New Geography

Category: Demographics

  • Biggest Boomer Towns

    The boomer generation, spawned (literally) in the aftermath of the Second World War, will continue to shape the American landscape well into the 21st Century. They may be getting older, but these folks are still maintaining their power. Those born in the first ten years of the boomer generation  — between 1945 and 1955 — number 36 million, and they will continue to influence communities and real estate markets across the country, especially as they contemplate life after kids and retirement.

    Much has been written about where “empty nesters” might move as their children move off on their own. One longstanding favorite is the notion that, having jettisoned their children, the boomers will also desert their suburban communities for the bright city lights.

    Unfortunately for developers — some of whom have invested heavily in high-end housing for urbanizing “empty nesters” — the actual data do not support this thesis. Indeed, our analysis of migration by this cohort in the past 10 years shows a 10.3% decline among core city dwellers, a loss of some 1.3 million people over the past decade. For this analysis, Forbes, with the help of demographer Wendell Cox, looked at population numbers from the Census for boomers aged 45 to 54 in 2000 and compared them with the numbers for those ages 55 to 64 in 2010.

    These population changes include reductions due principally to deaths. Census data do not include mortality information. This cohort lost 3.2% of its population over the 10 years. This would only marginally reduce the changes between 2000 and 2010, while the scale of differences between the metropolitan areas would be identical.

    So where are these surviving boomers settling as they enter their likely extended golden years?  The results may surprise urban boosters who have confidently expected them to flock downtown.

    To be sure, a few of the highly affluent — the ones mentioned in the mainstream media — may purchase homes, or pied-à-terres, in places like Manhattan, Chicago’s Gold Coast or San Francisco. But these areas actually have suffered an exodus of boomers over the past decade. In our ranking of the 51 largest metros in the U.S., the urban cores of San Jose, San Francisco, Los Angeles and Chicago scored near the bottom, suffering double-digit percentage losses of boomers. According to the last Census, New York’s urban core, which the Daily News suggested is packed with aspiring seniors, lost 12% of boomers in their mid-50s to mid-60s  — or about 274,000 people.

    Over the past three years  you could blame this loss on the economy, which has postponed retirements brought home many of the boomers’ young, largely unemployed or underemployed children back to the suburban homestead. Or you can credit it to more active lifestyles among boomers who appear to working later than ever. According to a Careerbuilder.com survey, over 60% of workers over 60 indicated they are postponing retirement.

    Yet perhaps something more profound is at work here. An analysis of those who were 55 to 65 in 2000 and 65 to 75 in 2010 reveals an even stronger anti-urban bias, with an over 12% drop in city dwellers. Since these folks are far less likely to have kids at home and more properly retired, this cohort’s behavior suggests that aging boomers are if anything less likely to move to the cities in the next decade.

    Indeed, if boomers do move, notes Sandi Rosenbloom, a noted expert on retirement trends and professor of Planning and Civil Engineering at the University of Arizona, they tend to move to less dense and more affordable regions. The top cities for aging boomers largely parallel those that appealed to the “young and restless” in our earlier survey. The top ten on our list are all affordable, generally low-density Sun Belt metros:

    1. Las Vegas, Nev.
    2. Phoenix, Ariz.
    3. Tampa-St. Petersburg, Fla.
    4. Orlando, Fla.
    5. Riverside-San Bernardino, Calif.
    6. Raleigh, N.C.
    7. Austin, Texas
    8. San Antonio, Texas
    9. Jacksonville, Fla.
    10. Charlotte, N.C.-S.C.

    But according Sandi Rosenbloom, a noted expert on retirement trends and a professor of planning and civil engineering at the University of Arizona, most boomers are staying put, largely in the suburbs they settled in decades ago.  The propensity to move, she points out, starts to drop precipitously as people leave their early 30s. Roughly 1 in 3 people in their 20s move in a given year; by the time they enter their 40s, that figure slides to about 1 in 10. As people age into their 50s and beyond, the percentage drops to roughly 5%, or 1 in 20.

    “The boomers are staying put more than anyone thought,” Rosenbloom says. “People of that generation tend to own their own homes and stay there. The idea that they are moving to the city really comes from the wishful thinking school of planning.”

    The recession has exacerbated this stay-at-home trend. The number of people moving is at its lowest level since the early 1960s. When boomers do decide to move, Rosenbloom notes, they do so largely for prosaic reasons, such as being closer to children or, more important, grandchildren.

    Others succumb to the temptation to cash out expensive housing in metros like New York, Los Angeles, the Bay Area or Boston for less costly residences in Sun Belt locales. Housing in and around these core cities, particularly in attractive neighborhoods, Rosenbloom adds, are simply too expensive for the vast majority of budget-conscious seniors.

    Much of this also has to do with the lifestyle preferences of both boomers and seniors, which appear far different than those put forth by urban pundits. People over 55 that Rosenbloom has interviewed usually express a preference to stay or relocate in places that are less crowded and congested. Furthermore, most are reluctant to give up their cars, and many are less able to walk than drive. This may explain why most retirement communities end up on the urban fringe or farther.

    This trend — which Rosenbloom has also encountered in the U.K., Australia, Canada and New Zealand — is also reflected by the growing shift to smaller towns and cities among both aging boomers and seniors. The “young and restless” may head to suburbs, particularly in the lower-cost Sun Belt cities, but some older Americans appear headed to even less densely populated regions. Over the past decade over 1 million aging boomers and seniors moved to more smaller cities and rural locations from suburban or urban locations.

    What do these trends suggest for the future of our communities and real estate? For one, the big opportunities for selling to aging boomers will remain primarily in the suburbs and some select more rural locations. We also can expect the new senior citizens to move to more affordable places close to their children.

    These findings do provide some long-term hope for the housing market, particularly in suburbs. Leading demographers have been busy predicting a massive drop-off in single-family homes as boomers retire and their children leave. Yet our analysis on the Census reveals that most boomers — as well as those older than them — are staying in the suburbs a lot longer than expected. Many will likely to stay in their homes and old neighborhoods well into their 70s or even 80s, leaving either their home either in an ambulance or to an assisted living facility.

    Developers and planners anxious to service aging boomers should, instead of building downtown towers, address the needs of this generation precisely where they now live and are likely to stay. This could include adding to new residential options in the suburbs to enlivening local shopping districts while boosting senior services in everything from recreation and public safety to health care. As the rock and roll generation heads toward its dotage, both business and communities need to adjust their strategies based not on fantasies but on the realities so clearly evidenced by the Census.

    This piece 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, and an adjunct fellow of the Legatum Institute in London. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

  • Queensland’s Future: Diverse and Dispersed

    I was recently asked to outline my thoughts on how the Queensland urban landscape might look 40 to 50 years from now.  Go on, you can laugh.  I did too.  It’s hard enough to forecast the next 12 months, let alone two generations away, but I’ve given it a go, of sorts, so here it is:

    First though, it might be best to outline my methodology.  In short, this forecast will be based on underlying trends, some understanding of human nature, and importantly, the Australian mindset.  My outlook is supported by evidence – what people actually do rather than say – and importantly, not by urban myths or fallacies, despite the frequency with which they have been aired of late.  Unfortunately, we don’t have the space or the time here to support every claim or go into massive detail; so this discussion is confined to broad shapes – not nitty gritty.

    Queensland’s urban future (and that of Australia) can best be summed up in two words – Diverse and Dispersed.

    Let’s deal with the second D – dispersion – first.  Our regional centres are likely to become a whole lot bigger and at the expense of the already crowded south-east corner of the state.  The move away from the world’s bigger cities is already underway, as evidenced in the recent census in the United States, but also throughout much of Europe.  Several Asian and Middle-eastern countries are now also following suite  As a Mckinsey Institute study recently found, smaller cities, particularly in the developing world, are growing considerably faster than the much discussed megacities.

    The annual ABS small-area population data suggests this trend is also very true in Australia and particularly in Queensland, which, over the past decade, been the fastest growing state on the continent, appears to be following the same trend, something likely to be borne out by 2011 Census, due later this year .

    Within our capital cities themselves, the much ballyhooed move downtown will slow – again, it already is doing so – as the cost to live within close proximity to the CBD is just too high compared to the real benefits. 

