merely a suburban phenomenon; localism also means a stronger sense of identity for urban neighborhoods as well as smaller towns.

    Could the new localism also affect our future politics? Ever greater concentration of power in Washington may now be all the rage as the federal government intervenes, albeit often ineffectively, to revive the economy. But throughout our history, we have always preferred our politics more on the home-cooked side. On his visit to America in the early 1830s, Alexis de Tocqueville was struck by the de-centralized nature of the country. “The intelligence and the power are dispersed abroad,” he wrote, “and instead of radiating from a point, they cross each other in every direction.”

    This is much the same today. The majority of Americans still live in a patchwork of smaller towns and cities, including many suburban towns within large metropolitan regions. There are well over 65,000 general-purpose governments, and with so many “small towns,” the average local jurisdiction population in the United States is 6,200, small enough to allow nonprofessional politicians to have a serious impact.

    After decades of frantic mobility and homogenization, we are seeing a return to placeness, along with more choices for individuals, families, and communities. For entrepreneurs like Kevin Culhane and his workers at Churchill’s, it’s a phenomenon that may also offer a lease on years of new profits. “We’re holding our own in these times because we appeal to the people around here,” Culhane says. And as places like Long Island become less bedroom community and more round-the-clock locale for work and play, he’s likely to have plenty of hungry customers.

    This article originally appeared in Newsweek.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His next book, The Next Hundred Million: America in 2050, will be published by Penguin Press early next year.

  • Can Silicon Valley Attract the Right Workforce for its Next Turnaround?

    In less than 30 years, Silicon Valley has rocketed to celebrity status. The region serves as the top magnet for innovation, often occupying the coveted #1 position of global hot spot rankings. More of an informal shared experience than a physical place, Silicon Valley capitalizes on being centrally located in the San Francisco Bay Area, a broader regional zone that is an economic powerhouse.

    Keeping this leadership position requires constant transformation. The region has weathered and reinvented itself through previous downturns. These next few years, in the wake of what some have termed the Great Recession, will provide another test of economic recovery and relevance.

    Based on a recent in-depth research study of global innovation networks, several elements will be essential to the future success of the Bay Area. Two critical but often overlooked factors are specifically community colleges and local demographics. Both are tied directly to people.

    Almost any conversation of innovation assumes that the top research institutions are prerequisites. Boston has MIT and Harvard; the Bay Area has Stanford University and the University of California at Berkeley. One university professor said frankly, “Stanford is part of what the outside world sees as part of the Silicon Valley secret.”

    These tier-one universities do play a critical role within the local economy, receiving the greatest doses of federal research dollars and enjoying their pick of top young talent. They also soak up the spotlight, so much so that the tiers below them are often ignored by local policymakers.

    This elitist mentality dominates the top of the Bay Area food chain. An eminent faculty leader of a biotech institute was astounded when asked about the role of the other local schools for regional growth. He remarked, “We are more focused on the entrepreneurs than the foot soldiers. We kind of believe that [latter] part will take care of itself.”

    This kind of thinking is delusional. In truth, community colleges provide the bedrock for the region’s university ecosystem. They channel bright students up the local educational chain, helping train and transfer them to the upper tiers. Within the Bay Area, the Foothill-De Anza Community College has served a diverse student body, which includes a combination of younger, older, and re-entry students, for over 50 years.

    In particular, community colleges serve as a gateway to ambitious foreign-born talent. Foothill-De Anza admits more international students than any other community college in the U.S., notes Peter Murray, Foothill’s Dean of Physical Sciences, Mathematics and Engineering. Many of these students from outside the U.S. seek a natural entry to Silicon Valley. Once on a student visa, they aggressively pursue their career interests, often transferring to another state school, such as Stanford or the University of California system, to finish their degrees and join the local workforce. Others gain critical technical skills – such as in database management or bioinformatics – critical to operating sophisticated, technology-based companies.

    The community colleges also learn to do more with less. Although state-assisted, Foothill-De Anza funds students at a relatively low rate of $4019 per student, even compared to other national community colleges that average $8041 per student, according to Community College League of California statistics. This is far below what it costs to send students to Berkeley or Stanford.

    Most recently, the school’s administration has faced painfully deep state budget cuts, re-juggling curriculum priorities and teaching staff loads. They adjust by being flexible. The community college system recently announced a partnership with the University of California at Santa Cruz with ambitious plans to build a new billion-dollar multi-university campus at the NASA Ames Research Center. Carnegie-Mellon University in Pittsburgh and San Jose State University in San Jose, Calif., have joined the unique venture that mixes private, public, and industry spheres.

    The new campus will include a new School of Management, major science laboratories, engineering facilities, classrooms, and homes for 3,000 people on 75 acres. The backers are hopeful that this will lead to a “sustainable community for education and research.” If all goes accordingly to plan, this university will offer a new model of education that combines the best of a local community college, local metropolitan school, two universities at a distance, and a strong industry partner.

    Education constitutes only one part of the region’s human capital outlook. Local population trends can reflect the overall strength of the workforce and its ability for continued growth. On a more fundamental level, innovation efforts rest on people who start and grow new ventures. By understanding current demographics, you garner strong hints for future gaps and issues.

    Looking just at Silicon Valley, the area’s population grew modestly by 1.6% to a total of 2.6 million residents for 2008, according to the latest Silicon Valley Index. Compared to California and the U.S., Silicon Valley’s population consists of fewer children and more people between working ages (25–64). This combination bodes well for work productivity, but also indicates that many who start families soon drift to other states to raise the next set of young workers.

    Silicon Valley does better attracting and retaining foreign talent, who seek new opportunity and prosperity. AnnaLee Saxenian, a dean at the University of California at Berkeley, considers this global migration and circulation to be critical in maintaining regional advantage. Foreign immigration has driven Silicon Valley’s population growth. Looking solely at U.S. Census data estimates for the period of 2000 and 2003, foreign migration to the metropolitan cluster of San Francisco, Oakland, and Fremont rose by 10 percent each year, while domestic migration dropped by nearly 14 percent on average.

    Another good sign is that foreign students, particularly those receiving degrees in science and engineering, continue to stay higher in Silicon Valley than other U.S. regions. Unfortunately, when the student visas end, many of these bright workers, who would otherwise stay in the area, take their skills and dreams back home.

    More worrying, college graduates – both foreign and domestic – are leaving the region on their own volition. No city in the greater Bay Area sits in the top 20 list of places to work after college. If American youth are relocating to other areas, then the region may be destined to simply age in place. Local parents in my recent research study simply did not make the connection that nearly all their grown children lived elsewhere – and what that implication entailed for long-term regional vitality.

    Part of this difference in understanding can be explained by generational biases. Each generation brings a dominant set of traits that shape the tone and direction for local innovation. Baby Boomers (born 1943–1960) are focused on their own pursuits. Even when retired, Boomers stay active as consultants and independent contractors, partly to offset decreased life savings as well as enjoy a self-sufficient lifestyle. Often criticized for being narcissistic, they can help to influence innovation activities for others through policy and funding decisions. A senior research policymaker said emphatically, “What are we going to do for the generations out ahead of us? That’s what I care more about than anything.”

    Generation X (born 1961–1981) is the most entrepreneurial generation in U.S. history, but the smallest in size, so policymakers easily overlook them. Certain tensions exist with the prior generation. Research from Neil Howe and William Strauss show that the Boomers are increasingly resisting the decisions made by Gen X to the point of overlooking their contributions in favor of the next generation.

    This is a drastic mistake for two reasons. First, the average age for a U.S.-born technology entrepreneur to start a company is 39, which sits squarely in Gen X. This generation has already become the primary engine for Silicon Valley. Second, this generation has the best academic training and international experience in American history. They may be small in their weight class, but Gen X packs a hefty punch overall. The challenge will be for the Bay Area to retain this population group, as their family and career needs shift.

    In contrast, the Millennials (born 1982–2005) are generally focused on social bonding, authority approval, and civic duty – attributes that may make parents happy, but do not usually drive new economic growth. As the largest generation in American history, they are proving to be massive consumers of technology and social advocates. By and large, Millennials steer away from high-risk ventures, preferring community-oriented activities, and they bring a different set of demands to the Bay Area.

    In the innovation lifecycle, if Boomers serve as advisors and Gen Xers as the entrepreneurs, then the Millennials could provide potent networkers. Each plays an essential role in regional growth, and all frequently vote with their feet. The critical question is whether the Bay Area is positioned to retain the right workforce mix to harness its next turnaround, or whether the dynamism will shift to other regions both in America and abroad.

    Tamara Carleton is a doctoral student at Stanford University, studying innovation culture and technology visions. She is also a Fellow of the Foundation for Enterprise Development and the Bay Area Science and Innovation Consortium.

