New Geography

Category: Economics

  • California’s Social Priorities, A New Report

    This is the introduction to a new report, California’s Social Priorties, from Chapman University’s Center for Demographics and Policy. The report is authored by David Friedman and Jennifer Hernandez. Read the full report (pdf).

    California has achieved a great deal since 1970, including much cleaner air, water and more effective resource stewardship notwithstanding a population increase from approximately 19.9 million in 1970 to over 38 million by 2014. 2 Nevertheless, the state continues to face significant, and in many cases increasingly adverse educational and social equity challenges. As summarized in more detail below:

    • California’s grade 9-12 dropout rates remain high and, contrary to national trends, the state’s population of adults with less than a high school education significantly increased from 1970 and currently accounts for nearly 20% of the state’s adults, second highest in the nation. The number of Americans with less than a high school education fell by over 23 million during 1970-2012, and rose in only four states: California, Nevada, Arizona and New Mexico. California’s net increase—over 515,000 adults—was greater than the increase in the other three states combined (409,000).
    • The state’s population of high school and community college graduates grew much slower than in the rest of the country, and the population of 4-year or more college educated adults barely kept pace with average national growth rates. In contrast, Texas, also a large, high-immigration state, has added high school and community college-level educated adults more rapidly than the national average since 1970, while the number of adults with less than a high school education declined.
    • Inequality has dramatically increased since 1970, when California’s rate of inequality was 25th in the nation. By 2000, the state had the second worst in – come inequality in the country, trailing only New York. The state’s inequality remained fourth worst in the nation (behind only New York, Connecticut and Louisiana) in 2013.
    • Income growth for all but the richest 20% of all California households was below the national average from the mid-1970s to the mid-2000s. Incomes for the richest 20% and 5% of all house – holds rose much faster than in the rest of the country.
    • Between 1970 and 2013, California’s official poverty rate (which ignores cost of living differences in the U.S.) rose from less than 10% to over 16% of the population. In 2012, the U.S. Census Bureau developed a supplemental poverty measure that accounted for higher living costs in coastal locations such as California. The supplemental measure indicated that, during 2010-2012, nearly 9 million Californians, or about 24% of the state’s population, was impoverished, by far the largest poverty rate in the country. Although California accounts for 12% of the U.S. population, the state has over 18% of the nation’s poor.
    • California’s capacity to generate new jobs has severely diminished over time. During 1970-1990, the state generated nearly 5.6 million new jobs and 14.5% of the total employment growth in the country although it accounted for less than 10% of the nation’s population in 1970. From 1991-2013, the state produced 2.6 million new jobs, just 9.7% of the net U.S. employment growth, and well below the state’s 12% share of the nation’s population in 1990. Although the state’s population rose by roughly similar amounts in 1970-1990 (9.8 million) and 1991-2013 (8.6 million), California was unable to generate even half the number of jobs during 1991- 2013 than were created in 1970-1990.
    • Annual nonfarm employment growth averaged 3% in 1970-1990, well above the national average, but just 0.8% in 1991-2013, well below the national average. In contrast Texas, with 70% of California’s population, produced over 4 million new jobs during 1991-2013, and Florida, with half of California’s population, generated nearly the same number of new jobs as California (2.2 million). During 1991-2013, California more closely resembled historically slow growing northeastern and Midwest states than faster-growing regions of the U.S., especially in the southeast.

    These data show that California needs to address significant, and growing social priorities, including significant improvement in adult educational rates at the high school and post-secondary level, increasing employment opportunities at a rate sufficient to serve past and forecast population growth, and reducing the state’s inequality and very high poverty rates.

    California continues to lead the country, and by some measures even the world, in environmental quality and climate change initiatives. But public policy must evolve to leverage these environmental achievements into corresponding improvements in educational attainment and middle class job creation. With more than 18% of the nation’s poor, and less than 1%3 of global greenhouse gas emissions, California should also embrace the challenge of leading the world in the creation of middle class manufacturing jobs for the rapidly evolving clean and green technology that California’s laws mandate, California’s educational and technology sectors invent, and California’s venture capital investors bring to the global market.

    Instead, California’s policies, and regulatory and legal costs and uncertainties, tend to divert thousands of middle class jobs even in emerging green industries (including those not requiring high school diplomas) to other locations, including the Tesla battery manufacturing facility, which moved to Nevada. The loss of projects that help achieve important environmental objectives, create high quality jobs, and comply with California’s strict environmental and public health protection mandates, continues to occur in part because well-funded special interest groups ranging from business competitors to labor unions file "environmental" lawsuits as leverage for achieving narrow political or pecuniary objectives rather than to protect the environment and public health. This study suggests that the state must work much harder to ensure that California’s landmark environmental laws are not misused or pursued in a manner that adversely affects other, equally important policy priorities for California’s large undereducated and underemployed population.

    Read the full report (pdf).

  • North By Midwest: Minneapolis-St. Paul as the Capital of the North

    In November, I joined an overflow crowd at the Walker Arts Center to hear a panel discussion entitled Midwest? The Past, Present, and Future of Minnesota’s Identity. The discussion stemmed from common questions of identity, and proposed that Minnesota and the Twin Cities secede from the “Midwest” and claim ownership of a new region: the North. You might have heard about this, perhaps from the Star Tribune’s original write-up. There are some powerful people behind the movement. It’s the brainchild of Eric Dayton, son of the governor and owner of The Bachelor Farmer restaurant and the Askov Finlayson clothing store.

    Recently, the idea has experienced another surge of media interest. Brian Martucci, The Line‘s Innovation and Jobs News Editor, wrote an article that catalogs piecemeal some of the projects and movements that are transforming the Minneapolis-Saint Paul cityscape. A day later, The Wall Street Journal (of all newspapers), published a different take by Christina Brinkley, their fashion and style columnist.

    It’s a fascinating experience to read these two commentaries side by side. Martucci writes from the perspective of someone who lives here, and his focus is firmly on the built environment. As is evident to any resident, Minneapolis and Saint Paul are undergoing a breakneck physical transformation, with further changes hurtling down the pipeline. Meanwhile from New York, Brinkley is interested in goods. Red Wing shoes, Faribault wool, Duluth packs, and other ‘Made in Minnesota’ products are reportedly—this writer wouldn’t know, he cannot afford them—in vogue, thanks in part to their decades-old, blue collar, lumberjack bona fides. At the confluence of both of these trends, both writers found Eric Dayton and his determination that we live in the ‘North’, and that Minneapolis-Saint Paul should assert its place as the capital of this new region.

    The Idea of North

    I love the idea of “North.” I am a New York native. I came to Minnesota for college, studied geography and have lived here in the short period since. I have flown over Minnesota and I have also called it home. I have an unshakable certainty that Minnesota is deeply underrated, especially among people like myself. After the event at the Walker in November, I convened a Facebook focus group of high school friends and asked them what came to mind when they imagined Minnesota. I heard back—

    The Vikings—

    Adrian Peterson—

    Outdoorsy stuff when it’s not cold—

    You can go to the movies or marry your high school sweetheart or get cold in Minnesota—

    We’ve all heard something to the same effect. Minnesota is a frozen tundra populated by mostly second rate football players and provincial people. No theater. No bikes. No beer. We barely get credit for being an objectively incredible sports town. I wholeheartedly blame our association with the Midwest for this. We are shoehorned into a familiar “flyover state” template and the thermostat is turned down. At least Ohio gets to choose the president.

    Why yoke our region to images of yokels? There’s hardly a consensus that we’re part of the Midwest anyway. Meanwhile, the commonly used “Upper Midwest” is the unsweetened oatmeal of place names, hardly worth insisting on.

    In “North,” we would own an identity that is simple, evocative, and accurate. It is miles beyond what we have now.

    mayday2

    Keep Minnesota weird

    Yet is this reason enough? It may be that most Minnesotans feel the same way and that the roots are already laid for a reinvention. The capacity crowd at the Walker indicated that many are ready to jump on board. But the success of the North movement relies on both broad and fervent support. To harness both, advocates need to make a compelling argument that embracing our Northern identity is not just a good idea because it feels better than before, but because there is an economic and cultural imperative toward doing so.

    Do we Really Have a Place-Branding Problem?

    It’s not clear that the Twin Cities and our hinterland are struggling because of our attachment to the boring Midwest and our reputation as the American manifestation of Hoth.

    Minneapolis-Saint Paul is punching well above its weight economically. The metro unemployment rate is the lowest of any large American city, we have high wages, and a modest cost of living. We have the fifth most Fortune 500 companies and the most per capita of American metropolitan areas. We’re not bad for small businesses either. As a result of the MSP economic engine, the state of Minnesota is also doing relatively well. Our state’s unemployment rate is the nation’s fifth lowest and our economy is growing at a reasonably strong rate.

    Of course, the problem here is that we’re dealing with a counterfactual. If Minneapolis-Saint Paul had a stronger identity, would we see the results in a better economy?

    It’s nearly impossible to prove, but with basic data we can make a few back-of-the-envelope observations that may bolster that claim. We know that cities and regions with more human capital have a strong correlation with economic strength. There is some evidence that suggests we could do better at attracting that talent. Data from City Observatory‘s ‘Young and Restless’ Report shows that the Twin Cities boasts one of the better educated cohorts of young people in the country. Given our strong economic position and wealth of colleges and universities this is not surprising. But despite an increase in the number of young and educated in the city and the metro area, we lag behind some of our national rivals in growing these numbers in a way that seems at odds with what our economic and educational attractiveness would predict.