    The irrational assertions about the trend towards denser living rest on urban myths that promote inner city density over other housing forms. These include the notion that suburban growth worsens carbon emissions and traffic congestion; people are being forced to live far from jobs concentrated in our CBDs and denser development will make it cheaper for them to get to work. These notions are all largely exaggerated or incorrect. More to the point, they stand in opposition to the basic preferences of the market.  

    Instead of having a single high-density city core, with lower development density radiating outwards, the most likely urban shape in the future will be one of more even distribution of housing density throughout the city; concentrated more, no doubt, around middle-ring transport hubs and new master planned town-centres.  Our middle-ring and outer suburbs will have much more compact urban settings but will remain primarily dominated by relatively low density housing.

    Diversity relates to the housing stock itself.  The current push towards smaller dwellings has little to do with demographics and the market’s wants, but reflects basic reaction to diminished housing affordability.   There is a demand for tightly-sized product, but it is nowhere as near as high, nor is the long-term trend towards such as strong, as the urban boosters advocate.

    Taking a wider view, Australia (and America too) is still in its frontier or "barbaric" stage of its cultural evolution.  We walk with wide gaits, worship most things large from roadside bananas to women’s appendages, and don’t really like crowded spaces or queues Most of us like our space; aren’t really ready to give it up, and are not likely to do so for many decades to come.

    Rather than remaining focused on density and concentration, it could well serve the community to focus on what appeals to the vast majority of the population, particularly the middle and working class families.  A more practical approach might be to foster the development of smaller, more efficient cities, as well as expansive suburbs and revived small towns rather than engage in a manic drive towards persistent centralization. 

    Rather a forced density agenda on a largely unwilling population, it makes sense to consider how to make a more dispersed (and diverse) urban future more workable and sustainable. Innovations in work environments, notably increased use of telecommuting and dispersed workplaces, and more fuel efficient cars hold more promise than plans that force Aussies to live a way the vast majority do not prefer.

    This article originally appeared in the June/July 2011 edition of the UDIA Queensland’s Urban Developer Magazine.

    Michael Matusik is a qualified town planner and director of independent residential development advisory firm, Matusik Property Insights.

    Photo by Michael Zimmer.

  • The Evolving Urban Form: Los Angeles

    Los Angeles has grown more than any major metropolitan region in the high income world except for Tokyo since the beginning of the twentieth century, and also since 1950.  In 1900, the city (municipality, see Note) of Los Angeles had little over 100,000 people and ranked 36th in population in the nation behind Allegheny, Pennsylvania (which has since merged with Pittsburgh) and St. Joseph Missouri (which has since lost more than one quarter of its population).

    As people moved West in the intervening decades and especially after World War II, the Los Angeles area exploded in population. By 1960, the Los Angeles metropolitan area, which was then and is now composed of Los Angeles and Orange counties, had passed Chicago to become second in population only to the New York metropolitan area. It was to take considerably longer for the city of Los Angeles to pass the city of Chicago as the nation’s second largest municipality, though this occurred by the 1990 census.

    The Los Angeles combined statistical area (analogous to the former consolidated metropolitan statistical area) is made up of three metropolitan areas, Los Angeles, Riverside – San Bernardino and Oxnard (Ventura County). This combined area covers 35,000 square miles or more than 90,000 square kilometers. This is a land area nearly as large as that of Hungary and larger than Austria. The overwhelming share of the CSA is rural, with less than 10 percent of the land area developed.

    Growth from 1900: The CSA had only 250,000 people in 1900, though grew to nearly 5,000,000 in 1950. By 2010, the population was nearing 18 million, a figure not much less than that of Australia, at 22 million (Table 1). Indeed until 1990 the Los Angeles CSA population was closing in on Australia. However, since that time population growth in the Los Angeles area has slowed considerably and Australia should remain larger.

    Table 1
    Los Angeles Combined Statistical Area: Population (CSA): 1900-2010
    Year City of Los Angeles Balance: LA County  Los Angeles County   Orange County   Riverside County   San Bernardino County   Ventura County   Total 
    1900        102,479                   67,819         170,298           19,696         17,897            27,929         14,367         250,187
    1910        319,198                 184,933         504,131           34,436         34,696            56,706         18,347         648,316
    1920        576,673                 359,782         936,455           61,375         50,297            73,401         28,724     1,150,252
    1930    1,238,048                 970,444      2,208,492         118,674         81,024         133,900         54,976     2,597,066
    1940    1,504,277              1,281,366      2,785,643         130,760       105,524         161,108         69,685     3,252,720
    1950    1,970,358              2,181,329      4,151,687         216,224       170,046         281,642       114,647     4,934,246
    1960    2,479,015              3,559,756      6,038,771         703,925       306,191         503,591       199,138     7,751,616
    1970    2,816,061              4,216,014      7,032,075     1,420,386       459,074         684,072       376,430     9,972,037
    1980    2,966,850              4,510,653      7,477,503     1,932,709       663,166         895,016       529,174   11,497,568
    1990    3,485,398              5,377,766      8,863,164     2,410,556    1,170,413      1,418,380       669,016   14,531,529
    2000    3,694,820              5,824,518      9,519,338     2,846,289    1,545,387      1,709,434       753,197   16,373,645
    2010    3,792,621              6,025,984      9,818,605     3,010,232    2,189,641      2,035,210       823,318   17,877,006
    Consolidated statistical area as defined by OMB as of 2010

    The city of Los Angeles had grown 88 percent from 1950 to 2000, but over the past decade added only three percent to its population. Even more spectacular declines in growth occurred in the rest of the CSA. For example, Orange County had grown 1200 percent between 1950 and 2000 yet grew only six percent in the last decade.

    Growth: 2000 to 2010: The population growth in the Los Angeles CSA was widely dispersed and away from the core. The central area (urban core) of the city Los Angeles extends from the Santa Monica Mountains to South Los Angeles and from the boundaries of Beverly Hills, West Hollywood and Culver City to East Los Angeles grew only 0.7 percent. Uniquely, the central area densified strongly between 1960 and 2000, while other urban cores nearly all declined in population, whether in the United States or Western Europe. Much of this was due to strong immigration from Mexico, other parts of Latin America, as well as Asia.

    The inner suburban ring, which includes the balance of Los Angeles County south of the Santa Susana and San Gabriel Mountains as well as the older northwestern Orange County suburbs grew by 1.5 percent. Within this area, 32 inner suburbs (all in Los Angeles County) grew from 1.766 million to 1.767 million (0.1 percent) from 2000 to 2010 (Note 2).

    The outer suburbs, which include the balance of Orange County (including the Mission Viejo urban area) and the western portions of Riverside and San Bernardino counties (including the Riverside – San Bernardino urban area) grew 19 percent.

    The exurban areas, which include areas outside the core urban areas of Los Angeles, Riverside-San Bernardino and Mission Viejo grew 30 percent. The hot spots included Ventura County, the Santa Clarita Valley, the Antelope Valley, the Victorville-Hesperia area, the Coachella Valley (Indio-Palm Springs), the Hemet area and the Temecula-Murrieta area. An argument could be made that Temecula-Murrieta would be in the San Diego metropolitan area if metropolitan areas were defined by smaller area units, such as municipalities (as in Canada) or census tracts. The exurban areas are more attractive to residents at least in part because of considerably less expensive housing and their greater availability of detached houses than in the three core urban areas.

    More remote areas of the desert extending to the Nevada and Arizona borders added 42 percent to their population (Table 2, Figure 1 and 2).

    Table 2
    Los Angeles CSA: Population by Sector: 2000-2010
    Sector 2000 2010 Change % Change
    Central Los Angeles          1,752,024              1,763,967         11,943 0.7%
    Inner Ring          9,093,756              9,231,513       137,757 1.5%
    Outer Suburbs          3,053,615              3,630,273       576,658 18.9%
    Exurbs          2,173,459              2,822,884       649,425 29.9%
    Remote             301,331                 428,369       127,038 42.2%
    Total       16,374,185            17,877,006    1,502,821 9.2%

    City of Los Angeles: The dispersion of population was also evident in the city of Los Angeles. For decades, the city of Los Angeles has grown strongly. Approximately one-quarter of this growth since 1960 has been the densifying central area, as noted above.

    However, little noted is the fact that most of the city’s growth was greenfield suburban in nature, built at low and moderate densities and largely car-oriented. For most of the past fifty years the growth has been “over the hill” in the San Fernando Valley, a formerly rural area which was annexed by the city before 1930. Between 1950 and 2010, the population of the San Fernando Valley grew from 300,000 to 1,400,000. Thus, the Valley grew like virtually every fast-growing historical core city in the nation that has grown since 1950, by filling up empty land (Figure 3).