  • Mexico’s Real War: It’s Not Drugs

    Balding, affable and passionate, Uranio Adolfo Arrendondo may not be a general or political leader, but he stands on the front lines of a critical battle facing Mexico in the coming decade. This struggle is not primarily about the drug wars, which dominate the media coverage–and thus our perceptions–of our southern neighbor. It concerns the economic and political forces stunting the aspirations of its people.

    For the past 36 years, Arrendondo’s small family-owned school, Liceo Reforma Educativa, where he is principal, has served as an incubator for Mexico City’s aspiring middle class. Modest and reasonably priced, the school has offered small-business owners, professionals and mid-level managers a way to propel their children up the economic ladder.

    Yet today Arrendondo finds many parents lacking the resources for even a modest alternative to Mexico’s troubled state-run schools. “The middle class in Mexico is going down,” Arendondo told me in his office by the courtyard of the brightly painted school in the largely lower-middle-class Iztacalco, one of Mexico City’s 16 diverse delegaciones, or boroughs. “The middle class is predated by both the super-rich and the criminal poor. We are squeezed in the middle of the sandwich.”

    This predicament is not unique to Liceo Reforma, which has some 245 students. Data from the Asociacion Nacional de Escuelas Particulares estimate that as many as 400,000 people have pulled their children out of small private schools over the last few years, placing them instead in the generally much inferior public ones.

    This is just one sign of a worrisome trend toward downward mobility, greatly exacerbated by the economic crisis. And it is all the more painful, as it represents a reversal of progress toward an expanding middle class in the 1970s and 1980s. In those decades, Mexico–spurred by its energy wealth and an expanding industrial base–was finally beginning to break away from its age-old pattern of being a society dominated by a few rich and many very poor.

    To be sure, Mexico City’s sprawling expanse still exhibits this legacy of upward mobility. A good number of the capital’s 20 million people can be seen crowding elegant shopping centers, driving late model cars and eating in crowded restaurants. With the elegant Polanco, not far from the central district, lovely Lomas de Chapultepec, or sprawling, ultra-modern Santa Fe, Mexico City can seem very much a first-world city.

    At the same time, however, much of it–including lower-middle class Iztacalco–needs considerable repair. The root of the problem lies in demographics. Although Mexico’s population growth has slowed, labor-force growth still outpaces economic fecundity. Victor Manuel, director general of a leading high-tech institute in Mexico City, estimates the country’s gross domestic product needs to grow at 7% annually to produce the 2 million new jobs needed each year to keep up with labor-force growth. Over the past decade, that growth has been roughly 3%, and last year declined by as much as 7%.

    In the immediate future, many economists expect Mexico’s recovery to lag that of both the U.S. and its Latin neighbors, particularly Brazil and Peru. The most recent survey of expectations among industrialists conducted by Canacintra, a leading national business chamber of manufacturers, found more than half expected conditions to get worse, 10 times as many who expressed optimism.

    The sluggish economy has had its most dramatic impact on the poor, who constitute upward of 25% to 30% of the population. In contrast to earlier decades, their ranks may now be growing, suggests Alfonso Celestino, a social scientist who works for the government of the sprawling Districto Federal, which includes Mexico City. “Mexico is a first-world city, but large parts are like third-world African cities,” he asserts

    Particularly notable has been the growth of the so called “misery suburbs” or pueblos nuevos, sprouting in the outer periphery of the city. In these areas, as well as poor inner city neighborhoods, unemployed young people are being “absorbed,” as Celestino puts it, into the illicit economy. This burgeoning criminal infrastructure preys directly on the super-rich through kidnappings and their bloody feuds that discourage both investors and tourists.

    Yet it is perhaps more dangerous, as violence has grown and poverty increased, that the middle class has begun to recede. Unlike the very poor and the elderly, such families receive little public assistance and often make do by working in the massive “informal economy” that, by some estimates, constitutes as much as 40% of the entire country’s gross product.

    Even before the economic crash in 2007, large percentages of educated Mexican workers were finding it difficult to get placed in high-skilled jobs. Miguel Angel Juarez Noguez, a junior-high math instructor, graduated with a degree in computer science in 2006, but says few of his friends have found employment inside the information sector.

    He believes his parents, both mathematics instructors, enjoyed far better prospects than he and his family–including two children–now face due to a weak job market and rising cost of living. “Today” he suggests, “you need more education to get less.”

    These problems have been exacerbated by the deep recession in the U.S., whose market created many relatively high-paying industrial and technical jobs. Meanwhile, workers remittances from Mexicans in the U.S., the second-largest source of income for the country after oil, have begun to dry up.

    Many discouraged Mexican immigrants have returned home, notes Celestino, but they find few employment opportunities. And Mexico’s border boomtowns, which once offered considerable opportunity, are now suffering not only from the American recession but from the shift of production to China. Coastal communities have been decimated by a decline in tourism, a result not only of the recession but also of concerns over violence and swine flu epidemic.

    Ultimately, many concede that the basic problem lies not in the outside world but in Mexico itself. Although much can be said for greater transparency and economic liberalism under the current PAN government, most believe the entrenched system of crony capitalism has been barely affected by the political change.

    This system–where bribery is commonplace and connections are necessary to build even a small business–stymies growth by undermining innovation, notes technology entrepreneur Victor Manuel. “People come back from schools, or from the United States, with all sorts of skills and money,” he notes, “but there’s no system here to create an economy they can contribute to.”

    Such frustrations are heightened by a sense that other countries–notably the BRIC nations of Brazil, Russia, India and China–are rushing ahead while the once-promising Mexico falls behind. These countries appear to be tapping their human and material resources more efficiently and strategically than Mexico. “There is no vision from the state,” Manuel says, echoing a common refrain.

    Edgar Moreno, a 37-year-old M.B.A. who currently works for Hewlett-Packard at the ultra-modern Santa Fe district southeast of the city, agrees that political dysfunction is the main impediment to progress. Corruption and inefficiency hamper the development of the nation’s potentially huge energy resource, and that’s one reason why Mexico lacks the capital to develop new enterprises. Real interest rates for entrepreneurial ventures start at 12%.

    Moreno’s own ambition, to develop renewable fuels based on sugar, corn and other crops, is also held back by bureaucratic obstacles that discourage such ventures. “It’s not the location of the country that keeps us from developing the way we should,” he points out. “It’s the laws, the framework, how the government does things. Mexicans have lots of ideas and a lot of interests, but the system is stacked against us.”

    The surge in drug violence–over 7,000 died just last year–adds to the perception that Mexico may be on the verge of becoming a “failed state.” Mexican author Enrique Krauze believes the crime wave constitutes Mexico’s “most serious crisis” since the bloody 1910 Revolution, an upheaval that cost more than 2 million deaths.

    Yet, however terrible the violence, Arrendondo believes the decline of the middle class and upward mobility presents Mexico with a more lethal, long-term threat. The parents of the Liceo’s students, he argues, may not “take up a pistol” like their forebears a century ago but might embrace a return to the anti-American authoritarianism and protectionism of the past.

    This would not be good news for America. Mexico stands as our second export market, well ahead of China. Mexicans are also our closest cousins in terms of blood–four in 10 claim to have relatives in the U.S.–and our tastes in food, music and culture increasingly converge.

    This suggests that what happens to the kids and their parents at Liceo Reforma Educativa matters to us as well. A thriving Mexico would need to send us less of their poor and could buy more of what we produce. Mexico’s fate has at least as much relevance to our future as developments in Iraq, Afghanistan, Europe or even China, where our media and politics focus most of their attention.

    “These kids’ parents are struggling with opportunities lost and destroyed,” Arrendondo told me. “We have to change that. Mexico has to become a place where opportunities are created for kids like these. That’s the most important thing to determine the future.”

    This article originally appeared at Forbes.com.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His next book, The Next Hundred Million: America in 2050, will be published by Penguin Press early next year.

  • When Thanatos Beat Eros, Mapping Natural Population Decreases

    For an advanced capitalist society, the United States has a quite high birth rate, and substantial natural increase. Yet despite this, almost a third experienced natural decrease, an excess of deaths over births, over the recent 2000-2007 period. Some counties with natural decrease still grow in population because of sufficient in-migration, but more typically, natural decrease is associated with high levels of out-migration and with long term population decline.

    My first map, Figure 1, depicts counties with natural decrease at five levels, with warm colors marking the higher “rates” (actually here, simply the share that natural decrease is of the base population in 2000), and cool colors lower rates, blue being closest to a balance of births and deaths.

    The Great Plains, the part of the country most dependent on agriculture, has led this trend as it has been since probably 1960, with counties from Texas to North Dakota, Montana (and beyond into Canada) experiencing among the highest levels of natural decrease. Others include central Florida, Appalachia, and some interior parts of New England, the upper Michigan to northern Minnesota iron range, and a sizable scatter of counties across the west.