    Minneapolis-Saint Paul ranks tenth in young and educated adults who live in the city, but fourteenth in terms of real growth, and twenty ninth in percentage terms. Denver is an easy comparison. The Mile High City (that’s their tourist slogan too—straight, to the point, and in sync with how outsiders think of the city) had just over 2000 more young and educated adults than MSP in the year 2000. Now the gap is over 6000. That’s why Denver got the star treatment from the New York Times in this article that Facebook’s algorithm has been advertising to me for the past three months.

    Baltimore is the nation’s biggest turnaround story, having doubled the young and educated population of the city from 2000 to 2010, surpassing MSP in the meantime. Baltimore doesn’t have a brilliant identity (The Charm City), but it offers a relatively low cost of living,dramatic cityscape improvements, powerful educational institutions, and an enviable position in the undoubtedly cool Northeast megalopolis (with the ability to commute to DC). MSP can boast three of the four, but not the East Coast brand.

    It’s plausible to infer that Baltimore’s low cost, urban and high ed assets, and unique position have helped it draw in a young, educated crowd, but that its lack of a compelling identity has contributed to the lack of attachment to it that residents feel.

    The Branding Theory

    So the theory as a whole goes like this:

    We are mired in a classic economic morass of having a product that people cannot distinguish from other substitutes. Those substitutes are regional railroad and rust-belt towns like Indianapolis, Cleveland, and Milwaukee. The image of these cities is cold, boring, and downtrodden. If we want Minneapolis-Saint Paul to attract people, especially people who have the agency to move to a place of their choosing, what outsiders think of us matters. It is not enough to simply have a superior product. We want to be competing globally as a region and nationally with places like Baltimore and Denver, cities near our size that are buoyed by capturing a greater share of the flood of young human capital. To better compete, we need to celebrate our strengths, turn our weaknesses into opportunities, and emphasize what makes us unique.

    guthrie

    Minneapolis at its most dramatic

    The third rail to this argument is the (in)famous University of Toronto geographer and public intellectual Richard Florida. His work, first laid out in his astonishingly influential 2002 book, The Rise of the Creative Class, is referenced in the original Star Tribune article, and was also brought up at the Walker discussion. Florida essentially takes the human capital economic theory and identifies certain groups—like scientists, engineers, gays, and bohemians—who are “creatives”, and thus (more) important to urban economic vitality. Creative class theory offers policy prescriptions that are extremely appealing to many urbanites, and a beguiling foundation for the Northern argument. There are two problems with it. The first is that Florida’s work, while popular with policy makers and media, is extremely controversial among academics, and has been thoroughly criticized. Second, the creative class is a deeply exclusionary group. While I enjoy belonging to the demographic being fêted by city officials, the identity of our cities and our region must belong to all, not just people like me.

    This perspective is biased in another way, too. When I ran this article past a friend of mine who is originally from Wisconsin, he called me out on my own coastal bias. In writing extensively on how to make Minnesota attractive to outsiders, I had left unsaid what championing the North might say to those who already live here. This was an embarrassing omission. 29,000 young adults leave Minnesota to attend schools out of state (21,000 come in) and far fewer return. Overall, Minnesota suffers a net loss of residents to domestic migration. Even to those who live here, the North’s image could use burnishing.

    Culture is the Key

    That’s why the Northerners must make a cultural argument as well.

    There’s a lot of low hanging fruit here. Minnesota is the state of hockey (despite thedisappointments wrought by our local professional team). We supply the US Olympic Team’s curlers. We host the Loppet, a pond hockey championship, and the best attended Red Bull Crashed Ice event. Snowmobile manufactures Polaris and Arctic Cat are Minnesota-based. We’re avid ice anglers, an activity that is the subject of ridicule in most of America. (Full disclosure: I don’t really get it either.) There is no state in the union that so thoroughly embraces the full spectrum of winter activity. Meanwhile, in the summer, Saint Paul hosts the Minnesota State Fair, which can claim the highest daily attendance in the nation. If any event celebrates the spectrum of what it means to be a Northerner, it’s this.

    That’s what you put in a 30 second tourism television spot. But being from the North can mean more than just winter activities. Cabin culture is something that seems a uniquely Northern phenomenon. Minnesota has one of the highest rates of second homes among US states (5.1% of the total dwellings); fifth if you remove sparsely populated states. Wisconsin and Michigan have similarly high rates of vacation homes, while Maine, New Hampshire, and Vermont have the highest percentages nationwide. Northern forests are a transcendent cultural asset.

    Historically, the North was settled by Germans and Scandinavians, and their legacy is evident in a way that is easy to spot. Perhaps as a result, our region differs linguistically, which is a powerful source of identity. The Minnesota accent is distinct and a cultural hallmark of the region, just as the drawl defines the American south. Some of our words are different too. Northerners play Duck, Duck, Grey Duck and eat hot dish. (NOT grape salad, remember that now.) And if we’re talking about the legacies of the past, the new North could properly recognize the American Indian history of the region, something that only the Southwest and Pacific Northwest seem to do in any measure.

    Our region is also different politically, especially given recent elections in which our neighbors have become Republican territory while Minnesota has remained steadfastly progressive. But this is an element of Northern identity that is problematic, not least because it threatens to excommunicate about half of those whom we would welcome into our tent. Another concern is that political winds are mercurial. Not long ago Minnesota was governed by a Republican and represented by a Republican senator, while Wisconsin was more proudly liberal. Any Northern identity must be durable enough to withstand political shifts.

    The Economic Argument

    But what do we get from affirming these cultural quirks as the bedrock of an identity distinct from the Midwest? I think a few things.

    One, we bolster the value of Minnesotan goods. The ‘North’ movement has been criticized as an elaborate branding campaign by Dayton on behalf of his businesses. Obviously I believe it is and ought to be much more than that. But that does not mean that spreading and supporting Minnesota brands cannot be one of the goals of the campaign. If Minnesota-made boots, sweaters, blankets, and more become fashionable, than Minnesota itself benefits. In the Star Tribune article, Thomas Fischer, dean of the College of Design at the U of M, admits that the region has a “slightly hick” reputation. Northern goods can pave the way for greater respect for Minnesota, the Twin Cities, and this region’s lifestyle.

    Second, we better control our own narrative. Fargo is a wonderful movie, but the impact it has had on Minnesota’s image is hard to understate. At Macalester (where I went to college), the movie is one of the few reference points many new students have when relating to their new home. It’s a wonder anyone actually attends. Prairie Home Companion is another revered Minnesotan cultural export that does the state few favors in the population at large. I love it too, but it benefits substantially from context (and repeated listening). ‘North’ can be that context. ‘North’ can trigger the connections between not just Fargo and PHC, but on to other strengths as well. There’s a reason that no amount of Hollywood violence set in New York can diminish that city’s glamour. The context is too strong. Yet Minnesota is best known by just a few cultural touchstones.

    Third and finally, emphasizing a Northern culture also includes our rural hinterland. I live in the Twin Cities, as do those who have launched this campaign. At the discussion at the Walker, there was a tension in defining the North; who is a part of it, and who is not? This does not need to be centrally planned; as with all of our nation’s regions, membership islargely down to self-identification. But the North’s borders will not extend beyond I-494 if Minneapolis-Saint Paul dictates the entire platform. There is no dispute that MSP is the economic and cultural capital of the region. There is no dispute that becoming more attractive to young, college educated, creative professionals (near and far) is primarily an urban concern. But rural areas demand respect and deserve it, given that much of the Northern identity we’re peddling is derived from and preserved by them.

    minnesotawsj

    The Wall Street Journal’s map of Minnesota’s offerings

    A Northern Agenda

    In one sense, there’s not a lot that really needs changing. The North already exists; it’s not something we need to invent, only identify. This is already well-covered ground. Look no further than The Line or the WSJ articles for a detailed survey of how Minnesota and Minneapolis-Saint Paul are distinct from other Midwestern places, better than other Midwestern places (would we be here if we didn’t believe that on some level?), and uniquely represent what it means to be a Northern region and city. At the Walker, one point of discussion was how to turn our biting winter into a positive. That’s something that Northerners already do. From the Winter Carnival, to the Holidazzle Parade/Village, to Crashed Ice there is plenty to do in wintertime. What’s left for us to do is to be proud of our region’s characteristics (in this case, the climate) and to sell them.

    But in another sense, it would be a missed opportunity to think of North as simply a marketing campaign. North could (should) be as much about placemaking as place branding. This may be a chance to set the course of the region in a deliberate way. The recent media coverage illustrates these dual objectives, because both Brinkley and Martucci capture important parts of what North is about. The aim is to reinvent the image of our cities and our region—and reinvent the cities and the region themselves.

    If we want it to be—this could be a big undertaking.