    Much has been written about the “Manhattanization” of the Los Angeles core. However, with only 13 towers more than 550 feet, downtown Los Angeles is no threat to Manhattan, with more than 125, or even Chicago with more than 70. Further, job growth is stagnant, with virtually no change in private sector employment over the last decade, despite substantial government subsidies.

    Between 2000 and 2010, the central area grew at its slowest rate since the 1950s, growing by only 0.7 percent to its population, growing only 12,000 (to 1,764,000) or barely 12 percent of the city’s growth. Nonetheless, and contrary to the reputation of Los Angeles, the central area is very densely populated, at approximately 14,000 people per square mile, with the highest density census tracts having more than 90,000 residents per square mile. Among the nation’s largest municipalities, only New York and San Francisco are denser than central Los Angeles.

    The big story in growth was on periphery. The San Fernando Valley captured 70 percent of the city’s growth in the 2000s, with considerable greenfield expansion in the hills north of Chatsworth and Northridge. Even so, the Valley’s growth was only five percent. The western portion of the city, which extends from the Santa Monica Mountains to Los Angeles International Airport, grew three percent and accounted for 13 percent of the city’s growth. The Harbor area added two percent to its population and accounted for five percent of the city’s growth (Figure 4).

    The Future: Growth or Stagnation? After more than a century of spectacular growth, Los Angeles demographic juggernaut is stagnating and could conceivably go in reverse due to declining immigration, an exodus of middle class and working class families.  Indeed Even the strong growth in the outer suburbs and exurbs was not sufficient to drag the regional population increase (9 percent) up to the national rate of 10 percent between 2000 and 2010.

    The immediate prognosis should be for even slower growth. The financial, regulatory and cost of living disadvantages of California are widely recognized by households and businesses alike. With stronger regulations in the offing, such as the stronger land use restrictions likely to occur as a result of Senate Bill 375, any future growth on the periphery could be dampened. Even with multi-billion support in terms of tax breaks and public investment, the central core seems unlikely to come close to making much of a real difference, at least beyond the media.  Los Angeles may not be on the road to Rust Belt stagnation, but the dynamism of the last century is no more.

    ——

    Note 1: In this article, the term "city" means municipality.

    Note 2: This includes municipalities and census designated places nearest the central area of the city of Los Angeles, from Glendale and Pasadena through Monterey Park to South Gate, Compton and Gardena and to the west of the central area.

    Note 3: Biographical Note: The author was born in the Echo Park district, near downtown Los Angeles.

    Photograph: Downtown Los Angeles from Echo Park (by author)

    Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life”

  • The Shifting Geography of Black America

    Black population changes in various cities have been one of the few pieces of the latest Census to receive significant media coverage.  The New York Times, for example, noted that many blacks have returned to the South nationally and particularly from New York City.  The overall narrative has been one of a “reverse Great Migration.”  But while many northern cities did see anemic growth or even losses in black population, and many southern cities saw their black population surge, the real story actually extends well beyond the notion of a monolithic return to the South.

    The map below, showing total growth in Black Only population from 2000 to 2010, indeed shows that northern and west coast cities had low or even negative growth while various southern cities boomed.


    Here is a list of the top ten metro areas (among those with more than a million total people) for black population growth:


    And here are the bottom ten (among those with more than one million people):


    Of course, looking at total population numbers can mislead. Some cities grew slowly or lost people as a whole while others boomed. With Houston, Dallas, and Atlanta all adding over a million people each, it’s no surprise these regions added lots of blacks. Working and middle class African-Americans likely shared many of the same motivations to move to these cities – such as lower housing prices – as Americans of other ethnicities. In that light, a look at change in black population share (the percentage of the population that is black) provides additional perspective:


    Here we see not a single-minded return to the South, but a complex mixture of shrinking and growing regions in various parts of the country.  This includes some surprising places, like Minneapolis-St. Paul, which was one of the top ten metros in the country for total black population growth, and also saw its black population share grow strongly.  Now the Twin Cities, along with Columbus, Ohio, another strong performer, are two of the top destination for African immigrants from Somalia and elsewhere, which doubtless accounts for part of that strong growth. But anecdotal reports indicate that they are also benefitting from Chicago’s expanding black diaspora, along with places like Indianapolis and various Downstate metros.

    Atlanta, well known as America’s premier metro area for blacks, continued to dominate the charts. Not only far and away the leader in adding raw numbers of blacks, the African-American share also grew share strongly too. Charlotte is also clearly emerging as another key black population hub, ranking #6 in America for total black population growth, which is impressive for a smaller city, and adding nearly two percentage points in black population share.  It grew its black population much faster than other fast growing small cities like Raleigh or Nashville, and added share at more than three times as fast.

    By contrast, Houston, which grew total black population significantly, had a much lower share gain. Austin, one of America’s fastest growing metros, added only 28,000 blacks and actually lost black population share. And Washington, DC, despite being a traditional black population and cultural hub, also lost black population share regionally as gentrification in the District resulted in its loss of its black majority for the first time in decades, according to the Brookings Institution. 

    So even among rapidly growing metro areas in the South, the appeal to black population is selective, favoring places like Atlanta, Charlotte, Florida cities, and even slower growing cities along the length of the Mississippi River like Memphis.  Even some cities in the North are retaining their allure to blacks as well. Less favored or even out of favor are metros like DC, Dallas, and Houston as well as cities such as Charleston and Savannah along the southeast coast.

    Slow or negative black population growth is particularly concentrated in traditional tier one “global cities”, as well as those facing economic or other hardship like Detroit, Cleveland, and immediate post-Katrina New Orleans.

    The latter may be understandable – whites have been leaving these regions as well – but the former is quite troubling.  The global city model, focused on high end and creative services, is supposedly the bright and shining savior of American urbanism. Indeed, it’s hard to find a city that doesn’t have some aspect of that as a core plank in its civic strategy. Yet the cities that have been most focused at promoting this notion – such as New York, San Francisco, and Chicago – are generally those  disproportionately driving blacks away. The reasons for this aren’t clear, but the high and increasing cost of living in those places seems like one logical explanation.

    Here’s a more detailed look at the percentage growth in Black Only population in some tier one global type metros:


    New York barely broke even on black population, while Chicago, LA, and the Bay Area all actually lost black residents, a stunning reversal from their past as black magnets. However, Boston, not a traditional black population hub, grew its black population strongly on a percentage basis, as did Miami and DC, though as noted before, the share change in DC was negative.  Here is that metric for the same metros:


    With the notable exceptions of Boston and Miami – and Philadelphia, seldom ranked highly as a global city but still a traditional large northern metropolis – most global city regions appear to be increasingly inhospitable to Blacks.  Thus their model of success, whatever its appeal to some, at a basic level simply lacks inclusiveness. This shows its clear limits as an overall model for America’s urban centers as a whole.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile. Data analysis, maps, and charts in this piece were prepared with Telestrian.

  • A Detailed Look at Workforce Skill Shortages

    As the United States continues to fight its way out of the Great Recession, more attention has been directed to the question of why is has taken so long for workers to find re-employment. In economist parlance, this is primarily a question of “structural unemployment.” This describes the type of unemployment that results from a mismatch of worker skills and the skills demanded by employers.

    As of April 2011, there were 13.2 million unemployed workers and 2.9 million unfilled job openings. In other words, April’s bulky 8.7% unemployment rate could have been lowered one percentage point (to 7.7%) if just half of the advertised job vacancies were filled by unemployed workers. Obviously, it is not realistic for every position to be filled immediately—it takes time for employers to find the right workers, and vice versa. But the odd pairing of high unemployment and high job vacancies illustrates a structural employment issue, which may have worsened in recent years.