    What causes natural decrease? First is a pattern of long term out-migration of the surplus young, who could not be supported by the limited rural economy and other natural resource based industries. Second is the growth of the elderly population from selective migration to amenity retirement areas. Florida is the “flagship” case, but to a lesser degree it occurs in favored local environments in most of the country. Third would be a situation of natural decrease because of unusually high mortality. Fortunately, there is no example of this in the United States.

    The geography of natural decrease

    First there is a small set of counties with natural decrease, more deaths over births, but still net positive growth due largely to net domestic in-migration (magenta and yellow on the county types map, Figure 2). The bulk of these counties are retirement amenity areas, mostly but not entirely in the Sunbelt, and mostly but not entirely in the south and west. Another even smaller group is characterized by long term declining industry and mining based economies, but also offers affordable housing stock for second homes and later retirement. We see this especially in Appalachia.

    The largest cluster of the first type of places covers a swath of central Florida, including such cities as St. Petersburg, Sarasota, Port Charlotte, Melbourne, Daytona Beach, followed by southwestern Oregon, northwestern Arizona (Prescott, Lake Havasu City), central Colorado (west of Colorado Springs), parts of rural Northern California, Wyoming, South Dakota, Montana and Washington state.

    The main cluster of the second type, areas with industrial decline that have become amenity retirement destinations, are in Appalachia, especially the North Carolina – Tennessee border area (Great Smokies), selected counties in northern West Virginia and exurban counties around Pittsburgh. A prominent cluster is the Scranton-Wilkes-Barre, Hazleton area of east central PA. Scattered Midwestern examples include places like Hot Springs, Arkansas, 3 counties in Southeast Illinois, along with areas along Lake Superior, parts of Arkansas as well as on the Texas Gulf coast.

    The more rural natural decrease counties with net in-migration (215 counties, yellow on the map) tend to occur in the same regions. The two main “belts” of such counties are retirement and resort counties extending from the central Texas hill country through Ozark plateau and lakes, and again parts of Appalachia. Virginia has the largest number of such counties, some just beyond the commuter zone of Washington. Similar areas occur across the far north, characterized by recreation and retirement as well as ex-logging or mining. A third area includes areas in western Montana, popular with California retirees, and a fourth is far northern CA.

    Then there are counties losing population from natural decrease and net internal out-migration. Two-thirds (576) of counties with natural decrease experience this expected pattern of long term decline of resource-based economies. Of these 105 have at least a 50 percent urban population (green on the map), but most (471 of all 861) natural decrease counties are predominantly rural (blue on the map).

    The Great Plains, from Texas though Dakotas and eastern Montana to Nebrasla represents the largest region for natural decrease and populatiob loss. represents the largest region for such losses. This is quintessential high plains farm belt, which continues to experience mechanization, loss of local businesses and out migration of the young for at least 80 years now. But although the large majority of rural counties with net out-migration (blue on the map) are in the Great Plains belt, significant numbers also occur in the forest and mining counties in Maine, Michigan, eastern Oregon, northeastern New York, and northern Appalachia.

    This leaves an interesting scattering of counties from Texas, northern Louisiana, Arkansas, Alabama, and the North Carolina-Virginia border region. These are mainly farming areas, often with significant (35 to 60 percent) Black population shares, largely elderly, areas somewhat “left behind” in the growth of industrialization and urbanization of the south. This is where young Blacks have left for city opportunities, just as young whites have from the prairies and the mines.

    What will the future bring?

    I examined maps of counties with 0 to 1% natural increase, or with high shares of the population between 45 and 64, which are plausible candidates for a shift to natural decrease, but also looked at counties with 0 to 1 % natural decrease, which are candidates for a shift to natural increase.

    The most likely future areas for a shift to natural decrease include many in a wider Appalachian belt, within the greater Mississippi valley from Louisiana to Canada. Hundreds of these counties have the potential to shift to natural decrease by 2025, as the vanguard of the Babyboomers reach 80. The likelihood of the shift does depend on the proximity of the county to vigorous urban and metropolitan areas and on counties’ relative success or failure at attracting retirees. Other commentators have talked of the “slowdown” of migration to and growth of Florida, and the spread of retiree settlement to many other parts of the country. This is already evident on the map, but it is premature to write off Florida’s appeal to retirees, particularly as house prices there have plunged.

    There are also forces that may slow, or even reverse, natural decrease. Northward expansion of the Hispanic population will have the contrary effect of raising birth rates and a shift to natural increase. Some areas that have attracted affluent retiree migrants also could experience sufficient investment to foster more general growth.

    At the same time, the retirement geography of the massive Baby Boomer cohort has the potential of redrawing the map. But overall, I believe we will see more counties experiencing natural decrease.

    This process has now reached around 800 counties. But we will see more of this when the nation approaches ZPG, zero population growth, perhaps after 2050, in many counties

    Richard Morrill is Professor Emeritus of Geography and Environmental Studies, University of Washington. His research interests include: political geography (voting behavior, redistricting, local governance), population/demography/settlement/migration, urban geography and planning, urban transportation (i.e., old fashioned generalist)

    References:
    Morrill, Richard, 1993, The spread of natural decrease, FOCUS,43- 30-33
    Morrill, Richard\, 1994, Aging in place, age specific migration and natural decrease, Annals of Regional Science, 28- 1-26
    Cromartie, John and Kandel, William, 2008 Rural population and Migration-Trend 4,Natural decrease on the rise. Economic Research Service,USDA \
    Cromartie, John and Nelson, Peter, 2008, BabyBoomer migration and socioeconomic change in “no growth’ counties. Paper, Rural Sociological Society.
    Frey, William,, 2004, Generational Pull, American Demographics
    Johnson, Kenneth and Beale, Calvin, 1992, Natural population decrease in the United States, Rural Development Perspectives, 8 , pp 8-15
    Johnson, Kenneth
    Hull, Victor, Retirement choices stretch beyond Florida. 2006,

  • Purple Politics: Is California Moving to the Center?

    You don’t have to be a genius, or a conservative, to recognize that California’s experiment with ultra-progressive politics has gone terribly wrong. Although much of the country has suffered during the recession, California’s decline has been particularly precipitous–and may have important political consequences.

    Outside Michigan, California now suffers the highest rate of unemployment of all the major states, with a post-World War II record of 12.2%. This statistic does not really touch the depth of the pain being felt, particularly among the middle and working classes, many of whom have become discouraged and are no longer counted in the job market.

    Even worse, there seems little prospect of an immediate recovery. The most recent projections by California Lutheran University suggest that next year the state’s economy will lag well behind the nation’s. Unemployment may peak at close to 14% by late 2010. Retail sales, housing and commercial building permits are not expected to rise until the following year.

    This decline seems likely to slow–or even reverse–the state’s decade-long leftward lurch. Let’s be clear: This is not a red resurgence, just a shift toward a more purplish stance, a hue that is all the more appropriate given the economy’s profound lack of oxygen.

    There is growing disenchantment with the status quo. The percentage of Californians who consider the state “one of the best places” to live, according to a recent Field poll, has plummeted to 40%, from 76% two decades ago. Pessimism about the state’s economy has risen to the highest levels since Field started polling back in 1961.

    Inevitably, this angst has affected political attitudes. Though still lionized by the national media, Gov. Schwarzenegger’s approval ratings have fallen from the mid-50s two years ago into the low 30s. The 12% approval rate for the state legislature, according to a Public Policy Institute of California survey in May, stands at half the pathetic levels recorded by Congress.

    Moreover, voters now favor lower taxes and fewer services by a 49-to-42 margin–as opposed to higher taxes and more services. Support for ultra-green policies aimed to combat global warming has also begun to ebb. For the first time in years, a majority of Californians favors drilling off the coast. Californians might largely support aggressive environmental protections, but not to the extreme of losing their jobs in the process.

    Remarkably, state government seems largely oblivious to these growing grassroots concerns. The legislature continues to pile on ever more intrusive regulations and higher taxes on a beleaguered business sector. Agriculture, industry and small business–the traditional linchpins of the economy–continue to be hammered from Sacramento.

    Agriculture now suffers from massive cutbacks in water supplies, brought about in part by drought, but seriously worsened by the yammerings of powerful environmental interests. Large swaths of the fertile central valley are turning into a set for a 21st-century version of Steinbeck’s Grapes of Wrath.

    At the same time, the state’s industrial base is rapidly losing its foundation. Toyota recently announced it was closing its joint venture plant in Fremont, the last auto assembly operation in the state, shifting production to Canada and Texas. Even the film business has been experiencing a secular decline; feature film production days have fallen by half over the decade, as movie-making exits for other states and Canada.