    Marketing Ourselves 

    One thing we could get right immediately is the marketing. We should learn from Denver, whose municipal logo and tourism logo both emphasize the skyline of a major metropolis, the rocky mountain backdrop, and the same evocative nickname: ‘The Mile High City’. On the other hand, Minneapolis, our region’s most dynamic hub and economic powerhousehas an awful logo that comes in ballpoint-pen-blue and says absolutely nothing meaningful about the city. Meet Minneapolis has a nice logo, but the tagline; “City By Nature” falls flat. It’s certainly not wrong, our parks are one of the absolute highlights of the cities, but it doesn’t play any of the chords that outsiders have when it comes to Minneapolis. “The Capital of the North” is a bold statement of the city’s prominence, and one that also embraces the region’s climate and culture. It would serve well as both the city’s nickname and tourist slogan, or in a parallel universe, the slogan of a combined MSP tourism agency. As for a logo, there are a number of possible starting points. But my vote is for the North Stars’ iconic mark, which could easily be converted from an “N” to an “M”. The Minnesota/Northern state/region motto and team namesake L‘Etoile du Nord is referenced brilliantly here, and I love the dual meaning that comes from the mapping convention of using a star to represent a capital city.

    There’s also a conversation to be had about Minneapolis-Saint Paul’s symbols. Seattle has the Space Needle, St. Louis has the Gateway Arch, Chicago has the Willis Tower, and so on. It’s certainly not necessary to have a single monolith somewhere, but it’s hard to think of an iconic image of MSP that outsiders might have. Unless MSP hosts the Olympics (which we might want to consider, we wouldn’t have to build much) or the World’s Fair, we’re unlikely to throw a ridiculous amounts of money at a massive landmark project in the future. Plus,we’re already doing it. The new Downtown East stadium will soon be the most well-known building in the cities, beating out four important Minneapolis works by Pritzker Prize winning architects, two classical marvels in Saint Paul, and a sculpture of a utensil that will soon be usurped on all the postcards. That’s not the end of the world. The stadium may well look pretty tremendous. It might also change the default-picture-taking-place fromthat pedestrian bridge over 35W to the Cedar Avenue bridge that crosses over the light rail, which would put the green line in the foreground.

    The renewed focus on Downtown East offers some unique chances to create a unique, iconic place. One interesting urban feature that will come from the downtown east redevelopment is Wells Fargo’s rooftop signage that will shine down on the Commons park. Here’s to hoping that Wells Fargo does something interesting with their branding. The Twin Cities already have a plethora of memorable advertising signs, but none that really stand out as a regional symbol. If the city asked to be able to take over a rooftop space, they could do something much more interesting. As placemaking ideas go, signs are ridiculouslycheap.

    There are other major projects going on that will be local landmarks. The Water Works park would be a tremendous addition to the river, which remains our best (and not entirely fully realized) asset. The reconstruction of Nicollet Mall is another large scale project, and one that’s much further along in the planning and funding. The city has repeatedly indicated their desire to see the mall become the region’s “main street”. On February 3rd, the city issued a call for artists for four large scale projects along the street. Among the projects, the city would like to see an artist “create a large-scale iconic artwork” on the mall. Whatever shape this takes will probably come down to the mind of a mad genius, but the selection process ought to consider work that is derivative our our city and region.

    The key date for this marketing push is February 4th, 2018. That’s the day when over 100 million Americans will tune in to watch two teams—neither of whom is likely to be the Vikings—contest Super Bowl LII. For the week leading up to this event, the nation’s sports media will be in the cities, making jokes about the weather. During the game, NBC will be leading into the play with blimp shots and stock footage. It’s easy to overstate the effect of events like these; politicians do it repeatedly. But the Super Bowl’s visibility and timing make it a natural checkpoint in any branding initiative. The bid committee reportedly won the NFL owners over with their plans to embrace winter. Hopefully that does not just mean hanging out in the MoA. If the organizers are true to their word, the Super Bowl will be the perfect opportunity to show the largest possible audience what living in the North is all about.

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    A new image of Northern cool

    Growing the Region Through Tolerance

    Altering the image of the region is one project. Altering the region itself is another. The North is worth distinguishing and promoting. But it is certainly worth working to change and improve. It seems as though every month brings new construction projects that will transform the Twin Cities into a more dense, livable, and remarkable place. Yet there is still a parking lot across from the Warehouse District light rail station and the downtown Saint Paul Macy’s still casts a pall over the surrounding sidewalks. The real estate market is strong, but not yet strong enough to fill all of the available holes. Growth is still an imperative. Meanwhile the battles over transportation investments, which could bind the cities, state, and region closer together, instead divide them along political lines.

    Is there an apolitical, Northern resolution to these issues? Perhaps not, but in building a Northern identity, we could make choices about our culture that would help us navigate these storms. In particular, I’d urge a reflection on what ‘Minnesota Northern Nice’ could mean.

    All sides of every issue do not need to agree on the particulars, but what they should do instead is make a commitment to a process of compromise and conciliation. Many Minnesotans are descended from Scandinavians, who have a long political tradition of seeking consensus. In an increasingly polarized America, politicians and those promoting the idea of a Northern identity should all agree to work to make Minnesota an exception that can serve as a model. We already can count on voter turnout and civic engagement that rank among the highest in the nation. All sides should at minimum find common ground in bolstering the ownership that all Northerners feel in their society through a political process that takes inspiration from our Nordic cousins. Initiatives like solving the achievement gap and reducing our pernicious residential segregation (linked issues that have been addressed by both parties) would be a powerful start.

    Northern identity should also influence our perspective of who becomes a Minnesotan. The state loses more people each year to other states than it takes in. However, Minnesota is still adding newcomers, thanks to international immigration. Again, Scandinavian nations should provide a Northern model. While these nations are more restrictive towards immigration than the United States, they accept high numbers of refugees. This tradition already exists in the state, and it should become a point of policy emphasis. As Minnesota ages, it will become increasingly crucial to bring people to the state from wherever we can; not just the educated 20-somethings covered above. Other regions will have a similar idea, but the North can gain an advantage by creating resettlement policy in the Scandinavian image that would attract those seeking to start a new life in this country. Meanwhile, the North would set in stone a welcoming and helpful culture that eases the transition for international migrants. We have the affluence, the space, and the culture to adopt such a policy.

    Assessing how Minnesota markets itself, inside and out, is easy. Building and shaping our landscape and culture in this new image is profoundly difficult. But small steps count too, and we should be bold in setting far reaching goals for the city and the region. If there’s a thread that runs through the North campaign, it’s about taking charge of our own story. As the Midwest, we’re on the fringe of a large, flat, and forgettable mass. As North, we’re at the center of a region with its own story to tell and our own story to write.

    minneapolis sunset

     Keep Minnesota awesome

    Yes, I Know This Is Long…

    At one point, this article was conceived as a personal reaction to an issue that struck a chord. It ballooned, in part because everywhere I looked, I found more to discuss. The prospect of changing an entire geographic identity is a daunting one. I believe it can be done, and moreover, I believe there’s a compelling case to be made that it should be done.

    That said, I have just one perspective. This article attempts to approach from multiple angles, but there is only one that this writer can truthfully inhabit. I expect to hear about those I shortchanged in the comments.

    I have some reservations about the Northern idea. Would it be possible to maintain MSP’s exceptional gap between wages and cost of living if the cities became more popular? New York City Mayor Mike Bloomberg once referred to Manhattan as a luxury product, and luxury goods behave differently in economic theory. While comparisons between the Twin Cities and Manhattan are ludicrous, it’s possible to envision the Twin Cities as losing their budget option appeal if the market properly valued (or overestimated) our assets. There’s surely a benefit for those of us who are here now in living in a place that is underrated.

    Or might the concept of North simply divide, instead of unite? Would we end up with Team Midwest vs. Team North?

    And of course, there’s the real possibility that the idea just never gains momentum. This is the eventuality I can do the most about, and this article’s main contribution may simply be to keep the idea of North in the spotlight. But beyond that, I’d love to add to the debate about the idea. There is not necessarily a right or a wrong answer, nor may there be disagreement as to whether there’s a solution at all. But I think in this time of change, the discussion is worth having.

    This piece first appeared on the non-profit and volunteer run Streets.mn. Support Streets.mn by becoming a member.

    Alex Schieferdecker is a New York City native. He graduated from Macalester College with a major in Geography and an Urban Studies concentration. He’s currently stationed on the border between Minneapolis and Saint Paul, living the Green Line life. He also writes about Minnesota soccer for The Loon Call. His twitter handle is @theschief.

  • Rise of the Nation-States

    In this highly polarized political environment, states and localities, are ever more taking on the character of separate countries. Washington’s gridlock is increasingly matched by decisive, often “go it alone” polices from local authorities. Rather than create a brave, increasingly federalized second New Deal, the Obama years, particularly since the Republicans took control of the House in 2010, have seen discord rise to a level more akin to that left by James Buchanan, the last president before the Civil War, than Franklin Roosevelt.

    This makes understanding the sometimes-divergent economic and demographic trends of various states ever more important. With no compelling national vision, not only are politics more “local” but are increasingly distinct by region.

    The Main Event: Texas vs. California

    Today’s two leading economic models come, not surprisingly, from our two megastates, California and Texas. For its part, the Lone Star State follows a traditional American growth model, spread among a wide array of industries, notably energy, and prodded by population growth.

    Read the entire piece at The Orange County Register.