    Historically, when the economy is growing, the unemployment rate is relatively low and the job vacancy rate is relatively high, indicating more job openings than there are workers to fill those positions. Likewise, when the economy is shrinking, the unemployment rate is relatively high and the vacancy rate is relatively low, because there are more workers looking for work than there are jobs. This pattern held between 2008 and mid-2009 but from the second half of 2009 through mid-2011, the vacancy rate has remained surprisingly high when compared to the unemployment rate. 1

    A question that has perplexed jobseekers and economists alike is how there can be so many people looking for work and yet so many unfilled positions in the economy? In an attempt to answer this question, EMSI has taken a fresh look at the skill gap issue using historic jobs and earnings data to determine which segments of the labor market are growing and which are diminishing. Often when examining shifts in the labor market, analysts will look solely at employment changes and highlight the occupations that have increased or declined in total employment, but we believe this is somewhat shortsighted. This method may not tell the whole story. For example, it is possible for employer demand for a certain occupation to increase or remain the same while actual employment levels drop. 2  Therefore, the addition of the earnings measurement over time adds a great deal to this analysis.

    In order to describe this method, a bit of basic economic theory needs to be explained. One of the chief tenants of economics is that in a market that is not exceedingly manipulated by outside forces, demand and supply will meet at a point that is mutually beneficial for both producers and consumers. To put this in labor market economics terms, producers are individuals offering their time and labor for a wage, and consumers are employers seeking the labor of workers in exchange for a wage. The magical meeting place where both groups settle is called “market equilibrium.” Although both parties may not be completely satisfied with the arrangement, they are at least content enough to accept the terms of employment.

    Aggregating the data shows that of all occupations in the potential skills shortages category, 66% are in the fields of healthcare; education; business and finance; and architecture and engineering. Conversely, of all occupations in the potential surpluses category, 63% are in the fields of production; construction and extraction; and installation, maintenance and repair.

    Following this theory, we can expect that any given occupational category (SOC code) will have a wage and employment level that best represents the demand for workers, and the required compensation level for employees. 3 To complicate matters, the economy is never stationary but is in a continuous state of adjustment and realignment. Although the market for certain workers may be at equilibrium in the fourth quarter of one year, changes influencing supply and demand will likely cause that equilibrium to shift such that the equilibrium will be different in the first quarter of the following year. (Think of the demand for commercial fishermen in the Gulf Coast before and after Hurricane Katrina in 2005).

    Based on these theories, EMSI has dug into historic labor market data to look for two characteristic groups:

    1. Potential skill shortages: where employer demand had pushed both employment and earnings upward over time
    2. Potential skill surpluses: where worker availability has exceeded demand and pushed both employment and earnings down over time

    The key word in both of these categories is “potential.” These shortage/surplus measurements are, in fact, only half of the equation. A “skill shortage” only exists if workers have failed to acquire the requisite skills to perform the required tasks at a rate equal to demand. Likewise, a “skill surplus” exists only if workers have failed to retrain and find employment elsewhere after losing their jobs. Both of these measurements are difficult to pin down. In the next post, we will examine whether the potential shortage/surplus occupations have received the requisite amount of workers over the past couple of years, but for the moment it will suffice to examine these increases and decreases in demand over time.

    To perform this analysis, EMSI analyzed 661 SOC codes in terms of jobs and earnings between 1999 and 2010. In order to get the data to line up properly, self-employed workers and every SOC code that ends with “all other” have been excluded. An occupation appears in the potential shortage category if the wage and employment growth between 1999 and 2010 have exceeded the average by a significant degree; and an occupation classifies in the surpluses category if both wages and employment have decreased by a significant degree. 4

    Tables 1 and 2 show the results of this analysis. These tables are ranked by employment in 2010 to provide some gauge of the significance of the potential shortage or surplus. Percent change in employment and percent change in earnings are also shown in these tables.

    Table 1: Top 25 Occupations Facing Potential Skill Shortages

    SOC Description 2010 Employment 1999-2010 Employment % Change 1999-2010 Median Wages % Change
    29-1111 Registered Nurses 2,655,020 20% 17%
    13-2011 Accountants and Auditors 1,072,490 27% 18%
    13-1111 Management Analysts 536,310 78% 11%
    41-4011 Sales Representatives, Wholesale and Manufacturing, Technical and Scientific Products 381,080 11% 23%
    13-2072 Loan Officers 283,330 42% 11%
    11-9111 Medical and Health Services Managers 282,990 23% 20%
    13-1023 Purchasing Agents, Except Wholesale, Retail, and Farm Products 272,370 22% 9%
    29-1051 Pharmacists 268,030 18% 27%
    13-1031 Claims Adjusters, Examiners, and Investigators 262,540 70% 15%
    17-2051 Civil Engineers 249,120 19% 10%
    17-2141 Mechanical Engineers 234,400 16% 7%
    13-2051 Financial Analysts 220,810 55% 15%
    13-1041 Compliance Officers 204,000 65% 16%
    29-2021 Dental Hygienists 177,520 97% 10%
    29-2011 Medical and Clinical Laboratory Technologists 164,430 13% 11%
    25-1071 Health Specialties Teachers, Postsecondary 144,780 101% 6%
    25-2043 Special Education Teachers, Secondary School 141,420 18% 11%
    17-2072 Electronics Engineers, Except Computer 133,660 25% 11%
    11-9151 Social and Community Service Managers 116,480 32% 20%
    29-1127 Speech-Language Pathologists 112,530 31% 12%
    33-3021 Detectives and Criminal Investigators 110,640 33% 14%
    11-9033 Education Administrators, Postsecondary 110,360 15% 16%
    29-1126 Respiratory Therapists 109,270 36% 15%
    25-2042 Special Education Teachers, Middle School 100,510 16% 20%
    29-1122 Occupational Therapists 100,300 27% 12%

    Table 2: Top 25 Occupations Facing Potential Skill Surpluses

    SOC Description 2010 Employment 1999-2010 Employment % Change 1999-2010 Median Wages % Change
    43-5081 Stock Clerks and Order Fillers 1,795,970 0% -6%
    53-3032 Heavy and Tractor-Trailer Truck Drivers 1,466,740 -6% -6%
    47-2031 Carpenters 620,410 -20% -5%
    53-7051 Industrial Truck and Tractor Operators 518,350 -12% -5%
    47-2111 Electricians 514,760 -16% -7%
    53-3031 Driver/Sales Workers 371,670 -4% -15%
    41-9041 Telemarketers 288,760 -41% -8%
    43-9041 Insurance Claims and Policy Processing Clerks 231,570 -14% -8%
    47-2051 Cement Masons and Concrete Finishers 140,950 -7% -5%
    49-3021 Automotive Body and Related Repairers 129,730 -28% -7%
    51-3021 Butchers and Meat Cutters 125,910 -9% -6%
    49-2011 Computer, Automated Teller, and Office Machine Repairers 110,320 -15% -4%
    51-3023 Slaughterers and Meat Packers 88,500 -24% -6%
    47-2081 Drywall and Ceiling Tile Installers 82,320 -30% -11%
    47-2021 Brickmasons and Blockmasons 68,520 -30% -11%
    51-4111 Tool and Die Makers 66,530 -50% -7%
    43-5111 Weighers, Measurers, Checkers, and Samplers, Recordkeeping 66,480 -21% -9%
    19-4031 Chemical Technicians 59,440 -25% -6%
    47-2221 Structural Iron and Steel Workers 58,460 -32% -5%
    13-2082 Tax Preparers 56,990 -2% -13%
    27-2011 Actors 54,740 -35% -22%
    51-4034 Lathe and Turning Machine Tool Setters, Operators, and Tenders, Metal and Plastic 40,970 -51% -7%
    49-9044 Millwrights 36,670 -54% -5%
    51-3093 Food Cooking Machine Operators and Tenders 32,220 -27% -13%
    27-1021 Commercial and Industrial Designers 28,670 -25% -3%

    Analysis

    So what can be gleaned from this analysis? To start at the highest level, this certainly indicates employers’ preferences are shifting away from manual labor occupations and toward knowledge-based occupations. Aggregating the data shows that of all occupations in the potential skills shortages category, 66% are in the fields of healthcare; education; business and finance; and architecture and engineering. Conversely, of all occupations in the potential surpluses category, 63% are in the fields of production; construction and extraction; and installation, maintenance and repair.

    Potential Shortages

    To examine some more specific cases, it is interesting that two of the occupations regularly at the center of skill-shortage discussions, registered nurses and accountants, are at the top of this list. (We must emphasize again that this does not indicate that there is a skills shortage for these occupations but rather that the demand for such workers has increased at a rapid rate over the past 11 years; whether or not the output of students has remained apace with this demand will be explored in the next piece.) It is also not surprising that 10 other healthcare positions land on this list, including occupations such as medical managers, pharmacists, and speech-language pathologists.