    Most important, California may be undermining its greatest asset: its diverse, highly creative and adaptive small-business sector. A recent survey by the Small Business and Entrepreneurship Council ranked California’s small-business climate 49th in the nation, behind even New York. Only New Jersey performed worse.

    Regulation plays a critical role in discouraging small-business expansion, a new report from the Governor’s Office of Small Business Advocate suggests. Prepared by researchers from California State University at Sacramento, the report estimates that regulations may be costing the state upward of 3.8 million jobs. California currently has about 14 million jobs, down 1 million since July 2007.

    Ironically, the regulatory noose is now slated to tighten even further as a result of radical measures–from energy to land use–tied to reducing greenhouse gases. Another study, authored by California State University researchers, estimates these new laws could cost an additional million jobs.

    Many in the state’s top policy circles, as well as academics and much of the media, dismiss the notion that regulations could be deepening the recessionary pain. Some of this stems from the delusion–always an important factor in this amazing state–that ultra-green policies will actually solidify California’s 21st-century leadership. Few seem to realize that other states, witnessing the Golden State’s economic meltdown, might not rush to emulate California’s policy agenda.

    Internally, discontent with the current agenda seems particularly strong in the blue-collar, interior regions of the state. Brookings demographer Bill Frey and I have described this area as the “Third California.” In the first part of the decade, this region expanded roughly three times as rapidly as Southern California, while the Bay Area’s population remained stagnant.

    Today the Third California represents roughly 30% of the state’s population, compared with barely 18% for the ultra-blue Bay Area. The most conservative part of the state has skewed somewhat more Democratic in recent elections, largely due to migration from coastal California and an expanding Latino population.

    But the intense economic distress now afflicting the interior counties–where unemployment rates are approaching 20%–may now reverse this process. The ultra-green politics embraced by the Democrats’ two prospective gubernatorial nominees-Attorney General Jerry Brown and San Francisco Mayor Gavin Newsom–may not appeal much to a workforce heavily dependent on greenhouse-gas-emitting industries like farming, manufacturing and construction.

    Eventually, the Democrats may rue their failure to run a pro-business, pro-growth candidate, particularly one with roots in the interior region. This oversight could cost them votes among, say, Latinos, who have been far harder hit by the recession than the more affluent (and overwhelmingly white) coastal progressives epitomized by Brown and Newsom. Along with independents, roughly one-fifth of the electorate, Latinos could prove the critical element in the state’s purplization.

    This, of course, depends on the Republicans developing an attractive pro-growth alternative. In recent years, the party’s emphasis on conservative cultural issues and xenophobic anti-immigrant agitation has hurt the GOP in the increasingly socially liberal and ethnically diverse California.

    Although he has proved a poor chief executive, Gov. Schwarzenegger did at least show such a political approach could work. The recent emergence of three attractive Silicon Valley-based candidates, including former eBay CEO Meg Whitman and State Insurance Commissioner Steve Poizner, as well as the likable libertarian-leaning former congressman Tom Campbell, could score well at the polls.

    This political course-correction should be welcomed not only by Republicans but by California’s moderate Democrats and Independents. However blessed by nature and its entrepreneurial legacy, California needs to move back to the pro-growth center if it hopes to revive both its economy and the aspirations of its people.

    This article originally appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His next book, The Next Hundred Million: America in 2050, will be published by Penguin Press early next year.

  • How Smart Growth Disadvantages African-Americans & Hispanics

    It was more than 45 years ago that Dr. Martin Luther King, Jr. enunciated his “Dream” to a huge throng on the Capitol Mall. There is no doubt that substantial progress toward ethnic equality has been achieved since that time, even to the point of having elected a Black US President.

    The Minority Home Ownership Gap: But there is some way to go. Home ownership represents the core of the “American Dream” that was certainly a part of Dr. King’s vision. Yet, there remain significant gap in homeownership by ethnicity. Rather than a matter of discrimination, this largely reflects differing income levels between White-Non-Hispanics, African-Americans and Hispanics or Latinos. Today, approximately 75% of white households own their own homes. Whites have a home ownership rate fully one-half higher than that of African-Americans and Hispanics or Latinos at 47% and 49% (See Figure).

    Setting the Gap in Stone: A key to redressing this difficulty will be convergence of minority household incomes with those of whites, and that is surely likely to happen. However, there is another important dynamic in operation: house prices in some areas have risen well in advance of incomes, so that convergence alone can not narrow the home ownership gap in a corresponding manner. It is an outrage for public policy to force housing prices materially higher so long as home ownership remains beyond the incomes of so many, especially minorities.

    The Problem: Land Use Regulation: The problem is land use regulation. The economic evidence is clear: more restrictive land use regulation raises house prices relative to household incomes. This can be seen with a vengeance in the house price increases that occurred during the housing bubble. As we have previously described, metropolitan markets with more restrictive land use regulation (principally the more radical “smart growth” policies) experienced house price escalation out of all proportion to other areas in the nation. In some cases, they topped out at nearly four times historical norms. On the other hand, in the one-half of major metropolitan area markets where land use regulations were less severe, house prices tended to increase to little more than historic norms, at the most.

    How Smart Growth Destroys Housing Affordability: This difference is principally due to the price of land, which is forced upward when the amount of land available for building is artificially limited, as is the case in smart growth markets. At the peak of the bubble, there was comparatively little difference in house construction costs per square foot in either smart growth or less restrictive markets. However, the far higher land prices drove house prices in smart growth markets far above those in less restrictively regulated markets. Where house prices rise faster than incomes, housing affordability drops as prices rise at escalated rates.

    Wishing Away Reality: It is not surprising that the proponents of smart growth undertake Herculean efforts to deflect attention away from this issue. Usually they pretend there is no problem. Sometimes they produce studies to indicate that limiting the supply of land and housing does not impact housing affordability, which is akin to arguing that the sun rises in the West. Even the proponents, however, cannot “walk a straight line” on this issue, noting in their most important advocacy piece (Costs of Sprawl – 2000) that their more important strategies have the potential to increase the cost of housing.

    The Assault on Home Ownership: Worse, well connected Washington interest groups (such as the Moving Cooler coalition) and some members of Congress seek to universalize smart growth land rationing throughout the nation, which would cause massive supply problems and housing price inflation that occurred in some markets between 2000 and 2007. Even after the crash, these markets experienced generally higher house prices relative to incomes in smart growth markets than in traditionally regulated markets.

    House Price Increases and Minorities: House price increases relative to incomes weigh most heavily on ethnic minority households, because their incomes tend to be lower. This is illustrated by an examination of the 2007 data from the American Community Survey, in our special report entitled US Metropolitan Area Housing Affordability Indicators by Ethnicity: 2007. The year 2007 was the peak of the housing bubble, but represents a useful point of reference for when future “smart growth” policies were imposed nationwide.

    Median Priced Housing: The data (Table) indicates that median house prices were 75% or more higher for African-Americans than Whites, however that African-Americans in smart growth markets require 84% more to buy the median priced house. The situation was slightly better for Hispanics or Latinos with median house prices at least 50% more relative to incomes than for Whites. House prices relative to Hispanic or Latino median household incomes were 86% higher in smart growth markets than in less restrictively regulated markets.

    SUMMARY OF HOUSING INDICATORS BY
    LAND USE REGULATION CATEGORY
    Metropolitan Areas over 1,000,000 Population: 2007
    HOUSING INDICATOR Less Restrictive Land Use Regulation Markets More Restrictive Land Use Regulation Markets All Markets More Restrictive Markets Compared to Less Restrictive Markets
    MEDIAN VALUE MULTIPLE        
    All 3.1 5.8 4.5 1.89
    White Non-Hispanic or Latino 2.7 5.1 3.9 1.90
    African-American 4.9 8.9 6.9 1.84
    Hispanic or Latino 4.2 7.9 6.1 1.86
    LOWEST QUARTILE VALUE MULTIPLE      
    All 2.1 4.2 3.2 2.01
    White Non-Hispanic or Latino 1.8 3.7 2.8 2.01
    African-American 3.3 6.5 5.0 1.95
    Hispanic or Latino 2.9 5.7 4.4 1.98
    MEDIAN RENT/MEDIAN HOUSEHOLD INCOME      
    All 13.8% 17.1% 15.5% 1.24
    White Non-Hispanic or Latino 12.1% 15.1% 13.6% 1.25
    African-American 21.9% 26.1% 24.0% 1.19
    Hispanic or Latino 19.1% 23.0% 21.1% 1.20
    LOWER QUARTILE RENT/MEDIAN HOUSEHOLD INCOME    
    All 10.8% 13.1% 12.0% 1.22
    White Non-Hispanic or Latino 9.4% 11.6% 10.5% 1.23
    African-American 17.0% 20.0% 18.5% 1.17
    Hispanic or Latino 14.9% 17.5% 16.2% 1.18
    NOTES        
    Median Value Multiple: Median House Value divided by Median Household Income
    Low Quartile Value Multiple: Low Quartile House Value divided by Median Household Income
    2007 Data
    Calculated from American Community Survey (US Bureau of the Census) Data
    “More restrictive” land use regulation markets (generally "smart growth") include those classified as "growth management," "growth control," "containment" and "contain-lite" and "exclusions: in "From Traditional to Reformed A Review of the Land Use Regulations in the Nation’s 50 largest Metropolitan Areas" (Brookings Institution, 2006) and markets with significant large lot zoning and land preservation restrictions (New York, Chicago, Hartford, Milwaukee, Minneapolis-St. Paul, and Virginia Beach). Less restrictive" land use regulation markets (generally "traditional") include all others, except for Memphis, where urban growth boundaries have been drawn far enough from the urban area to have no perceivable impact on land prices and Nashville, where the core county is exempt from the urban growth boundary requirement in state law.