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

    Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is co-author of the “Demographia International Housing Affordability Survey” and author of “Demographia World Urban Areas” and “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.” He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He was appointed to the Amtrak Reform Council to fill the unexpired term of Governor Christine Todd Whitman and has served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

    USA map image by BigStockPhoto.

  • The Changing Geography Of Education, Income Growth And Poverty In America

    In this column, we often rate metropolitan areas for their performance over one year, five or at most 10. But measuring economic and social progress often requires a longer lens, spanning decades.

    Nowhere is this clearer than in education, which many claim is the key to higher-wage economic growth. Yet there are two sets of numbers that need to be distinguished: those states with the highest percentage of educated workers and the states that have increased their numbers most rapidly.

    On one side, the share of the population that is educated, states’ relative standings remain fairly similar to the way they were in 1970. Colorado, California, Connecticut, New Hampshire, New Jersey, Maryland and Virginia are all still above the national average for the percentage of the population over 25 with a bachelor’s degree, which has risen from 10.7% in 1970 to 29.6% in 2013. Massachusetts leads the nation with a remarkable 40.3% of its adult population having graduated from a four-year college. Overall, the “brainiest states” remain well ahead of their competitors in percentage terms.

    But in terms of growth in the raw numbers of educated people, most of these states have lagged. Indeed their high concentrations of college graduates may reflect their slow population growth, or the lack of opportunities for people without a bachelor’s degree.

    Educating The Sun Belt

    The states whose populations of college grads have grown the most are almost all in the South and the Sun Belt, led by Nevada with a 1,292% increase from 1970 to 2012 in the number of residents with four years of college or more, followed by Arizona (861%), Florida (743%) and Georgia (699%).

    Although they mostly still lag the best educated states, their large additions of educated workers appears to be transforming these former backwaters into centers of advanced industry and commerce. Since 1970, Texas has increased its population of college graduates by 555% while North Carolina’s surged 659%; in contrast, New York’s educated workforce expanded by 247% and Massachusetts’ by 341%, lagging the national average of 397% growth. California, whose economy grew rapidly through this period, was a shade above that with a 402% expansion in its population of college grads.

    The dichotomy is also pronounced when looking at the growth in the population of those with three years of college or more, including community college and certificate programs. Since 1970, for example, South Carolina expanded its population of such people by 746% and Texas by 592%; in contrast Massachusetts’ ranks of “some college” grew by 213% and California’s by 304%. Much of the growth among the leading states was tied to rapid overall population growth due to in-migration, particularly in states like Arizona and Nevada, which was accompanied by relatively rapid job growth.

    Brain Centers And Slower Growth

    The most educated states by percentage of college graduates are on the East Coast — Massachusetts, Connecticut, Maryland, Virginia, New Jersey — with the exception of Colorado. Many of these states also boasted among of the highest concentrations of college grads in 1970 (Colorado ranked first then with a 14.9% concentration). But with the exception of Virginia, since then the growth in the raw number of educated workers in these states has come at a slower rate than the Sun Belt states, amid their rapid population expansion. For example, since 1970 Connecticut’s population of college grads grew 282%, the fourth lowest rate in the nation and roughly half that of Texas’.

    Some might think that states with a higher proportion of educated workers would do better at creating new jobs. But since 1991, according to the Bureau of Labor Statistics, employment in both Massachusetts and New York has grown at 0.4% annual rate, and 0.8% in California. In contrast, Arizona’s annual job growth averaged 2.4% and Texas 2%.

    This suggests that having a high percentage of educated people is not enough to grow a jobs-rich economy, particularly if, as Robert Reich suggests, the demand for educated workers in the U.S. has dropped since 2000. It might seem tautological, but expanding economies  attract new educated workers.

    The Changing Face Of Poverty

    In 1959, the South was the poorest region in the country, with a poverty rate of 35.6%. By 1979, in the wake of the federal War on Poverty and strong economic growth, the poverty rate in the South had fallen by more than half, to 15.3%; by then, New York and Texas had roughly comparable poverty rates. (Note that I am not suggesting a linkage to the education trends discussed above, which mostly cover a later period.)

    The shift in the geography of poverty was underlined a few years ago when the Census released a new estimation of how to track it, the Supplemental Poverty Measure. (It takes into account the cost of a broader range of necessities than the standard measure, which is limited to food. It factors in geographic differences in housing costs, adds noncash benefits like nutrition assistance and housing subsidies to families’ incomes and subtracts taxes, child support payments and out of pocket medical expenses). The SPM placed 2 million more Americans below the poverty line as of 2012 than the standard measure; it dropped the poverty rate for those living in rural areas and raised it for those in metro areas and heavily urbanized states like California and New York. For the years 2010-12, California’s poverty rate jumps from slightly above average by the standard measure (16.5%) to the highest in the nation under the SPM (23.8%), followed by the District of Columbia (22.7%). Longtime laggard Mississippi, which ranks second worst in the country under the standard measure at 20.7%, falls back to the national average of 16% under the SPM, better than New York at 18.1%.

    Long-term income growth statistics over the same timespan as our education data also tell an interesting story. U.S. per capita incomes have risen 77% in inflation adjusted dollars from 1970 to 2013, according to the U.S. Bureau of Economic Analysis. The leader has been North Dakota, with a 160.4% jump to $53,182. Much of it seems tied to the energy boom – incomes have jumped 51% alone since 2000 — but it’s more than that. Its neighbor South Dakota, where oil production is much less important, ranks third in per capita growth over that span at 125.9%, as it built up a powerhouse financial services industry by loosening regulations. 

    Many of the regions where growth exceeded the national average have historically had low incomes. The former Confederacy accounts for eight of the top 20: Louisiana, Arkansas, Mississippi, Tennessee, Alabama, Virginia, Texas and North Carolina. (All still lag the national average income of $44,765, though, with the exception of Virginia). The Plains and Intermountain states account for another six (North Dakota, South Dakota, Wyoming, Minnesota, Oklahoma). The other big regional winner has been New England, with five of the top 20: New Hampshire, Vermont, Connecticut, Massachussetts and Maine. Washington, D.C., ranks 2nd, with growth of 129.4% to a nation-leading $75,329, showing us once again that our rulers treat themselves well.

    Among the laggards is California, where per capita income grew 62.4%, well below the national average. Several other Sun Belt “boom states” that rank highly on our list of states that have expanded their educated populations the fastest have done poorly in terms of income growth, including, Florida (41st), Arizona (48th), and in last place, Nevada. One complicating factor is that these states have a large proportion of people who earned their income in other, colder parts of the country. Not surprisingly, several of the laggards are in the Rust Belt, including Indiana (40th), Ohio (42nd), and Michigan (47th).

    The Future

    Clearly the economic and educational map of America is changing. There’s a movement of educated people — critical to many industries — to formerly backwater states. Over time jobs, too, are following this path.

    In the years ahead we can expect these trends to continue, or even accelerate. There is little reason to believe that states like California or New York are going to re-industrialize or reform their planning systems to help reduce housing prices. They will remain increasingly bifurcated between a very well-educated, affluent population clustered around the most elite industries and an underclass of poor, undereducated people. California, for example, ranks 14th in percentage of college graduates, down from 7th in 1970 but in terms of high school non-graduates it has soared from 44th to 2nd.

    This bifurcation doesn’t bode well for these places. People will continue to move to those places where young educated people are now going, notably in the South, the Great Plains, the Intermountain West, and, to some extent, parts of the Pacific Northwest.

    Forty years from now America will have many more centers of educational and economic excellence spread across the continent. This may involve a decline in the relative power of some regions, notably California, the Rust Belt and the Middle Atlantic States, but the rise of educated workers and employment elsewhere could help the country retain its competitiveness on an increasingly continental scale.

    The Biggest Brain Gain States Since 1970

    No. 1: Nevada

    Increase In Population Of College Grads, 1970-2013: 1,292%
    Pct. Of Adult Population With College Degree, 1970: 10.8%
    Pct. Of Adult Population With College Degree, 2013: 22.5%

    No. 2: Arizona

    Increase In Population Of College Grads: 861% 
    Pct. Of Population With College Degree, 1970: 12.6% 
    Pct. Of Population With College Degree, 2013: 27.4%

    No. 3: Florida

    Increase In Population Of College Grads: 743% 
    Pct. Of Population With College Degree, 1970: 10.3% 
    Pct. Of Population With College Degree, 2013: 27.2%

    No. 4: Georgia

    Increase In Population Of College Grads: 699%
    Pct. Of Population With College Degree, 1970: 9.2%
    Pct. Of Population With College Degree, 2013: 28.3%

    No. 5: North Carolina

    Increase In Population Of College Grads: 659% 
    Pct. Of Population With College Degree, 1970: 8.5% 
    Pct. Of Population With College Degree, 2013: 28.4%

    No. 6: Colorado

    Increase In Population Of College Grads: 617% 
    Pct. Of Population With College Degree, 1970: 14.9% 
    Pct. Of Population With College Degree, 2013: 37.8%

    No. 7: New Hampshire

    Increase In Population Of College Grads: 603% 
    Pct. Of Population With College Degree, 1970: 10.9% 
    Pct. Of Population With College Degree, 2013: 34.6%

    No. 8: Utah

    Increase In Population Of College Grads: 585% 
    Pct. Of Population With College Degree, 1970: 31.3% 
    Pct. Of Population With College Degree, 2013: 14.0%