    There are also some surprises on this list, such as the contingent of occupations in the business and financial operations category (e.g., loan officers, claims adjusters, and financial analysts). The prevailing theme with these occupations is that each requires individuals with strong interpersonal skills, as well as strong computational and analytical skills. Over the past decade, both the increase in the rate of information sharing and increased complexity of this information can likely explain why employers have been investing higher wages in these workers.

    Management analysts, for example, experienced a wage increase of 11% and employment increase of 78% over the past decade. Their presence on this list highlights the importance of technology in creating job change, as well as changes in business trends. In the past decade, businesses in the professional and technical services sectors have been increasingly hiring businesses and consultants from outside of their own companies to handle departmental work such as advertising, payroll, and human resources. We can account this change, in large part, to the power of technology to move information quickly and efficiently.

    Potential Surpluses

    Many occupations in the manufacturing category have declined sharply in both wages and employment due to offshoring. On this point, we must specifically state that manufacturing skills are not declining on the global scale. Looking worldwide, there are likely more individuals working as industrial truck and tractor operators and tool and die makers in 2010 than there were in 1999, but today many of these positions are now in developing countries. These reflect situations where without the effect of protectionist policies (such as quotas or tariffs) foreign competition has a competitive advantage over American workers because foreign workers are willing to work for lower wages.

    Offshoring is not the only reason that occupations on this list have declined. Just as with the potential surpluses list, technology is the catalyst for many notable changes. Occupations such as stock clerks and order fillers have become less valued in the labor market due to labor-saving technology that efficiently catalogs inventory and computer programs that allow people to make orders for equipment and merchandise without the aid of a middle-man. Likewise, positions such as telephone operators and desktop publishers are quickly becoming obsolete due to advancements that have made telecommunications more accessible for a wider audience.

    The large cohort of construction jobs on this list are a consequence of the precipitous drop in construction employment between 2007 and 2010, and these may or may not represent an actual skill surplus. For example, employment for carpenters had increased every year between 1999 and 2007, but between 2008 and 2010 employment decreased by an average of 14% per year; indicating that this may represent a temporary, or cyclical change. On the other hand, wages consistently decreased for all construction jobs by about 0.5% per year over the last decade. This could indicate that a sustained oversupply issue among construction occupations has allowed employers to pay workers slightly less for their labor. Time will tell whether there are too many or just the right number of people in the workforce with construction skills, but it is difficult to say right now.

    Conclusion

    The dynamic nature of the economy causes routine changes in labor market demand. These data illustrate an important and often overlooked fact: the labor market is driven by all other markets (e.g., markets for cellular phones, houses, and doctor’s office visits, etc.). Over time, we can see labor market changes occurring, for instance, when the number of product orders conducted over the internet increase because there are jobs required to support that increase. At the same time, there are jobs that will be lost because they are no longer the most efficient way to address consumer demand. It is easy to see how skills shortages naturally arise in a market-based economy. When such changes occur, it is imperative that public education, the workforce system, and economic development agencies are able to cope with the changes, and assist workers in the process of moving from areas of skill surplus into areas of skill shortage.

    In the next blog post we will analyze these potential skill gaps from the supply perspective to see whether or the supply of talent has grown at the same rate as the demand for the workers identified here. We will also analyze the knowledge, skills, and abilities (KSAs) that are incumbent to the potential skill shortage occupations in order to see which KSAs could be undersupplied in the labor market.

    Points, a consultant and project manager at EMSI, can be contacted at brian.points@economicmodeling.com. Read more about him here and EMSI Consulting here.

    Illustration by Mark Beauchamp

    1. See page 5 of the Bureau of Labor Statistics’ Job Openings and Labor Turnover highlights from May 2001 for an up-to-date illustration of this relationship: http://www.bls.gov/web/jolts/jlt_labstatgraphs.pdf). It is also worth mentioning that some economists point to the special extension of unemployment benefits that occurred during the recession as a contributing factor to unexpectedly high unemployment. back
    2. This situation occurs when either a) supply drops due to workers’ unionization or the advent of new worker certification requirements that did not previously exist, and/or b) the skills for a certain job category become so specific and technical that only a select group of workers can perform them. back
    3. With this theory, it is assumed that each group of workers is “homogenous.” In other words, no one worker in any occupational category is more knowledgeable or skilled than any other. Of course, in the real labor market some workers are much more capable than others. In such cases, the higher skilled and lower skilled workers each belong to their own occupational groups, which have their own market equilibrium points with different wage and employment levels. back
    4. All wages are in real terms, adjusted for inflation to 2010 dollars. The cut-off point for significance is 0.5 standard deviations from the median. Please be aware: we are not treating this as a standard econometric model in which we are attempting to show a consistent relationship between earnings change and employment change. For this reason, we are not utilizing the same measures for statistical significance that are common to econometric models. back

  • Houston’s Not Resilient? Really?

    Alert reader Jessie sent me this article about Houston ranking "very low" on a "resilience capacity index".  For real.  I was dumbfounded too. And now I’m going to post out-of-character and get a little snippy…

    Let’s skip right past the parade of articles and data showing Houston and Texas weathering the great recession better than just about everywhere else in the country.  It’s so strong Rick Perry might win the Republican presidential nomination based on it.  That alone should make them question their entire methodology.  Go back to the dot-com and Enron crashes, and you’ll find the same minimal impact.  Sounds like we’re pretty resilient to me.

    Then there’s their explicit declaration that it represents the ability of a city to weather the shock of a major storm or flood.  I’ll point to both Tropical Storm Allison and Hurricane Ike.  Both were devastating – yet we bounced back relatively quickly from each one.  You might note on their map that New Orleans ranks higher than Houston, yet Hurricane Katrina knocked New Orleans on its back for years.  Maybe they need to add a "levees upkeep" variable to the index?

    Let’s look at some of the problematic variables that make up the index:

    • Economic diversification: I’ll admit there’s some value here, but it’s also worth noting that some of the wealthiest and most successful cities in the country built that success around one strong, dominant industry: NYC and finance, DC and govt, SF/SV and tech, Houston and energy, etc.
    • Income equality: also a proxy for "we don’t have any high-paying industries" – nor the corresponding tax base.  How is this helpful for resilience? (more on the value of income disparity here)
    • Educational attainment, being out of poverty, and home ownership: a proxy for using tight zoning and land-use regulation to keep out apartments, new and affordable housing, and immigrants.
    • Metropolitan Stability: aka "stagnation".  Cities that aren’t growing have amazingly stable populations because nobody wants to move there and none of the residents can sell their houses.

    My cynical side thinks that, since the University of Buffalo put this out, they intentionally chose variables that made Buffalo look good, even though it’s one of the most stagnant metro economies in the country.

    All in all one of the worst designed indexes I’ve ever seen – and there are some doozies out there.

    OK, I feel better.  End venting (and snippyness).

    Read more from Tory at HoustonStrategies.com.

  • Sustaining the Suburbs

    The proposition is simple, if not overwhelming.  If we want sustainable cities – however you define “sustainable” – we had better put some effort into the quality of suburban life.  We need to get over denigrating suburbs and sprawl.  That simply ducks the issue of where and how most people spend most of their time.  We need to moderate a preoccupation with promoting CBD and big centre lifestyles.  Those are places that people want visit, but not necessarily where they want to live.

    Come back Jane, our suburbs need you
    It’s fifty years now since Jane Jacobs’ landmark book about saving North American cities from themselves.  She argued against the prevailing push for urban renewal as displacing communities and destroying street life with motorways, car parks, and bland commercial development.  Jacobs’ writing and her activism inspired a resistance credited with saving inner city villages, helping retain the human character of large cities, and inspiring a generation of urban designers and planners. 

    There is no doubt that the Jacobs message took hold in New Zealand.  It’s become compelling since the crash of ‘87 slowed down the razing of inner city blocks and marked the beginning of the end of the white collar CBD.  Hanging on to what we’ve got is one way to stop the hollowing out.

    Unfortunately, today’s call for central city mega projects on which to stake a claim to an international presence and the push for large scale CBD residential development on which to stake a claim to environmental stewardship run the risk of reversing the gains to inner city life.  High rise apartments, tracts of high density housing, and grandiose civic plans risk undermining the essence of the central city in the same way as urban renewal and freeways once did.