    Lower Priced Housing (Lowest Quartile): I recall being told by a participant at a University of California–Santa Barbara economic forum organized by newgeography.com contributor Bill Watkins that, yes, smart growth increases house prices, but not for lower income residents. My challenger went so far as to say that lower income households were aided economically by smart growth. The facts are precisely the opposite. Comparing the lowest quintile (lowest 25%) house price to median household incomes indicates that minorities pay even a higher portion of their incomes for lowest quintile priced houses than the median priced house. African-Americans in smart growth markets needed 95% more relative to incomes to afford the lowest quartile house. Hispanics or Latinos needed 98% more.

    Rental Housing: The problem carries through to rental housing. There is a general relationship between rental prices and house prices, though rental prices tend to “lag” house price increases. In the smart growth markets, minorities must pay approximately 20% more of their income for the median contract rental in smart growth metropolitan areas than in less restrictively regulated markets. Similar results are obtained when comparing minority household median incomes with lowest quintile contract rents, with African-Americans paying 17% more of their incomes in smart growth markets and Hispanics or Latinos paying 18% more.

    Moreover, it is important to recognize that all of the above data is relative, based on shares or percentages of incomes. Varying income levels are thus factored out. Minority and other households in smart growth markets face costs of living that are approximately 30% higher than in less restrictively regulated markets, according to analysis by US Department of Commerce Bureau of Economic Analysis economists. Some, but not all of the difference is in higher housing costs.

    Social Costs of Smart Growth: In 2004, the Tomas Rivera Policy Institute, which focuses on Latino issues, noted concern about the homeownership gap in California, which has been ground zero for land use regulation driven house price increases for decades:

    Whether the Latino homeownership gap can be closed, or projected demand for homeownership in 2020 be met, will depend not only on the growth of incomes and availability of mortgage money, but also on how decisively California moves to dismantle regulatory barriers that hinder the production of affordable housing. Far from helping, they are making it particularly difficult for Latino and African American households to own a home.

    Examples of the restrictions cited by the Tomas Rivera Policy Institute are restrictions on the supply of land, high development impact fees and growth controls.

    California has acted decisively, but against the interests of African-Americans and Hispanics or Latinos. The state enacted Senate Bill 375 in 2008, which will impose far stronger state regulations on residential development, increasing the likelihood that minorities in California will always be disadvantaged relative to White-Non-Hispanics. At the same time, State Attorney General Jerry Brown has forced some counties to adopt more restrictive land use regulations through legal actions. California, which had for decades been considered a state of opportunity, is making home ownership and the pursuit of the “American Dream” far more difficult, particularly for its ever more diverse population.

    Stopping the Plague: In California, the hope to increase African-American and Latino home ownership rates to match those of white-non-Hispanics may already be beyond reach due to the that state’s every intensifying radical smart growth policies. However, the “Dream” continues to “hang on” in many metropolitan markets. Hopefully Washington will not put a barrier in the way of African-Americans and Hispanics or Latinos that live elsewhere in the nation.

    US Metropolitan Area Housing Affordability Indicators by Ethnicity: 2007 includes tables with data for each major metropolitan area in the United States

    Photo: Starter house in Atlanta suburbs (by the author)

    Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris. He was born in Los Angeles and was appointed to three terms on the Los Angeles County Transportation Commission by Mayor Tom Bradley. He is the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.”

  • Pittsburgh Renaissance?

    In the third of a three part New Geography series on Pittsburgh for the G-20 summit, Aaron Renn assesses Pittsburgh’s value as a model region for other cities suffering decline.

    As the G-20 leaders prepare to convene in Pittsburgh, expect the recent chorus of praise for that city’s transformation to reach a crescendo. Pittsburgh, once the poster child for industrial decline and devastation, is now the media darling as an exemplar of how to turn it around. The New York Times talks about how “Pittsburgh Thrives After Casting Steel Aside” while the New York Post informs us that “Summer in Pittsburgh Rocks”. The Economist named Pittsburgh America’s most livable city. This emerging reputation for cracking the code on revitalization is prompting struggling burgs like Cleveland and Detroit to ask what lessons the Steel City holds for them.

    But does reality live up to the hype? Has Pittsburgh really turned the corner? For the most part, a look at the data suggests otherwise:

    1. Population Is Shrinking. The city of Pittsburgh has lost over 50% of its population since its peak and it is still declining. Just since the 2000 census Pittsburgh has lost nearly 25,000 people – over 7% of its population. The metro area is shrinking too, making Pittsburgh one of only a handful of large metro areas with the dubious distinction of population decline. Others on that list: Buffalo, Cleveland, Detroit, and New Orleans. Since 2000, metro Pittsburgh has actually lost a greater percentage of its population than metro Detroit.
    2. People Are Leaving. Part of Pittsburgh’s population loss is a result of a rare case of more deaths than births. But the region has net outmigration too. Few other stats are so telling about a city. Is this a place people are voting with their feet to move to or leave from? They may come to school or an internship at a local hospital, but, more often than not, they are not putting down roots. With more people moving out than moving in, Pittsburgh is clearly not a destination city
    3. International Immigrants Are Staying Away. Metro Pittsburgh’s foreign born population percentage was 2.6% in 2000 – very low. The Pittsburgh Technology Council summed it up best when it said, “Our region has negligibly grown its foreign born population.” Contrast Pittsburgh with the national average for foreign born population of 5.7%, and regions like Boston (11.2%), Denver (9.3%), and even Detroit (6.1%).
    4. Poverty Is High. Pittsburgh’s economic area poverty rate is worse than all cities benchmarked against it by Pittsburgh Today at 11.6% versus 9.3% in Milwaukee, 9.9% in Cincinnati, and 10.5% in Cleveland among 14 comparison cities.
    5. The City Is in Debt – Bigtime. Pittsburgh is buried under a mountain of liabilities. Its unfunded pension liability is over $1 billion. Its annual interest on its debt is $352 per capita, far higher than peer cities. Pittsburgh Quarterly is very direct: “Put simply, compared with all the benchmark regions, Pittsburghers have been saddled by their governments with relatively huge amounts of public debt.”

    Still, by other measures Pittsburgh is, if not thriving, certainly outperforming both the Rust Belt and the nation as a whole. Its July metro unemployment rate of 7.8% is well below the national average. In the last 12 months, Pittsburgh lost 2.8% of its jobs, which is a much better performance than regions like Chicago (-4.5%), Atlanta (-4.9%), and Portland (-5.8%). Its housing market, having never boomed to begin with, has not experienced the declines of most of the rest of the country, making it a Rust Belt outpost of the “zone of sanity”.

    Pittsburgh has a large “eds and meds” sector, led by the University of Pittsburgh, whose medical center employs over 25,000 people, and Carnegie-Mellon University. Pittsburgh was early to the game in this approach, with steel fortunes powering the development of these institutions starting in the 1950s. There are now seven universities within a five mile radius of downtown.

    Eds and meds employment is quasi-public sector. It can be a source of stability, but it’s not proved to be the source of dynamism that you see in Silicon Valley, around Boston or even Madison. Sure, there have been some high tech successes in Pittsburgh, but the city is far from a hub of the innovation economy.

    Pittsburgh’s downtown remains an employment center with a density uncommon in a Rust Belt full of cores defined more by parking lots than vital streetscapes. Pittsburgh has long had a rich fabric of dense, urban neighborhoods, and many of those are strengthening. The city’s geography retains its charm, and a lot of former industrial areas along the three rivers have been repurposed for recreational use.