    No. 9: Idaho

    Increase In Population Of College Grads: 563% 
    Pct. Of Population With College Degree, 1970: 10.0% 
    Pct. Of Population With College Degree, 2013: 26.2%

    No. 10: South Carolina

    Increase In Population Of College Grads: 556% 
    Pct. Of Population With College Degree, 1970: 9.0%
    Pct. Of Population With College Degree, 2013: 26.1%

    No. 11: Texas

    Increase In Population Of College Grads: 555% 
    Pct. Of Population With College Degree, 1970: 10.9%
    Pct. Of Population With College Degree, 2013: 27.5%

    No. 12: Alaska

    Increase In Population Of College Grads: 544% 
    Pct. Of Population With College Degree, 1970: 14.1%
    Pct. Of Population With College Degree, 2013: 28.0%

    No. 13: Virgina

    Increase In Population Of College Grads: 517% 
    Pct. Of Population With College Degree, 1970: 12.3%
    Pct. Of Population With College Degree, 2013: 36.1%

    No. 14: Washington

    Increase In Population Of College Grads: 513% 
    Pct. Of Population With College Degree, 1970: 12.7%
    Pct. Of Population With College Degree, 2013: 32.7%

    No. 15: Tennessee

    Increase In Population Of College Grads: 495%
    Pct. Of Population With College Degree, 1970: 7.9%
    Pct. Of Population With College Degree, 2013: 24.8%

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

    Photo: 1980s-era Reno, Nevada. Public domain.

  • The Three Faces of Populism

    More than at any other time in recent memory, American politics now are centered on class and the declining prospects of the middle class. This is no longer just an issue for longtime leftists or Democratic or right-wing propagandists. It’s a reality so large that even the most detached and self-satisfied Republicans must acknowledge it.

    The Left’s new superstar, New York City Mayor Bill de Blasio, identifies inequality as “the dominant issue in our public discourse” but similar assessments have recently been coming from such unlikely sources as GOP Senate Majority Leader Mitch McConnell, Jeb Bush and even Mitt Romney.

    So, if populism will become a dominant theme in the next election, what form will it take? Populism itself is more a sentiment than a program; it reflects people’s deep-seated fears about the future and a festering resentment of the seemingly unassailable power of financial and other corporate elites.

    Read the entire piece at The Orange County Register.

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

  • Europe Is Still a Second-Rate Power

    In the years after the Cold War, much was written about Europe’s emergence as the third great force in the global political economy, alongside Asia and the United States. Some, such as former French President Francois Mitterand’s eminence grise Jacques Attali, went even further: in his 1991 book Millenium Attali predicted that in the 21st century, “Japan and Europe may supplant the United States as the chief superpowers.”

    This notion of a fading America has been embraced among some here as well, by authors such as Jeremy Rifkin who has written extensively about a “European dream” supplanting the American one on a global scale. In 2008, CNN anchor Fareed Zakaria predicted the rise of what he called “the post-American world,” with the U.S. still preeminent but losing ground, particularly to emerging countries in Asia. This view is widely held in American elite circles, including many people in or close to the Obama administration.

    Yet something funny happened on the road to a post-American era: it didn’t happen. Even under two of the most incompetent administrations in our country’s long history, we are headed not to a “post-American” world, but more likely a “post-European” one.

    The Fading of the “European Dream”

    Fifty years ago, when Europe’s economy was growing faster than America’s on a consistent basis, and Asia was just emerging, the case for the continent’s ascendency seemed much stronger. But for the past 30 years Europe’s economy has been generally performing worse than that of the U.S. , not to mention rising Asian powers, including China and India.

    The Great Recession hit all economies, but recently American growth rates have consistently outperformed those on the continent. By 2013 Europe was still experiencing 12 percent unemployment—a rate that exceeds ours at the height of the U.S. recession. European household debt, notes analyst Morgan Housel, has been increasing while that of American households has dropped.

    The roots of Europe’s poor economy lies in large part in the very welfare state so admired by some progressives. To be sure, generous benefits have helped make Europe somewhat less unequal than the United States. But in the process Europe has become a very expensive place to do business. High taxes and welfare costs, tolerable in an efficient economy like Germany’s, have caught up with weaker, less productive countries such as Italy, Greece, and even France.

    This weakness is most evident in two critical sectors—energy and technology—critical to modern economies. Europe’s much ballyhooed attempt to go “green” has raised energy costs throughout the continent. Ultimately, the effects of high energy prices tend to fall on the middle and working classes, as well as on manufacturing industries, which are are now scouring the world, including the southern United States, for lower cost alternatives.

    Europe is also vastly underrepresented among the rising players in the tech world . The continent still possesses some influential industrial companies—Siemens, BMW, Volkswagen, Bayer, Royal Dutch Shell, Daimler—but it has created no European equivalent to Google, Facebook, Apple, Amazon, Microsoft, Intel, or even IBM. Not one of the world’s 14 largest tech companies by revenue is based in Europe. Five are in Asia, nine in the United States. European officials have tried to curb these often intrusive and arrogant companies, but the problem lies not in overstrong American competition but Europe’s inability to grow and nurture successful young companies.

    The Barrel of the Gun

    It’s understandable that a continent that almost destroyed itself twice with wars in the 20th century would shy away from the use of military force. This was reinforced by decades of reliance on U.S. military might for security. This situation in turn nurtured a strong anti-military, pacifistic streak that resulted in a region with a large economy but with little to offer on the battlefield. England is the only European country to possess one of the world’s top five military budgets. Besides the U.S., by far the largest military power, the top four include China, Russia, and Saudi Arabia. The three largest economies using the Euro—France, Germany, and Italy—spend one third less on defense combined than the U.S. Increasingly the only counterweight to U.S. power will be the emerging Sino-Russian alliance, which matches Russia’s still prodigious arms production with China’s almost limitless bankroll.

    Demilitarization has its perils. As Chairman Mao once noted, “political power grows out of the barrel of a gun.” Sure we should all prefer, like President Obama, to employ “soft power” rather than going in with guns blazing a la George Bush. Yet the world is still full of well-armed people who don’t play by such civilized rules. A hard-baller like Vladimir Putin knows a bluffer when he sees one and knows he can do what he wants, in the Ukraine or elsewhere, without fear of European intervention or even fear that the E.U. might help arm Kiev’s forces. Similarly, Jihadis have learned that you can do what you want to Europeans, knowing that some countries—notably France, Germany, Spain and Italy—will willingly pay ransoms to free their citizens. Kidnap a German and get rich; do it to an American, Brit or, god forbid, an Israeli, and there’s eventually hell to pay.

    The Demographic Disaster

    Europe’s biggest problem, however, happens inside the boudoir. Along with Japan, Europe has pioneered low fertility. European countries average a fertility rate of 1.5, well below the 2.1 children per family needed to replace their population.

    The problem is most acute in Italy, Spain, and, most important, Germany. The number of German babies born annually has dropped below the levels at the turn of the last century. Not surprisingly the U.N. expects Germany’s population to drop 9 percent by 2050. Germany may have fewer children than it did in 1900, but Spain’s total number of births has dropped well below the rates of 1858, and may match those of the 18th century.

    This reflects something of a hangover from the disasters inflicted by Europeans on themselves in the last century. After decades of war and conflict, notes historian Tony Judt, Europeans simply wanted peace and quiet. In post-war Europe, every subsequent generation has been a “me generation,” focusing less on family and religion and more on material goods and financial security. Today Europe is one of the most irreligious places on the planet; there are more atheists in Germany, by some counts, than in the entire United States, a country with nearly four times as many people.

    To maintain their workforces and create new consumers, European countries have by necessity made a priority of bringing in more immigrants. By 2025 Germany’s economy will need six million additional workers; this means 200,000 new migrants every year to keep its economic engine humming, according to government estimates . The situation gets worse from there, and by 2050 Germany’s overall workforce (PDF) is expected to drop 30 percent below 2010 levels, reducing it from 54 to 38 million. In the same time period the American workforce is expected grow by an additional 35 million workers.

    For years, Germany and other western European countries have depended on newcomers from Turkey and other Islamic countries to drive their economy. But Islamic migration is widely believed to have failed to deliver workers with enough skills, not to mention creating ever more dire cultural and social divisions. Concerned about Islamic immigration, Germans are now relying , as they did back in the ’60s, on the diminishing pool of skilled workers from rapidly aging states such as Spain and Italy, as well as from eastern Europe. These economically beleaguered countries have become a major source of new migrants to Germany, numbering roughly one million in 2011, a 20 percent increase from the previous year.

    In the process, much of southern and eastern Europe is gradually depopulating. By 2050, Bulgaria is expected to lose 27 percent of its population, while Latvia, Lithuania, and Romania are expected to lose more than 10 percent of theirs. By 2050 the populations of almost the all of Eastern Europe will fall, according to recent projections.

    Then there is Europe’s rapidly aging population, a natural product of low birth rates, which also imposes enormous burdens on the region’s economy. A proposal by German Chancellor Angela Merkel would impose a one percent income tax as a “demographic reserve” to make up for rising pension costs. “We have to consider the time after 2030, when the baby boomers of the ’50s and ’60s are retired and costing us more in health and care costs,” explained Gunter Krings, who drafted the new proposal for Germany’s ruling Christian Democrats.