    But that’s not what this posting is about.  The reality is that the bulk of our populations live in the suburbs; the suburbs that are growing the most; and that’s where we need to promote the capacity for people to live fulfilling lives.  That’s where today we need to promote street life and be wary of the threats posed by the new urbanists and their grand plans for intensification.

    Most people still live in the suburbs
    Its obvious that most people still live a suburban life.  But that doesn’t seem to be appreciated by the people who plan our cities today, even as the number of suburban residents keeps growing.

    Look at the three metropolitan areas in New Zealand, not big by international standards, but nevertheless reflecting an entrenched trend in the developed world – a move to decentralise.  The numbers say it all. 

    Over the last 14 years population growth has been totally dominated by the suburbs.  In Auckland, the inner city accounted for only 6% of a 326,000 person increase.  In other words, 305,000 opted to live in the suburbs and beyond, compared with 21,000 in the central city.  In Christchurch, the CBD accounted for just 1% of population growth and the rest of the inner city 2%.  Wellington, the capital city with a distinctively constrained setting did much better, but a revitalised CBD still accounted for just 10% of population growth. [1]

    Population Growth in the Central City: Auckland, Wellington, Christchurch, 1996-2010
    Source: Statistics New Zealand

    And they still favour the outer suburbs

    Let’s break this down a little further.  Greater Christchurch Urban Development Strategy Partners (http://www.greaterchristchurch.org.nz/) came up with a plan for consolidating the city.  This includes policies promoting central city living or living around established commercial centres and development contained largely within metropolitan limits.  Well, we can see the warning signs for this sort of thinking from the very small share of recent growth in the inner city.  It seems that the new plan is set to fly in the face of recent experience.   

    And if we divide Christchurch’s suburbs into three groups (inner, outer, and periphery) we find the decentralising tendency that it is set against is even stronger . [2]

    Population Growth in Christchurch Suburbs, 1996-2010

    The peripheral suburbs on the city fringes have led growth rates, while the outer suburbs have led absolute growth.  (That’s if we overlook the fact that the small towns in Christchurch’s hinterland left out of this analysis have grown at even faster rates, with the adjoining districts two of the fastest three growth areas in New Zealand).

    Does it make sense to stem this pressure?  Not if we want the cities to continue to grow, because the majority of people clearly favour suburban living, and that’s where the greatest capacity for accommodating them lies. 

    So while it’s exciting to record rapid growth rates of population gain in our inner cities, policy makers really need to make sure we are doing the right thing by our suburbs. 

    Places to live …
    This may mean, for example, ensuring that we don’t sacrifice too many of the green spaces to high density housing: our suburbs also need to breathe.  If we want to lift densities, then terraced units and the occasional low rise apartment may be all we need.  They are probably the most easily achieved forms of intensification in areas where consolidating sites is notoriously difficult and where existing residents will fight to preserve existing character. 

    Better still may be judicious development of greenfield sites, where we can boost densities by applying the principles of Smart Growth without destroying what people value about what went before, without overloading existing facilities and infrastructure, creating attractive public and private realms, and potentially enhancing rather than trashing biodiversity, water and air quality.

    Places to work …

    >We will also need to promote neighbourhood centres to ensure that they can accommodate diverse activities and services, that they are easy to get to and get around, well appointed and vibrant.  They may even become the focus of modest park and ride facilities, the framework around which flexible public transport within and beyond the neighbourhood can best be delivered.

    It may be timely to review what in our planning provisions force people to make regular cross-city journeys to work, and whether this can be changed through more decentralised employment. 

    Places to play …
    While local centres are becoming the focus of community and neighbourhood commerce and culture, suburban parks and gardens will also have a role to play.  We need good spaces close to the majority of homes for sport and recreation, and safe local places for families and children to gather.   

    We might more actively protect some of the informal spaces in our suburbs, and take a broad view of what constitutes heritage in doing so.  We may have to protect landscapes and structures because they are iconic in local areas, not because we believe they may have national or international significance.  Where they don’t exist, we may even have to create the landmarks, the parks and town belts, and the structures that reinforce local identity and culture.

    Strong suburbs for a strong CBD
    By allowing more things to happen in the suburbs without overloading them with bland residential development or tracts of mixed use that fall between urban design stools, we have an opportunity to advance the planners’ live-work-play mantra, and to enhance the sustainability of our cities. 

    Ultimately, it is the quality of day-to-day life in a city and its capacity to attract and hold skilled and motivated people that will determine its prosperity.  And it is those people and that prosperity that will underwrite the health of the CBD.  Without strong suburbs, we cannot sustain a strong CBD.

    [1]            For this exercise, the following council areas were counted, Kapiti, Porirua, Upper and Lower Hutt, and Wellington City.

    [2]           This classification omits the largely rural Banks Peninsula which is quite separate from the metropolitan area.

    Phil McDermott is a Director of CityScope Consultants in Auckland, New Zealand, and Adjunct Professor of Regional and Urban Development at Auckland University of Technology.  He works in urban, economic and transport development throughout New Zealand and in Australia, Asia, and the Pacific.  He was formerly Head of the School of Resource and Environmental Planning at Massey University and General Manager of the Centre for Asia Pacific Aviation in Sydney. This piece originally appeared at is blog: Cities Matter.

    Photo by New Zealand Defence Force.

  • The 2012 Vote: A Newly Diverse Center

    Demographic transformations are changing how the American people vote. In 2010, only 15 per cent of Americans claimed to be completely unaffiliated independent voters, while 48 per cent identified with the Democratic Party and 37 per cent with the Republican Party. Back in the 1990s, party identification was at 44 per cent each.

    The Democrats’ advantage is due in large part to Millennial voters, recognised as the biggest and most important new voting cohort in America politics. Sometimes referred to as the ‘youth vote’, Millennials are generally born between 1982 and 2003. The Democratic advantage can also be attributed to an increase in Hispanic voters, who identify as Democrats over Republicans by a 2:1 margin.

    According to a study released in May by the Pew Research Center, of those registered voters in America who identify as Republicans, 14 per cent hold conservative views on most issues, 14 per cent are moderates with liberal views on most social issues, 11 per cent are staunch Tea Party conservatives, 11 per cent are disaffected down-sizers and 10 per cent are free market, small government libertarians. Of those registered voters who identify as Democrats, 16 per cent are solid Democrats (liberal on all issues), another 15 per cent are hard pressed (religious, and financially struggling),and 9 per cent are New Coalition Democrats (positive, minority-rights oriented).

    Many American voters are choosing not to identify with either political party. Unlike the Australian Independent voter, those Americans who reject the major parties, rather than moving towards the fringes, are flocking to the centre of the political spectrum. This has resulted in the centre becoming increasingly diverse.

    Surprisingly, the two independent members of the Senate, Bernie Sanders (Vermont) and former Democrat Joe Lieberman (Connecticut), rather than being centrists, hold strong ideological positions on issues such as the role of government, immigration, and the environment. Their election defies liberal or conservative orthodoxy and challenges the idea of the centering of the American voter.

    Evidence from the Pew report suggests that voters on the Right are polarising. Staunch conservatives are clearly identifiable in polling. These voters take extremely conservative positions on nearly all issues, from the size and role of government to economics, foreign policy and domestic social issues. Most are aligned with Tea Party Republicans in their disapproval of Barack Obama. There still exists a core group of Main Street Republicans, however, they are becoming less identifiable in opinion polls and in national polling.

    On the Left, not surprisingly, Solid Liberals express diametrically opposing views from the Staunch Conservatives on virtually every issue. While Solid Liberals are predominantly white, minorities make up greater shares of New Coalition Democrats, who are distinguished by their upbeat attitudes in the face of economic struggles. This group includes nearly equal numbers of whites, African Americans and Hispanics. Hard-Pressed Democrats are about a third African American. Unlike Solid Liberals, both of these last two groups are highly religious and socially conservative.

    Some American voters like to be considered Libertarians and Post-Moderns. Both groups are largely white, well-educated and affluent. They tend to be secular and are pro-homosexuality and abortion. Republican-oriented Libertarians, however, are far more critical of government, less supportive of environmental regulations, and more supportive of business.

    A survey conducted for the progressive think tank NDN found that a majority of Americans — 54 per cent — favor a government that actively tries to solve societal and economic problems, rather than one that takes a hands-off approach.