    The truth is that the Pittsburgh story is still being written. It’s still more “green shoots” than a true renaissance so far. Until its migration statistics change course, and it demonstrates sustained and growing economic dynamism, the city cannot claim to have truly turned itself around. Still, the signs of progress are better than in places like Cleveland and Detroit.

    What accounts for this? A few success factors come to mind:

    1. Passion for the City. Older river cities like Cincinnati and New Orleans tend to have strong provincial cultures, with all the good and bad that implies. You see this in Pittsburgh in the unique local “yinzer” dialect, traditions like the cookie table at weddings, and of course the Steeler Nation. There’s a strong attachment to the native soil in Pittsburgh, even for those who left.
    2. Starting Early Into the Cycle. Jane Jacobs pegged Pittsburgh’s economic stagnation to 1910. The steel industry collapsed decades ago. Pittsburgh had troubles before other cities, so it is figuring out how to deal with them before other cities. It takes a long time to recover from a hundred years of status quo thinking.
    3. Shrinkage. There’s no longer a need for a Fort Pitt to project military power. The steel industry is gone and with it the need for thousands of steelworkers. Part of the issue in the Rust Belt is that there is no longer any economic raison d’etre for some of these big cities. Pittsburgh long was too big for its role in today’s economy, so shrinkage was good. This also created the rather unique institution of the Pittsburgh diaspora, best known through the Steeler Nation. Like the Indian and Chinese diasporas, it’s a network of people who went out, made connections in the world, built new skills, etc. that Pittsburgh can now tap into, as tirelessly documented by Jim Russell.
    4. The Totality of the Collapse. On Wall Street they call it “capitulation”, where the markets hit bottom and there is no positive sentiment. You have to hit that bottom to start back up. Pittsburgh went through a civic devastation when the steel industry collapsed the likes of which few American cities have seen. This shock to the system created the conditions necessary for change that a more gradual decline would not have.
    5. Dramatic Educational Improvements. The Chicago Fed reported that Pittsburgh’s national rank for percentage of adults who were high school grads went from 55th to 3rd. And for college grads it went from 69 to 37. These are amazing numbers.

    Is the Pittsburgh model transplantable elsewhere in the Rust Belt? In the short term, no. Pittsburgh’s successes of today are rooted in 30 years of steel industry collapse, shrinkage, and boosting its brain power. The auto industry restructuring eventually might bring a needed jolt to Detroit and other Rust Belt cities, but recovery is a long term game that requires sustained commitment over many years to things like education. Pittsburgh has achieved some of this, perhaps not as spectacularly as the media suggests, but in ways that are still useful for other Rust Belt cities to ponder.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile.

  • Hyping Pittsburgh: With the Global Economy in Dire Straits, Hell with the Lid Blown Off Never Looked Better

    As host of the G-20 summit, Pittsburgh briefly will sit in the global spotlight. In this second article of a three part series featuring Pittsburgh, rust belt observer Jim Russell digs into migration and education trends and what it may mean for the region.

    Chris Briem (the blogger behind Null Space) jokingly called it the “Mystic Order of the Yinzerati”. He would later take the idea about the influence of Pittsburgh expatriates more seriously. I’ve referenced talk about a conspiracy theory involving the diaspora and how the current US President seems to favor the Steel City. How else does one explain the location of the upcoming G-20 economic summit?

    Site Selection magazine is the latest conduit for Pittsburgh’s aggressive image makeover. By now, the narrative is polished. As an active consumer of all media about Pittsburgh, I find the story stale. The lines are well-rehearsed and remind me of an article I read last year in the New York Times or a decade ago in the Wall Street Journal. More often than not, I would discover that the writer of the glowing review has a Pittsburgh connection.*

    Recently, a journalist from Forbes interviewed me about the Pittsburgh renaissance. I mentioned the positive press the city has received and how the Burgh Diaspora seemed to be behind it all. At that point, she confessed that she was from Pittsburgh. The result? Pittsburgh is an archetype for the thriving 21st century city.

    I’m an avid Pittsburgh booster and I would bet that this round of rebranding will finally take root. However, that doesn’t mean I believe everything I read. Left out are all the challenges the region faces. Local bloggers fret about the city pension crisis getting swept under the rug, pointing out that the many myths used to promote Pittsburgh are disingenuous. Some natives have gone so far as to suggest that all the propaganda is nothing more than gilding a turd. After all, the population of Pittsburgh is still in decline. What about the brain drain?

    Ironically, the brain drain from Pittsburgh is the reason why I’m so bullish on this region’s future. Taking notice of the prolific Yinzerati, I began to see talent out-migration in a different light. Not every Rust Belt city could marshal the kind of sustained campaign that has benefited the New Pittsburgh. The more fantastic the fabrication, the more impressive the media blitz would seem. Surely expatriates from other shrinking cities could do the same. I’ll tell you why they haven’t.

    As brain drain is commonly understood, every region suffers from the same affliction. But the exodus from Pittsburgh was exceptional. Chris Briem charted the difference between unemployment rates in Pittsburgh and the national average from 1970 to present day. You might note that right now, never has the job market looked relatively better. What should really stand out is how bad the economy was in the early 1980s. It was a remarkable period of out-migration for young talent, robbing Pittsburgh of almost an entire generation.

    As I began to understand the connection between educational attainment and geographic mobility, I speculated that Pittsburgh’s brain drain was the result of a substantial investment in local human capital. The chronic decline in population is the result of successful workforce development policy. At least, that was my theory.

    Bill Testa, who works for the Federal Reserve Bank of Chicago, provided the evidence I was seeking. Compared with other Rust Belt cities and the nation over the period 1969-2006, Pittsburgh has anemic total employment growth. Strangely, Pittsburgh is a cohort outlier (in positive respects) if we consider gains in per capita income.

    Testa hints at the reason behind the surprising statistic:

    While Pittsburgh ranked low in college attainment in 1970, its gains in this metric since then have been the most rapid. Perhaps not accidentally, Pittsburgh’s growth in per capita income also outpaced other cities in the region.

    Pittsburgh did a great job of educating its populace. This policy would betray the region during the hard times of the early 1980s. Dynamic labor mobility found expression in the only avenue available, relocation. The Mysterious Order of the Yinzerati was born.

    Pittsburgh hasn’t been able to cash in on the diaspora dividend until the last decade. As I noted above, positive spin about Pittsburgh isn’t anything new. During the early 1990s, the work of urban planner Paul Farmer was nationally admired. Cities such as Minneapolis hoped to mimic Pittsburgh success. Former mayor Tom Murphy, not remembered fondly in Pittsburgh, enjoys a strong reputation as a wizard of downtown revitalization almost everywhere else. I imagine the Burgh Diaspora actively evangelizing their hometown’s dramatic transformation. But if anyone was listening, they didn’t move there on the advice of these expatriates.

    The demographics quietly improved. What little immigration there was tended to be highly educated. Furthermore, the numbers of college educated residing in Pittsburgh are becoming more concentrated. All the while the population continues to decline and that’s what makes the front page, which brings me back to positive publicity push leading up to the G-20.

    Pittsburgh is finally ready to take advantage of the spotlight. With the global economy in dire straits, hell with the lid blown off never looked better. The underlying numbers, such as unemployment, are relatively strong. Pittsburgh is a place of brain gain, not drain. When national growth returns, people will begin to move again. Pittsburgh will be one of the places they will consider.

    Thanks to the considerable influence of the Yinzerati, historic federal expenditures will rain down on the land of Three Rivers. Chris Briem can tell you how many Yinzers end up in Washington, DC. Or, ask the head coach of the Washington Redskins. The point is that even if you don’t know much about Pittsburgh, many people inside the beltway do. The G-20 is just the tip of the iceberg.

    *For the record, my Pittsburgh connection is through my wife who grew up in the North Hills.

    Read Jim Russell’s Rust Belt writings at Burgh Diaspora.

  • The Kid Issue

    Japan’s recent election, which overthrew the decades-long hegemony of the Liberal Democratic Party, was remarkable in its own right. But perhaps its most intriguing aspect was not the dawning of a new era but the emergence of the country’s low birthrate as a major political concern.

    Many Japanese recognize that their birth dearth contributes to the country’s long-standing economic torpor. The kid issue was prominent in the campaign of newly elected Democratic Party Prime Minister Yukio Hatoyama, who promised to increase the current $100 a month subsidy per child to $280 and make public high school free. The Liberal Democrats also proposed their own pro-natalist program with a scheme for free child day care.

    Japan’s predicament seems obvious. Its fertility rate has dropped by a third since 1975. By 2015 a full quarter of the population will be over 65. Generally inhospitable to immigrants, Japan could see its population drop from a current 127 million to 95 million by 2050, with as much as 40% of the population over 65 years of age. By then, no matter how innovative the workforce, Dai Nippon will simply be too old to compete.