    Ultimately the next generation will be the biggest losers in Europe’s decline. Even though birthrates are very low, those young people now entering the workforce face extraordinarily high levels of unemployment ranging 20 percent and higher in countries such as Spain, Greece and France. No surprise that Europe’s young are widely described as “the lost generation.”

    Political Chaos

    Europe’s current political crisis has spawned a new level of political uncertainty most clearly seen in the rise of radical new parties—such as Greece’s Syriza—on both right and left. Two forces driving this shift in political balance have been immigration and a growing grassroots rebellion, such as has emerged in Greece, over EU budget and regulatory policies. In Spain, for example, the fastest rising party, Podemos, borrows directly from Syriza’s brand of quasi-Marxist radicalism.

    But most of the thunder in other parts of Europe comes from the right. Many Europeans have come to see the EU not as a great unified superstate but instead as an oppressive, unelected, despotic power. The “common European home” dreamed of by Soviet President Mikhail Gorbachev is becoming a ramshackle collection of apartments, with neighbors who increasingly don’t get along and look elsewhere for succor.

    Another key driver of opposition from the right is the EU’s generally lenient view about immigration. Despite their growing dependence on immigrants, Europeans are increasingly resentful of the newcomers, particularly those from Africa and the Middle East. Some two thirds of Spaniards, Italians, and British citizens, according to an Ipsos poll, believe there are already “too many immigrants,” while majorities in Germany, Russia, and Turkey also hold negative views about newcomers in their midst.

    In France the long-standing fear of losing control of national destiny has combined with growing fear over immigration, stoked by the recent terrorist incidents there. This has allowed the far right National Front’s Marine Le Pen to emerge as an unlikely front runner in the next race for president. The rise of the United Kingdom’s Independence Party stems from a similar concern about threats to Britain’s sovereignty as well as angst over immigration, particularly among working and middle class voters. Even countries such as Denmark and the Netherlands, once considered paragons of liberalism, have seen the rise of similarly minded rightist movements.

    Back to Bipolarity

    Buffeted by a weak economy and a welter of social ills, the aforementioned visions of Jacques Attali and American Europhiles now seem like wishful thinking, if not delusional. In reality in everything from culture and high tech to military prowess, the continent is rapidly becoming a peripheral global power at best. Only Russia, the most powerful military power and the continent’s primary source of energy, seems to have seen the light. President Putin has made this clear as he develops closer ties to China, with whom he shares an authoritarian philosophy.

    Other countries on the fringe of the continent, such as Greece and Serbia, also are looking increasingly at Russia, and its emergent Chinese alliance, rather than the E.U. Chinese plans for new bullet trains to Central Asia and eastern Europe could further enhance the Middle Kingdom’s linkage to Eurasia and central Asia.

    “So what about us?” Anglo-Americans (culturally if not ethnically) may ask. In a globalized world that speaks and writes in English, the Anglosphere—comprising both the U.K. and its various colonial offspring, including the United States—retains some natural advantages. This is where the most elite colleges and universities are located, and where the top financial, technology, and key business service firms are concentrated. Equally important, the Anglosphere also controls much of what the developing countries will most need in the future—food—through the unsurpassed fecundity of the United States, Canada, Australia, and New Zealand.

    Demographics and a unique ability to absorb a wide range of immigrants make the Anglosphere economically and demographically more vibrant than Europe. By 2050, the Anglosphere will be home to upwards of 550 million people, the largest population grouping outside China and India. English-speakers may not straddle the world like the 19th century empire-makers, but they are likely to remain first among equals well into the current century.

    Ultimately, the various countries of the world will have to choose between the Anglosphere and the Chinese-led authoritarian alliance. This will become something of a new version of the Cold War (but with China not Russia in the lead position), with each bloc seeking to win influence across the world. Anglophone India and Japan, for example, may choose the Anglosphere due to democratic traditions and a feeling of foreboding about a future forged by Chinese economic and, increasingly, military power.

    On the other hand, Latin American nations like Brazil and Argentina may consider “yankee imperialism” a greater threat to their autonomy and choose instead to embrace the Middle Kingdom and its Russian ally. This may also hold true for much of Africa, where China is making deep inroads. The Chinese-led New Development Bank and its $40 billion “Marshall Plan” for infrastructure in developing countries represents a bold move to secure ever more influence in the emerging world order.

    In this bipolar world forged in the context of U.S. vs China competition, Europe will likely be a bit player, wooed by both but essential to neither. In the 21st century, the road to power will not run through Paris or Berlin but through Beijing and Washington. Like the great leaders of the post-war era, American politicians and statesmen need to acknowledge the new reality of the post-European world and begin to address its implications.

    This piece first appeared at The Daily Beast.

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

  • 50 Years of US Poverty: 1960 to 2010

    Although inequality is the current focus of concern with income, it is in the end a story of the rich, the middle and the poor, who of course have not gone away.  It is valuable to remind ourselves, particularly the young, about how pervasive poverty was 50 years ago, how poverty declined markedly between 1960 and 1980, after which it has risen again. Most important is to understand what led to the poverty reduction between 1960 and 1980, in order to further understand the power and lure of forces which would return us to the good old days of 1960, or before!. This piece is inspired by the pioneering book from 1970 on the Geography of Poverty, with Ernest Wohlenberg, based on 1960 data.  The data updates come mainly from US Census Bureau. 

    I start with the basic data, the numbers of the poor and the percent below the poverty level for 1960, for 1980 and for 2010, plus a summary table.  These are supplemented by some maps of the poverty rates for whites and for blacks (or non-whites), and for the elderly (only available for 1980).

    Overall for the nation the poverty rate fell from 22% in 1960 steeply down to 12% in 1980 then moved up moderately to 15% during the current era of rising inequality.  I look first at broad patterns of relative poverty for the three times, and then turn to the more interesting or surprising story of the differences in the reduction of poverty across the states, and then the story for whites, blacks and the elderly.

    Broad Patterns 

    The United States was so different in 1960, with a poor rural south and southwest, and a fairly poor Great Plains. (Figure 1). While the west coast was better off and metropolitan, the main area of lower poverty was the historic urban-industrial core from IL and WI to southern New England, where unionized industry prevailed. CT was richest with less than 10 percent poverty; this compared to MS with a poverty rate of 55! The deep south was amazingly poor and not just for Blacks. 

    Changes by 1979 were indeed revolutionary (Figure 2).  Areas of lower poverty extended from the old industrial core to the rest of New England and down Megalapolis to Virginia, and to the “old northwest”, MN, WI, IA, and to most of the US West. Most improved were the corners of the south, TX, OK, and FL, NC, due to energy development, new industries moving to the south and poor blacks escaping to the north.  Only a small lower Mississippi region (AR, LA, MS, and AL) remained fairly poor.

    2010 saw a rather general resurgence of poverty – related certainly to globalization and industrial off shoring, deindustrialization in the old northeastern core, and greater poverty across the southern tier from CA to FL, in part related to heavy immigration from Latin America.  Some of this shift could, in my opinion, be pegged as well to the shift to more conservative Republican Party rule.

     

    Numbers of States
    White Black Over 65
    Rate 1960 1980 2010   1980 1980 1980
    <12% 2 27 14 41 0 11
    12-18% 19 19 30 10 7 21
    18-24% 11 5 7 8 8
    24-40% 14 36 11
    >40% 5

    Poverty rates fell broadly between 1960 and 1980, especially for the half of states with 1960 rates above the 22% average level, while the number of states with rates below the 1980 average of 12% rose from 2 to 27 states. Rates increased modestly in the ensuing years in the then states with the lowest rates.

    The Relative Fates of States    

    Several states fared relatively best, with poverty rates falling at least in half or more in 2010 than in 1980. These are in two disparate sets: first southern states with very high poverty in 1960: AL, AR, KY, MS, NC, and VA, and another northern set  in ME, NE, NH, ND, SD, UT, and VT.  Other states in which poverty rates fell at least in half, but were lower in 1980 than in 2010 include GA, IA, SC, and TN. FL and TX poverty rates fell to less than half the 1960 rates in 1980, but poverty growth by 2010 showed some back-tracking. At the other extreme three states actually had higher rates of poverty in 2010 than way back in 1960: CA, NV, and NY.

    The particular gains for the south reflect two dominant forces, the out-migration of large numbers of black people to the north and west, slowing the reduction in poverty rates for the north and west, as well as the successful shift of industry from the north to the south, both forces including millions of families and of jobs.  TX and FL stand out because of high migration from Latin America. The exceptional story of CA and NY is similarly one of massive migration of minorities from the rest of the country but of even larger immigration from Latin America. The opposite story of very low poverty in NH, VT, and ME is one of overflow of opportunities and wealth from Massachusetts. The reason for ND, SD, NE, and UT is pre-oil development, and reflects broader forces for poverty reduction.