    Staunch Conservatives and Main Street Republicans share similar views on the positive role of religion in society (90 and 91 per cent respectively), and that immigrants are a burden on American society (68 and 60 per cent). Staunch Conservatives more strongly believe that governments can no longer afford to help the needy (87 per cent) than Main Street Republicans (75 per cent). In relation to the economy and the environment there are significant differences. Staunch Conservatives very strongly believe environmental laws cost too many jobs and hurt the economy (92 per cent), a view not held by Main Street Republicans (only 22 per cent support the claim). Most Main Street Republicans think business corporations make too much profit (58 Per cent). This view is rejected by Staunch Republicans. Only 13 per cent of this group believes corporations make too much profit.

    Democratic voters, according to the Pew study, are divided over immigration. Solid Liberals overwhelming agree that immigrants strengthen American society. This is a view held by the very few Hard Pressed Democrats (13 per cent). New Coalition Democrats are more in line with Solid Democrats on the question of immigration (70 per cent think immigrants make a positive contribution). Democrats favor diplomacy as the way to peace: Hard Pressed by 56 per cent), Solid Liberals by 89 per cent. There are also significant differences on gay rights and environmental laws. Over 90 per cent of Solid Liberals support gay rights and environmental protections. Among Hard Pressed Democrats, 43 per cent support gay rights and 22 per cent see environmental laws as hurting the economy and costing jobs. Each of the three Democratic voter groups share similar views on the need for improvements to ensure equal rights for African Americans.

    Age is a factor in partisanship and political values. Younger people are more numerous on the Left, and older people on the Right. Staunch Republicans over 50 years of age are the most highly engaged in following government and public affairs (75 per cent).

    How do American voters rank Barack Obama? It’s not surprising that Republicans disapprove of Obama’s job performance and health care plan. The problem for Obama is that he does not have enough support among Democrat voters to counter Staunch Republicans: Among Solid Liberals, only 64 per cent strongly approve of Obama’s job performance.

    Obama’s personal image is positive among American voters, but his job approval rating is low. Doubts raised by ‘birthers’ continue to get traction in American politics. More than one-in-five Americans (23 per cent) say, incorrectly, that Obama was born outside the United States.

    This new portrait of the American voter will challenge both Democrats and Republicans in the lead-up to the 2012 presidential election. For politicians on both sides, the challenge is to appease the ideological and moderate wings, each with competing goals and aspirations, and at the same time to ensure that each wing does not break out into disagreements with the other over core principles. The Tea Party Conservatives and Republicans have recently gone to the brink, but managed to pull back ‘for the sake of the Party’.

    Perhaps the answer is in Bertolt Brecht’s quip: “Would it not be easier for the government to dissolve the people and elect another?”

    Dr Scott Denton completed a PhD on Australian elections in 2010. He is an academic at the University of New South Wales, Sydney, who regularly writes on Australian and American elections and electoral history.

    Photo by Ho John Lee (HJL): Vote!

  • How Los Angeles Lost Its Mojo

    Los Angeles today is a city in secular decline. Its current political leadership seems determined to turn the sprawling capitalist dynamo into a faux New York. But they are more likely to leave behind a dense, government-dominated, bankrupt, dysfunctional, Athens by the Pacific.

    The greatness of Los Angeles stemmed from its willingness to be different. Unlike Chicago or Denver or New York, the Los Angeles metro area was designed not around a central core but on a series of centers, connected first by railcars and later by the freeways. The result was a dispersed metropolis where most people occupied single-family houses in middle-class neighborhoods.

    Lured by the pleasant climate and a business-dominated political economy, industries and entrepreneurs flocked to the region. Initially, the growth came largely from oil and agriculture, followed by the movie industry. Defense and aerospace during World War II and the postwar era fostered a vast industrial base, and by the 1980s Los Angeles had surpassed New York as the nation’s largest port, and Chicago as the nation’s leading industrial center.

    The region hit a rough spot as the end of the Cold War led to massive federal cutbacks in aerospace. Los Angeles County lost nearly 500,000 jobs between 1990 and 1993. But it bounced back, adding nearly 400,000 jobs between 1993 and 1999. Aerospace never fully recovered, but other parts of the industrial belt—including the port and the apparel and entertainment industries—grew. An entrepreneurial class of immigrants—Middle Eastern, Korean, Chinese, Latino—launched new businesses in everything from textiles and ethnic food to computers. The pro-business mayoralty of Richard Riordan and the governorship of Pete Wilson restored confidence among the city’s beleaguered companies.

    Then progress stalled. Employment stayed relatively flat from 2001 until 2005, when Mayor Antonio Villaraigosa was elected, and then started to drop. As of this March, over the entire L.A. metropolitan area, which includes adjacent Orange County, unemployment was 11.4%—the third-highest unemployment rate of the nation’s 20 largest metro areas.

    Why has Los Angeles lost its mojo? A big reason is a decline in the power and mettle of the city’s once-vibrant business community. Between the late 1980s and the end of the millennium, many of L.A.’s largest and most influential firms—ARCO, Security Pacific, First Interstate, Union Oil, Sun America—disappeared in a host of mergers that saw their management shift to cities like London, New York and San Francisco. Meanwhile, says David Abel, a Democratic Party activist and publisher of the influential Planning Report, once-powerful groups like the Los Angeles Chamber of Commerce and the Los Angeles County Economic Development Corporation lost influence.

    The machine that now controls Los Angeles by default consists of an alliance between labor and the political leadership of the Latino community, the area’s largest ethnic population. But since politicians serve at the whim of labor interests, they seldom speak up for homeowners and small businesses.

    Mayor Villaraigosa, a former labor organizer, has little understanding of private-sector economic development beyond well-connected real-estate interests whom he has courted and which have supported him. He has been a strong backer of L.A. Live, a downtown ports and entertainment complex, and other projects that have benefited from favorable tax treatment and major public infrastructure investments. He’s currently supporting a push to build a new downtown football stadium, though L.A. has no professional football team. His biggest priority is to build the so-called subway to the sea, a $40 billion train line to connect downtown with the Pacific.

    But L.A.’s downtown employs a mere 2.5% of the region’s work force; New York’s central business districts, by contrast, employ roughly 20%. “To put the entire focus of development on downtown L.A.,” says Ali Modarres, chairman of the geography department at Cal State Los Angeles, “is to ignore the historical, cultural, economic [and] social forces that have shaped the larger geography of this metropolitan area.”

    Moreover, the mayor’s accent downtown is on housing, not manufacturing. And as Cecilia Estolano, former head of the Community Redevelopment Agency, points out, “downtown housing simply doesn’t create the jobs that small manufacturers do.”

    Meantime, business-strangling regulations proliferate, often with support from a powerful and well-heeled environmental movement, which Mr. Villaraigosa counts on for political support and media validation. There are draconian moves to control emissions at the port from ships and trucks. Also harmful are the city’s efforts to expand the unions’ presence from the docks to the entire network of trucks serving the port—essentially forcing out independent carriers, many of them Latino entrepreneurs, in favor of larger firms using Teamster drivers.

    Such policies could backfire, says economist John Husing, leading shippers to transfer their business to cheaper and less heavily regulated ports such as Charleston, Houston, Savannah and other growth-oriented southern cities. This is particularly dangerous given the planned 2014 widening of the Panama Canal, which will make Southeastern ports far more competitive for Asia-based trade. Mr. Husing notes that L.A.’s port is the largest generator of blue-collar employment in the region.

    Even some liberal Democrats are beginning to realize that the current system isn’t sustainable. Writing recently in the Los Angeles Business Journal, Roderick Wright, a Democratic state senator from south Los Angeles, compared the state and local governments with the Mafia. The “vig” that government takes from local businesses, Mr. Wright argued—both in taxes and in the cost of regulation—has undermined job creation, particularly in working-class districts like his. He also warned that renewable-energy mandates recently imposed by the state would boost the cost of energy in the region, already 53% above the national average, by an additional 20% to 25%.

    Who will challenge the machine and its ruinous economic policy? It’s not likely to be the city’s enervated business sector. But the city’s working and middle classes might, says Ron Kaye, former editor of the San Fernando Valley–based Daily News. He points to the city’s remaining middle-class homeowners, who are concentrated in the San Fernando Valley but also occupy a number of diverse neighborhoods. “These are the places that reflect the whole idea of L.A., as opposed to the Villaraigosa vision of a city of apartment dwellers,” Mr. Kaye says.