    While Japan’s demographic crisis is an extreme case, many countries throughout East Asia and Europe share a similar predicament. Even with its energy riches, Russia’s low birth and high mortality rates suggest that its population will drop 30% by 2050 to less than one-third of that of the U.S. Even Prime Minister Vladimir Putin has spoken of “the serious threat of turning into a decaying nation.”

    Russia’s de facto tsar has cause for concern. Throughout history low fertility and socioeconomic decline have been inextricably linked, creating a vicious cycle that affected once-vibrant civilizations such as as ancient Rome and 17th-century Venice.

    Persistently low birthrates and sagging population growth inevitably undermine the growth capacity of an economy. Children provide a large consumer market and push their parents to work harder. By having children, parents also make a commitment to the future for themselves, their communities and their country.

    In contrast, a largely childless society produces other attitudes. It tends to place greater emphasis on leisure activities over work. It also shifts political pressure away from future growth and toward paying pensions for the aging. An aging society is likely to resist risky innovation or infrastructure investments meant to serve future generations.

    Of course, on a global level, lower birthrates should be seen as a positive. Population growth projections made around the time of The Population Bomb, Paul Ehrlich’s widely acclaimed 1968 Malthusian tract, which predicted global mass starvation, have turned out to be well off the mark. Global population growth rates of 2% in the 1960s have dropped to less than half that rate, and projections of the number of earth’s human residents in 2000 overshot the mark by over 200 million.

    This pattern is likely to continue: growth rates will drop further largely due to an unanticipated drop in birthrates in developing countries such as Mexico and Iran. These declines are in part the result of increased urbanization, the education of women and higher property prices. The world’s population, according to some estimates, could peak as early as 2050 and begin to fall by the end of the century.

    Yet in some places, like Japan, declining birthrates may already be too much of a good thing. The same is true elsewhere in East Asia, particularly in China, where the one-child policy has set the stage for a rapidly aging population by mid-century. Fertility is particularly low in highly crowded Asian cities like Tokyo, Shanghai, Tainjin, Beijing and Seoul.

    Over the past few decades a rapid workforce expansion fueled the rise of the so-called East Asian tigers, the great economic success story of the late 20th and early 21st centuries. But within the next four decades most of the developed countries in East Asia, as well as Europe, will become veritable old-age homes: A third or more of their populations will be over 65, compared with one in five in the U.S.

    Not that the U.S. doesn’t also have to cope with an aging population and lower population growth. But comparatively speaking it maintains a relatively youthful, dynamic demographic. Its fertility rate is about 50% higher than Russia’s, Germany’s or Japan’s and well above those of China, Italy, Singapore, Korea and virtually every country in the former eastern Europe.

    The reasons for this divergence with other advanced countries likely includes such things as continuing immigration, more land, larger houses, a strong aspirational culture and a higher degree of religious affiliation. Whatever the cause, a younger demography could lead to a relatively brighter future for America than is now commonly assumed.

    Additionally, in the next decade the U.S. will benefit from a millennial baby boomlet, as the children of the original boomers start having offspring. This next surge in population may be delayed if tough economic times continue, but over time it will translate into a growing workforce, sustained consumer spending and will likely spur a rash of new creative inputs.

    On the surface, these trends should help America to maintain a growing economy while its main competitors fade. By 2050 Europe’s economy could be half that of the U.S. But this is not inevitable. As in Japan, some leaders in European countries understand they cannot sustain prosperity with a steadily declining workforce.

    Many European countries are boosting benefits for families. In some, a pro-natalist policy is also being driven by concerns about the preservation of national cultures. In contrast to America, a country defined by immigration, most European countries – as well as Japan, China and Korea – have been far more resistant to outside influences.

    The rise of immigration in recent decades has led to growing European nativist movements. Many Europeans, including liberal ones, are less than sanguine about the long-term consequences of Muslim birth rates now three times higher than those of indigenous Europeans. If current trends continue, according to the Brookings Institution, the Muslim population of Europe could double by 2015 while the non-Muslims shrink by 3.5%. Without a sustained boost in baby-making among native Europeans, much of the continent may soon confront the prospect of an essentially Islamic future.

    But even so, attempts to foster a revival in European birthrates will face strong opposition from environmental activists who have amassed enormous influence. Some consider procreation of carbon-belching E.U. citizens as something close to anathema. In Great Britain, Jonathan Porritt, chair of the U.K.’s Sustainable Development Commission has advocates cutting the island’s population in half as a way to reduce global greenhouse gases.

    For their part, some America greens have expressed concern over our country’s relative fecundity. The president’s science adviser, John Holdren, a longtime protégé of Malthusian prophet Ehrlich, has in the past spoken about the need to limit families to two children. On the right, nativists also fear that too much of our new population will be of Asian or Hispanic descent.

    These pressures could lead to curbs on immigration, which would slow population growth. Other steps being considered by administration planners, such as cramming Americans into smaller houses in urban centers, would clearly discourage family formation. A persistently weak economy would do the same.

    Yet those favoring strong steps to curb population here first should think of the consequences. As the Japanese increasingly recognize, it’s better to experience some population growth than to become a giant nursing home. A somewhat youthful, gradually growing population certainly may create considerable environmental and social challenges, but a scenario of persistent decline and rapid aging seems far worse.

    This article originally appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His next book, The Next Hundred Million: America in 2050, will be published by Penguin Press early next year.

  • China’s Metropolitan Regions: Moving Toward High Income Status

    Changsha, Hunan (China): Over the past 30 years, China has eradicated more poverty than any nation in the world’s history. The reforms instituted by Deng Xiaopeng have not only created a large, new middle class in China, but have also produced some of the largest and architecturally most impressive urban areas in the world. There is still poverty in China, but the most extreme poverty is in the rural areas. The expansive shanty-town poverty found in Manila, Jakarta, Mexico City, Sao Paulo or Mumbai is absent in the large Chinese urban areas.

    While China as a nation is growing slowly, the same cannot be said of its urban areas. Perhaps the greatest migration in human history is underway, as rural residents move to the urban areas. United Nations population projections indicate that China will add 310 million people to its urban areas over the next 25 years, a figure equal to the population of the United States.

    Gross Domestic Product in Chinese Cities: China has seen its incomes and gross domestic product increase markedly. Urban economic growth has been even greater than that of the country as a whole. This article contains the latest available information on gross domestic product for the largest prefectural and provincial level cities in China, derived from annual yearbooks (see Table). It needs to be understood that “cities” are much different in China than anywhere else.

    The Differing Definitions of “City”: The most commonly used definition of a city in China is more akin to a large metropolitan region in the United States or Europe. Some cities, like Shanghai, Beijing, Tianjin and Chongqing are the equivalent of provinces, while other cities are “prefectural level,” administering large areas within provinces (Note 1). Each of these “cities” is comprised by smaller jurisdictions that go by at least 8 names, including city districts and “county level cities,” which are cities within the city, but not the main urban areas. Much of the land area in county level cities and even inside some city districts is rural rather than urban. As a result, analysts who should know better often make downright silly comparisons between Chinese cities and other cities in the world, simply because they do not understand the differing meaning of the term. Nearly all of China, urban and rural is broken into prefectural or provincial cities, just as nearly all of the United States is divided into counties.

    The large rural areas within the cities reduce the overall GDP per capita because incomes are generally so much lower outside the urban areas.

    Geographical Distribution of Wealth: China purposefully began its most significant reforms on the east coast, which is where much of the wealth of the nation is concentrated. All 25 of the most affluent metropolitan regions are on the east coast and 14 of the richest 20 metropolitan regions in China (measured by GDP per capita) are in the two river delta mega-regions, the Pearl and the Yangtze.

    The Pearl River Delta: China’s richest area is the Pearl River Delta, home of formerly British administered Hong Kong, Deng Xiaopeng’s megacity Shenzhen and historic Guangzhou (Canton). The area is one of the world’s great mega-regions, with a population of more than 50 million, in 8 virtually adjacent urban areas, tied together by a modern freeway system. Altogether the Pearl River Delta urban areas have more people than the world’s largest single urban area, Tokyo, and an overall higher density.

    Hong Kong, which remains outside the normal provincial governance structure, had the highest GDP per capita in the nation at $42,200 (purchasing power parity) in 2007, slightly more than 90 percent of the United States. Hong Kong and formerly Portuguese Macau have both achieved first world economic status, though Macau does not make the 1,000,000 urban area population threshold for inclusion on the present list.

    Shenzhen, on Hong Kong’s northern border ranks 4th in the nation at $22,100 and Guangzhou 5th, at $19,900. Two other Pearl River Delta metropolitan regions, Foshan, Zhuhai, have GDPs per capita greater than $15,000, which by some accounts qualifies them for entry into the high income world. The remaining large Pearl River Delta metropolitan regions, Dongguan, Zhongshan and Jiangmin each have GDPs per capita exceeding $10,000.