    Poverty in White and Black

    White poverty rates fell from 17 to 9.4 in 1979 but then edged up to 10% in 2010. At the same time, black poverty rates fell from a horrendous 55% in 1959 to just under 30% in 1979 and appears to have remained at 30 in 2010. Note that black poverty rates remain three times that of whites, and are comparatively as high as they were in 1959.  The gap remains worse (Figure 6) in the south and extreme generally across the north, but much lower in places like the Dakotas and upper New England in 1979 in part because of small numbers, and also due to the fact that the 1959 rates included Native Americans while the 1979 numbers did not.  The only good estimates for white poverty were for 1979, and reveal a remarkable uniformity across much of the country, lagging slightly in Appalachia-Ozarkia. (Figure 5) 

    Meanwhile, rates for blacks fell more in the parts of the South SC,  VA, NC, FL, and TX, but even more so  in the historic ”black belt” of AL, LA, MS, AR, and SC where the poverty rate dropped from 77 to 33 %. Less improvement is evident for early northern destinations of blacks from the south: NY, IL, MI, OH, and NJ, or in CA and OR.

    Please refer back to the table. While whites had rates below 12% in 46 states, for blacks the number is 0.   While 0 states had white rates above 18%, 44 states had black rates above 18%. This is shameful.  I am unable to find any positive spin for this story. The racial gap remains deeply entrenched.

    I close with a variant of the 2010 poverty map, showing the absolute numbers as well as the rates (Figure 8). Poverty remains serious across the southern tier, especially on CA, TX and GA, but also in the north, especially in NY and the eastern Great Lakes states.  While direct causality is unlikely, one can understand the worry of the increased numbers and shares of the poor clear across the southern tier of the country- CA to FL.     

    Poverty of the Elderly

    Compared to the generally poor picture of black poverty, the story  for the elderly is much  more positive. If anyone won the “war on poverty”, it was the elderly. Is this because of their political clout? Not just that, but it obviously matters. The data for 1959 and 2010 are not fully comparable, so the only map is for 1979.  But the elderly poverty rate in 1959 was a striking 46 percent, not that much below the outcast blacks, so the fall in the rate to under 15% in 1979 is quite astonishing. The reasons for this are discussed below. Here we can compare the pattern for elderly with that for all persons.
    Actually the correlation between age and poverty is quite high; elderly rates average about 5% above those for all people.  CA, AZ, FL, and NY achieved lower senior poverty rates in 1979 than for all persons, probably a result of selective migration, perhaps a role of political influence in AZ and FL.

    Why did poverty fall so much from 1960 to 1980, and then increase again? This is no big mystery! The two powerful and complementary forces reducing poverty were America’s robust economic expansion, in the 1960s especially, combined with social programs, starting with the New Deal (especially Social Security and the minimum wage), and the era of union growth, followed by the 60s Civil Rights revolution, including women’s rights, and the Great Society’s War on Poverty, above all Medicare and Medicaid. Of course these programs had to be paid for, but this was accomplished by vast economic investment and gains in productivity of the economy.

    The elderly were a huge part of poverty in 1960 but a relatively low part by 1980.  And despite the nation’s ongoing inability to overcome racial discrimination and unrest, the social programs have greatly helped the emergence  of a black middle class, as much in the south as in the north.

    Factoring in the Cost of Living

    But wait! Isn’t the cost of living higher in New York and San Francisco than in West Virginia and Nebraska?  Should this affect the estimates of poverty across the state?  The answer is yes, and fortunately, the Census Bureau has just completed a new series of poverty estimates for 2010-2012 adjusting for variations in the cost of living, and compared these to their official figures.  The effects are not trivial.

    Essentially, the cost of living is significantly higher in the biggest, densest and richest metropolitan cores, and correspondingly lower is most of the rest of the country. The higher costs in these few giant but populous places is sufficient to raise the number in poverty nationally, by 2.6 million, raising the US rate from 15.1 to 16 percent.

    The critical states for underestimating poverty are actually few: CA, 2,750,000 more, up 7.3%: NJ, 415,000 more, up 4.8%; FL, 771,000 more, 4.1%; MD, up 195,000, up 3.3%; NV, 102,000, 3.8%; and NY, up 308,000, 1.6%. California dominates the rise in poverty, by itself adding more poor than the country as a whole.  But some other states with big metropolitan areas do not suffer this cost of living adjustment: TX, -338,000. -1.3%; OH, -252,000, -2.2%; MI, -130,000, -1.3%; IN -106,000, -1.7%; and NC, -249,000, 2.6%. I do not know that these states have in common, perhaps less stringent growth management and lower tax rates.  

    There are seven states with a drop in the number of poor of 3% or more after adjusting for cost of living,  including MS, -136,000, -4.6%; NM, -86,000, -4.2%; WV, -75,000, -4.3%; and KY, -165,000, -3.8%.  As a consequence, we end up with a US pattern that is counter-intuitive, and contrary to conventional long-term wisdom about poverty. Big, rich mega-urban California earns the nation’s highest poverty rate as well as in total numbers (24%), followed by DC with 22.7; NV, 19.8; and FL, 19.5.  Long maligned poor states like MS has the same rate as the country, at 16%, AR, 16.5; SC, 15.8; and especially extreme, WV, 12.9 and KY, 13.6. Rather than having the lowest poverty rate at 9.6, CT moves up to 12.5, while IA, 8.6; ND, 9.2; WY, 9.2; and MN, 9.7, fall below 10% poor.  Counter-argument can be made that the story is not so different as first appears, if the richest states with higher cost of living also tend to  have higher levels of services to those in poverty. But this has not been measured. 

    Perusing the  two new maps of the percent poor in 2010,cost of living  adjusted, and the change in rates and numbers, highlights the key role of California-Nevada and of Megalapolis-Florida, historic cores of urban wealth, are also incubators of higher poverty. This also supports the idea that that immigration from Latin America must play a role in the heightened poverty along most of the southern border, and especially California.  The curse of poverty remains everywhere, but it’s clearly become more severe in some places, and less so in others.

    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).

  • The New New Thing: Suburban Bunker Buildings

    I have a theory about where the next culturally dynamic neighborhoods are likely to emerge and which building types will be the engine of that transformation. It may not be exactly what most people expect.

    As American industry receded in the later half of the Twentieth Century it left behind an alluvial delta of redundant buildings that sat vacant for years, no longer useful or productive. All effort was focused on building the new suburbs. These abandoned inner city warehouse districts became so cheap and run down that they were eventually colonized by artists, immigrants, and bohemians seeking cheap rent and an environment where landlords and municipal authorities looked the other way. They weren’t necessarily safe, or clean, or attractive, but they provided a kind of freedom for the people who lived there.

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    The photos above are of friends in their 8,000 square foot live/work space in Philadelphia. The general dismissive attitude of many suburbanites is that such people exist outside the mainstream and are irrelevant to the lives of “real” people. Contrary to this common misconception all the creative types I know are highly skilled and hold down jobs as welders, carpenters, accountants, and technicians of various kinds. I know a couple who spend half the year in video production making car commercials and then pursue their art during the long hiatus. I know another guy who worked like a dog for a few years after college at a prototype lab for the pharmaceutical industry in order to pay off all his student loans and other debts. Now he’s free to do what he really wants without the burden of debt. These folks simply choose not to spend their money on a mortgage on a suburban home with multiple car payments, but their lives and economic productivity are very real.

    Technically, living in an old warehouse involves breaking a hundred different rules and regulations, but they’ve been there for years and no one cares. It’s that kind of space and that kind of neighborhood. Unfortunately, the area is rapidly gentrifying and they may be priced out of the space soon as nearby warehouses are being converted to luxury lofts. That begs the question – where are the cheap funky emerging neighborhoods these days? You can’t live and work this way in a suburban tract home. Neither the physical space nor the local culture will allow it.

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    A couple of years ago I was in Salt Lake City having lunch with a prominent well-connected real estate agent. She’s the kind of charming knowledgable person I always seek out so it was a pleasure to see her again. I had explored various parts of Salt Lake from the downtown core all the way out to Daybreak in the distant suburbs. She spoke of the urban renaissance, the new streetcar system, and the many new developments in previously blighted areas. But I explained that the part of town that really interested me was the neglected and undervalued areas in the lackluster middle distance just beyond downtown that were neither sophisticated and urbane nor verdant and domestic. These semi-commercial, vaguely industrial, half-assed residential zones were neither fish, nor flesh, nor fowl. But they had the two qualities that fascinate me: they’re relatively inexpensive and generally ignored by the Upright Citizens Brigade. They’re close enough to downtown and the university that you could still ride a bicycle to access culture and employment, but just a short drive to suburban conveniences farther out. It’s the wrong combination for people with conventional tastes, but the perfect sweet spot for a certain kind of subculture that needs to be left alone in order to thrive. They need wiggle room that doesn’t exist in the highly supervised downtown or manicured suburbs. And many of these brick and concrete buildings are little bunkers where you could do just about anything within the raw space. They offer the one thing that’s in terribly short supply. Slack. 

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    I sent these photos over to her and explained that these nondescript aging suburban bunker buildings were the next great building type. She was gracious and polite, but she obviously thought I was insane. Now granted, she isn’t the only person to come into contact with me to come to this conclusion – and not just because of my irregular taste in property.

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    This conversation came back to me this afternoon as I walked past a building that used to house a discount bakery outlet. As a much younger and poorer person twenty years ago I used to frequent this establishment myself to buy day old bread and not-quite-expired donuts. This month the bunker building was transformed into an upscale furniture store with in-house designer services. I poked around and explored the shop. I had no particular interest in the furniture itself and don’t think this kind of business could succeed anyplace other than a prosperous part of town. But it was the bones of the building itself that fascinated me.