    It is uncertain if Los Angeles will experience the Sunshine Revolution it so desperately needs. What is certain is that only when the machine and its masters no longer dictate L.A.’s fate can this diverse and dynamic region resume its ascent toward greatness.

    This piece originally appeared in the Wall Street Journal and is adapted from the Summer 2011 edition of The City Journal.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University, and an adjunct fellow of the Legatum Institute in London. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

    Photo by pinchof

  • Moving from the Coast

    For years both government and media have been advancing the notion that   America’s coastal counties are obtaining most of the population growth at the expense of interior counties. For example, the National Oceanic and Atmospheric Administration reported in the 1990s: Coastal areas are crowded and becoming more so every day. More than 139 million people–about 53% of the national total–reside along the narrow coastal fringes.

    NOAA went on to say that the population of the coastal counties is expected to increase by an average of 3600 people per day and noted further that the coastal counties were growing faster than the nation as a whole. NOAA has designated 673 counties on four coasts (Atlantic, Gulf, Pacific and Great Lakes) in the contiguous United States, Hawaii and Alaska as coastal counties.

    Population Growth: In fact, coastal counties are not growing faster than the nation as a whole and were not when NOOA issued the 1990s report. For most of the last 40 years, the nation’s interior counties have been adding more population. From 1970 to 2010, interior counties added 55.7 million new residents, compared to 49.7 million new residents in coastal counties. This is a reversal from 1940 to 1970, when two thirds of the nation’s population growth was in the coastal counties.

    The trends today actually have become more favorable for the interior than at any time in a century. From 2000 to 2010, the interior counties captured more of the nation’s growth than in any decade since 1900 (Table). From 2000 to 2010, the interior counties added 16.0 million residents, 59.6 percent of the nation’s growth compared to 11.4 million new residents in the coastal counties.

    Coastal and Interior Population: Counties
    1900-2010
    Coastal Counties Interior Counties United States
    Year Population Share Change Population Share Change Population Change
    1900         30.2 39.7%         46.0 60.3%         76.2
    1910         38.2 41.4%           8.0         54.0 58.6%           8.0         92.2         16.0
    1920         46.2 43.6%           8.0         59.8 56.4%           5.8       106.0         13.8
    1930         57.4 46.6%         11.2         65.8 53.4%           6.0       123.2         17.2
    1940         62.3 47.1%           4.9         69.8 52.9%           4.0       132.2           9.0
    1950         75.2 49.9%         12.9         75.5 50.1%           5.7       150.7         18.5
    1960         94.4 52.6%         19.2         85.0 47.4%           9.5       179.3         28.6
    1970       109.9 54.0%         15.6         93.5 46.0%           8.5       203.4         24.1
    1980       119.8 52.9%           9.9       106.7 47.1%         13.2       226.5         23.2
    1990       133.4 53.6%         13.6       115.3 46.4%           8.6       248.7         22.2
    2000       148.2 52.7%         14.9       133.2 47.3%         17.9       281.4         32.7
    2010       159.6 51.7%         11.4       149.1 48.3%         16.0       308.7         27.3
    Population in Millions
    Calculated from US Census Bureau Data
    Coastal counties designated by NOAA (673 counties)
    Totals may vary due to rounding

     

    As of 2010, the coastal counties have 51.7 percent of the nation’s population, having dropped from 52.7 percent in 2000 and a peak of 54.0 percent in 1970 (Figure 1). Rather than adding 3600 new people every day, coastal counties added 3100 people per day, while interior counties added 4400 per day during the 2000s. A smaller sample of 559 counties that was examined by economists Jordan Rapaport and Jeffrey Sachs in the early 2000s experienced an even more pronounced movement away from the coasts between 2000 and 2010, with more than 60 percent of the nation’s growth taking place in the interior counties.

    There may also be some concern about density in coastal counties.   Yet Malthusian fears need not grip coastal residents. With a population density of approximately 315 per square mile (120 per square kilometer), the coastal counties of the contiguous United States have only a slightly higher density than the post-enlargement 27-nation European Union. The coastal counties have a density one-half that of Germany. In contrast, the interior counties are far less dense, at 60 persons per square mile.

    There has also been significant change in coastal population trends since the middle 1990s. The largest Pacific Coast metropolitan areas, such as Los Angeles, San Francisco, San Diego, San Jose and Seattle have seen their growth slow considerably. In the 1990s, NOAA was projecting huge population increases for Los Angeles and San Diego counties. It appears likely that these 2015 projections will fall at least 600,000 short in both counties. Even Seattle, arguably the healthiest economically among the west coast metropolitan areas, is now growing more slowly than former laggards Oklahoma City, Indianapolis and Columbus in the interior.

    Regional Population Growth: There was significant variation in growth among the varied regions of the country. In the Northeast, there was much stronger growth on the coast, which added 1.6 million people, compared to a gain of less than 150,000 in the interior. In the Midwest, the coastal counties (along the Great Lakes) lost 120,000 people, while the interior counties gained 2.7 million. In the South, the interior grew more, at 8.1 million, slightly more than 6.3 million in coastal counties.  In the West, interior counties gained 5.1 million people, while the coastal counties gained 3.7 million (Figure 2). This drop in coastal growth was a principal reason why the West grew less quickly than the South, which experienced the most robust coastal growth. For this reason, the West failed to be the nation’s fastest growing region for the first time since 1900.

    Personal Income: Rappaport and Sachs noted in their early 2000s work that the density of economic activity was far greater in the coastal counties. Of course this is to be expected, due to their greater population density. However the data with respect to the distribution of personal income is less clear. Since 1969, coastal and interior counties have been alternating leadership in personal income growth per capita. During the 2000s, interior counties experienced average personal income growth slightly less than that of the coastal counties (Figure 3). However, average per capita income since 1970 has risen 81 percent, compared to a lower 75 percent in the coastal counties (adjusted for inflation).  Overall, the share of income in the interior counties has been growing modestly (Figure 4).

    Domestic Migration: The most important factor in the growth of the interior counties in the 2000s lies with net domestic migration, with more residents moving from the coastal counties to the interior counties. Between 2000 and 2009, 4.5 million people moved to the interior counties, while 4.5 million people moved away from the coastal counties, according to Census Bureau estimates (Figure 5).

    Rappaport and Sachs had theorized that the greater concentration of population and economic activity in the coastal counties could be reflective of a more attractive quality of life. The domestic migration data would suggest that, at least over the last decade, people are opting for the interior, perhaps sensing that the coastal quality of life may not be as affordable and accessible as in the past.  

    Cost of Living: The key here lies with the cost of living, which has become far higher on the coasts then in the interior. The most significant cost of living differences for households are in the cost of housing.   

    From 2000 to 2009, housing affordability deteriorated markedly in the coastal counties. Census Bureau data indicates that the Median Multiple (median house founded divided by median household income) rose from 3.6 to 5.4 in the coastal counties (population weighted). By contrast, housing affordability worsened far less in the interior counties, where the Median Multiple rose from 2.5 to 3.1. Thus, the median household saw owned housing increase 22 months worth of income in value in coastal counties, compared to seven months worth of income in interior counties (Figure 6). At the same time, these higher coastal house prices developed as demand for housing was dropping substantially, with 4.5 million people moving away from coastal counties (above).

    Many of the coastal counties have strong land use regulation (smart growth or urban containment regulation), especially in California, Oregon, Washington, Florida and the metropolitan areas of Boston, New York and Washington. A considerable body of research, both econometric and descriptive, has associated more restrictive land use regulation (called smart growth, urban consolidation or urban containment) with higher house price increases, reaching back at least to the seminal 1970s work by Sir Peter Hall and his associates in the United Kingdom. It thus seems likely that the deterioration of housing affordability in coastal counties is materially associated with their less robust growth. The quality of life on the coasts may simply have become too expensive.

    The Future? It is unclear whether the recent higher population growth rates, stronger migration trends and improved economic performance of the interior will continue into the future. The 1940 to 1970 dominance of the coastal counties surged as coastal metropolitan areas, especially in Florida and California, grew much more quickly. Now that pattern has been reversed.  More favorable trends over the past 40 years in the interior counties seem likely continue, unless coastal house prices and the cost of living begin to swing back toward the national norm.

    —-

    Note: Complete county data is at County Coastal Population (also attached to this article)

    Photograph: San Diego, which experienced greater domestic outmigration than Pittsburgh in the 2000s.