    The Yangtze River Delta: The Yangtze River Delta is another great mega-region, with more than 30 million people. It, however, covers much more land area than the Pearl River Delta and has much greater expanses of rural territory. The Yangtze River Delta metropolitan region of Suzhou, the city of canals, and neighbor of Shanghai, has the highest GDP per capita outside Hong Kong, at $25,500. One county level city within Suzhou, Kunshan has a GDP per capita of more than $28,000 (Note 2). Suzhou’s neighbor on the way to Nanjing, Wuxi, is next at $23,300. Shanghai, China’s largest metropolis, ranks 6th in GDP per capita at $18,400. Other Yangtze Delta metropolitan regions have GDPs per capita between $10,000 and $15,000, including Nanjing, Hangzhou, Changzhou and Ningbo.

    The Beijing Metropolitan Region: China’s third mega-region is around Beijing, the national capital. Altogether, this region has nearly 25 million people, but like the Yangtze River Delta, the Beijing megaregion has large swaths of rural territory. Beijing itself has a GDP per capita of $16,200, while Tianjin and Tangshan (site of the 1976 earthquake, one of history’s worst, which killed at least 250,000 people) have GDPs per capita of between $10,000 and $15,000.

    Outside the Megaregions: While the wealth is concentrated in the three large megaregions, prosperity has come to other metropolitan regions as well. One of Deng Xiaopeng’s original special economic zones, along with Shenzhen, was Xiamen, which is the richest metropolitan region outside the three large megaregions.

    Prosperity Comes to the West: The interior metropolitan regions are now well on their way to sharing the prosperity of the east. Changsha, from where I write, is now served by the nation’s “interstate” highway system in all directions. At the end of 2008, this system had expanded to 37,000 miles. Eventually, 53,000 miles are planned, which would make it longer than the present 46,000 mile US interstate system. This national expressway system is a pivotal factor in bringing prosperity to the interior. Now, trucks can reach Pacific Coast ports such as Guangzhou, Fuzhou or Hangzhou in six to nine hours of driving. This makes it possible for manufacturing businesses to locate in Changsha, Xi’an or Wuhan and a number of other metropolitan regions that are well inland.

    This should be of inestimable help as the nation seeks to decentralize its urban growth to the interior urban areas. Changsha, itself, has moved strongly into middle income status, with a GDP per capita closing in on $10,000. Moreover, local officials are planning for a near doubling of the current 2.5 million population in the next two decades. At least three major new towns under construction on the urban periphery and another will be built where the borders of three prefectural cities meet: Changsha, Zhuzhou and Xiangtan which is the birthplace of Chairman Mao Zedong (about 50 miles from Changsha, just off the Shangrui Expressway).

    Chongqing (formerly known in the west as Chungking), one of the four provincial level municipalities, has low GDP per capita of less than $5,000. However, this figure is skewed low by the fact that the urban area itself accounts for approximately one-sixth of the provincial city’s population, with the bulk of the population in the far lower income rural areas. Chongqing provides the ultimate evidence that cities in China are like nowhere else in the world. The “city” of Chongqing has a population of more than 30 million, in a land area the size of Austria or Indiana. The actual urban area, however, covers less area than the Indianapolis urban area and only 1.5 times the area of the Vienna urban area.

    Toward a High Income Nation: The urban areas of China still have poverty, but the commercial and residential development (both high rise and detached “villas”) make it clear that a great many people are doing “very well.”

    China is moving hard toward high-income world status. I specifically avoid the term “first world,” because metropolitan China already feels first world, regardless of its income status. However, should current growth rates continue relative to the high income world, metropolitan regions such as Suzhou and others could move into the list of the world’s 100 most affluent metropolitan areas within a decade. It cannot happen too soon.

    Note 1 : This includes sub-provincial level cities, which have jurisdiction over virtual prefectures within provinces, however have more administrative independence than prefectural level cities.

    Note 2: GDP per capita data is not widely available for divisions within prefecture and provincial level cities

    China Metropolitan (City) Regions Gross Domestic Product: 2007
    Provincial, Sub-Provincial & Prefectural Level Cities
    Purchasing Power Parity (US$)
    RANKED BY GDP/CAPITA GDP/Capita
    Rank Metropolitan (City) Regions ¥ (RMB) US$ PPP
    1 Hong Kong $42,200
    2 Suzhou, JS ¥91,900 $25,500
    3 Wuxi, JS ¥83,900 $23,300
    4 Shenzhen, GD ¥79,600 $22,100
    5 Guangzhou, GD ¥71,800 $19,900
    6 Shanghai, SHG ¥66,400 $18,400
    7 Zhuhai, GD ¥61,700 $17,100
    8 Foshan, GD ¥61,200 $17,000
    9 Beijing. BJ ¥58,200 $16,200
    10 Xiamen, FJ ¥56,200 $15,600
    11 Nanjing, JX ¥53,600 $14,900
    12 Changzhou, JS ¥52,800 $14,700
    13 Hangzhou, ZJ ¥52,600 $14,600
    14 Handan. HEB ¥51,900 $14,400
    15 Dalian, LN ¥51,600 $14,300
    16 Ningbo, ZJ ¥50,500 $14,000
    17 Zhongshan. GD ¥49,500 $13,700
    18 Tianjin. TJ ¥46,100 $12,800
    18 Dongguan. GD ¥46,000 $12,800
    20 Shenyang, LN ¥45,600 $12,600
    20 Qingdao. SD ¥45,400 $12,600
    22 Tangshan. HEB ¥44,700 $12,400
    23 Zibo, SD ¥43,500 $12,100
    24 Yantai, SD ¥41,300 $11,500
    25 Huizhou, GD ¥41,000 $11,400
    26 Baotau, NM ¥40,400 $11,200
    26 Shijiazhuang. HEB ¥40,300 $11,200
    28 Jinan, SD ¥39,300 $10,900
    29 Anshan, LN ¥38,400 $10,700
    30 Jiangmen, GD ¥37,800 $10,500
    31 Taiyuan. SAX ¥36,400 $10,100
    32 Wuhan. HUB ¥35,600 $9,900
    33 Hohhot, NM ¥34,900 $9,700
    34 Zhengzhou, HEN ¥34,100 $9,500
    35 Changsha. HUN ¥33,700 $9,400
    36 Urumqi, XJ ¥31,100 $8,600
    37 Nanchang, JX ¥30,500 $8,500
    38 Fuzhou, FJ ¥29,500 $8,200
    39 Changchun, JL ¥28,100 $7,800
    40 Hefei. AH ¥27,600 $7,700
    41 Wenzhou. ZJ ¥27,500 $7,600
    42 Baoding, HEB ¥27,100 $7,500
    43 Haikou, HA ¥26,700 $7,400
    43 Chengdu, SC ¥26,500 $7,400
    45 Lanzhou, GS ¥25,600 $7,100
    46 Luoyang. Hen ¥25,100 $7,000
    47 Harbin, HL ¥24,700 $6,800
    47 Fushun, LN ¥24,500 $6,800
    49 Jilin, JL ¥23,300 $6,500
    50 Xiangfan, HUB ¥22,500 $6,200
    51 Xi’an, SAA ¥21,300 $5,900
    52 Liuzhou, GX ¥20,700 $5,800
    53 Guiyang, GZ ¥19,500 $5,400
    54 Xuzhou, JS ¥19,200 $5,300
    55 Kunming, YN ¥18,800 $5,200
    56 Shantou, GD ¥17,000 $4,700
    57 Linyi, SD ¥16,300 $4,500
    58 Nanning, GX ¥15,800 $4,400
    59 Datong, SAX ¥15,600 $4,300
    59 Huiayn, JS ¥15,500 $4,300
    61 Chongqing, CQ ¥14,700 $4,100
    62 Qiqihar, HL ¥10,000 $2,800
    Sources: Annual statistical reports, generally from http://www.chinaknowledge.com
    GDP PPP calculated from 2007 International Monetary Fund data
    Caution: In some cases, GDP per capita may exclude temporary residents
    Includes all provincial, prefectural level and sub-provincial level cities and special economic regions on the mainland with a core urban area of more than 1,000,000 population (see http://www.demographia.com/db-worldua.pdf).
    Note: Cities in China are substantially different in definition than in other nations. See: http://www.demographia.com/db-define.pdf.
    Provincial abbreviations at db-china-abbr.pdf

    Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris. He was born in Los Angeles and was appointed to three terms on the Los Angeles County Transportation Commission by Mayor Tom Bradley. He is the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.”