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    It’s a big flexible durable space like the old inner city industrial buildings. The walls and floor are concrete and the ceilings are exposed wood and steel. The former loading docks make perfectly segmented rooms with high ceilings and the ability to adapt to many uses including indoor/outdoor applications. Paint and some inexpensive drywall partitions transform the space very quickly. The front room was mostly glass and open to the parking lot, but the vast majority of the building was entirely private. This is a perfect example of the new new thing. This is where the starving bohemians will end up if they want to continue doing their work in a big, affordable, mostly unregulated spot. In an expensive real estate market people will colonize any vacant building and make their luxury furniture showroom work. But in depressed suburban markets these buildings are ripe for economically displaced artists. Gather enough interesting and entrepreneurial types in one such neighborhood and it could be the social and cultural engine that pulls up an entire dying suburban strip.

    John Sanphillippo lives in San Francisco and blogs about urbanism, adaptation, and resilience at granolashotgun.com. He’s a member of the Congress for New Urbanism, films videos for faircompanies.com, and is a regular contributor to Strongtowns.org. He earns his living by buying, renovating, and renting undervalued properties in places that have good long term prospects. He is a graduate of Rutgers University.

  • America Needs The Texas Economy To Keep On Rolling

    In the last decade, Texas emerged as America’s new land of opportunity — if you will, America’s America. Since the start of the recession, the Lone Star State has been responsible for the majority of employment growth in the country. Between November  2007 and November 2014, the United States gained  a net 2.1 million jobs, with 1.2 million alone in Texas.

    Yet with the recent steep drop in oil prices, the Texas economy faces extreme headwinds that could even spark something of a downturn. A repeat of the 1980s oil bust isn’t likely, says Comerica Bank economist Robert Dye, but he expects much slower growth, particularly for formerly red-hot Houston, an easing of home prices and, likely, a slowdown of in-migration.

    Some blue state commentators might view Texas’ prospective decline as good news. Some, like Paul Krugman, have spent years arguing that the state’s success has little to do with its much-touted business-friendly climate of light regulation and low taxes, but rather, simply mass in-migration by people seeking cheaper housing. Schadenfreude is palpable in the writings of progressive journalists like the Los Angeles Times’ Michael Hiltzik, who recently crowed that falling energy prices may finally “snuff out” the detested “Texas miracle.”

    Such attitudes are short-sighted. It is unlikely that the American economy can sustain a healthy rate of growth without the kind of production-based strength that has powered Texas, as well as Ohio, North Dakota and Louisiana. De-industrializing states like California or New York may enjoy asset bubbles that benefit the wealthy and generate “knowledge workers” jobs for the well-educated (nationwide, professional and business services employment rose by 196,000 from October 2007 through October 2014), but they cannot do much to provide opportunities for the majority of the population.

    By their nature, industries like manufacturing, energy, and housing have been primary creators of opportunities for the middle and working classes. Up until now, energy  has been a consistent job-gainer since the recession, adding  199,000 positions from October 2007 through October 2014, says Dan Hamilton, an economist at California Lutheran University. Manufacturing has not recovered all the jobs lost in the recession, but last year it added 170,000 new positions through October. Construction, another sector that was hard-hit in the recession, grew by 213,000 jobs last year through October. The recovery of these industries has been critical to reducing unemployment and bringing the first glimmer of hope to many, particularly in the long suffering Great Lakes.

    Reducing the price of gas will not change the structure of the long-stagnant economies of the coastal states; job growth rates in these places have been meager for decades. Lower oil prices may help many families pay their bills in the short run. But there’s also pain in low prices for a country that was rapidly becoming an energy superpower, largely due to the efforts of Texans.

    Already the decline in the energy economy, which supports almost 1.3 million manufacturing jobs, is hurting manufacturers of steel, construction materials and drilling equipment, such as Caterpillar. Separately, the strengthening of the dollar promises harder times ahead for exporters  in the industrial sector, and greater price competition from abroad, amid weakening overseas demand. Factory activity is slowing, though key indicators like the ISM PMI are still signaling that output is expanding.

    Right now in Texas, of course, the pain is mounting in the energy sector. Growth seems certain to slow in places such as Houston, which Comerica’s Dye says is “ground zero in the down-draft.” Also vulnerable will be San Antonio, the major beneficiary of the nearby Eagle Ford shale. The impacts may be worst in West Texas oil patch towns like Midland, where energy is essentially the economy.

    Yet there remain reasons for optimism. Cheaper energy prices will be a boon for the petrochemical and refining industries, which are thick on the ground around Houston and other parts of the Gulf Coast. The Houston area is not seeing anything like the madcap office and housing construction that occurred during the oil boom of the 1980s. Between 1982 and 1986 the metro area added 71 million square feet of office space; including what is now being built, the area has added just 28 million square feet since 2010. Compared to the 1980s, the residential market is also relatively tight, with relatively little speculative building.

    The local and state economies have also become far more diversified. Houston is now the nation’s largest export hub. The city also is home to the Texas Medical Center, often described as the world’s largest. Dallas has become a major corporate hub and Austin is developing into a serious rival to Northern California’s tech sector.

    Texas needs to increase this diversification given that oil prices could remain low for quite a while, and even drop further after their recent recovery.

    This is not to deny that the state is facing hard times. Energy accounts for 411,372 jobs in Texas, about 3.2% of the statewide total, according to figures from Austin economist Brian Kelsey quoted in the Austin American-Statesman. If oil and gas industry earnings in Texas fall 20%, Kelsey estimates the state could lose half of those jobs and $13.5 billion in total earnings.

    Low prices also could also devastate the state budget, which is heavily reliant on energy industry revenues. A reduction in state spending could have damaging consequences in a place that has tended to prefer low taxes to investing in critical infrastructure, and is already struggling to accommodate break-neck growth. The only good news here is that slower population growth might mitigate some of the turndown in spending, if it indeed occurs.

    But in my mind, the biggest asset of Texas is Texans. Having spent a great deal a time there, the contrasts with my adopted home state of California are remarkable. No businessperson I spoke to in Houston or Dallas is even remotely contemplating a move elsewhere; Houstonians often brag about how they survived the ‘80s bust, wearing those hard times as a badge of honor.

    To be sure, Texans can be obnoxiously arrogant about their state, and have a peculiar talent for a kind of braggadocio that drives other Americans a bit crazy. But they are also our greatest regional asset, the one big state where America remains America, if only more so.

    This piece first appeared at Forbes.

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

    Photo:
    “West Texas Pumpjack” by Eric Kounce TexasRaiser – Located south of Midland, Texas. Licensed under Public Domain via Wikimedia Commons.

  • Go East, Young Southern California Workers

    Do the middle class and working class have a future in the Southland? If they do, that future will be largely determined in the Inland Empire, the one corner of Southern California that seems able to accommodate large-scale growth in population and jobs. If Southern California’s economy is going to grow, it will need a strong Inland Empire.

    The calculation starts with the basics of the labor market. Simply put, Los Angeles and Orange counties mostly have become too expensive for many middle-skilled workers. The Riverside-San Bernardino area has emerged as a key labor supplier to the coastal counties, with upward of 15 percent to 25 percent of workers commuting to the coastal counties.

    In a new report recently released by National Core, a Rancho Cucamonga nonprofit that develops low-income housing, I and my colleagues, demographer Wendell Cox and analyst Mark Schill, explored the challenges facing the region. Although we found many reasons for concern, the region’s overall condition and its long-term prospects may be better than many might suspect.

    Population trends

    The region’s once-explosive growth has slowed considerably. From 1945-2010, the area’s population soared from 265,000 to 4.25 million. Already the nation’s 12th-largest metropolitan area, the I.E. could pass San Francisco and Boston by 2020 (unless faster-growing Phoenix does so first).

    Yet, contrary to expectations (and, perhaps, hope among anti-sprawl campaigners), the area continues to be a beacon for people from the rest of the region. There is a notion, widely expressed in the mainstream media, that Southern California’s growth will now focus more on the urban core around Downtown Los Angeles. Yet, as is often the case, what planners and pundits desire is not widely shared by the vast majority of people.

    People continue to vote for the Inland Empire – and other peripheral areas – with their feet. Census Bureau data indicates that, from 2007-11, nearly 35,000 more residents moved from Los Angeles County to the Inland Empire than moved in the other direction. There was also a net movement of more than 9,000 from Orange County and more than 4,000 net migration from San Diego County.

    Several long-standing demographic trends favor a continued shift to the Inland region, according to Cox and Schill. Immigrants and their offspring may prove the critical factor. Over the past decade, the Inland region dramatically increased its population of foreign-born residents, more than three times the number and at nearly 18 times the rate of the coastal counties.

    The influx of immigrants and their children is largely responsible for the region’s relatively young population, compared with the rest of Southern California. As recently as 2000, the proportion of population ages 5-14 in Los Angeles and Orange counties stood at 16 percent, the sixth-highest level among the nation’s 52 largest metropolitan areas. Thirteen years later, that proportion had dropped to 12.8 percent, 33rd among the 52 largest metropolitan areas. In terms of a dropping share of youngsters, the area experienced a 20 percent reduction, the largest in the nation.

    In contrast, the Inland Empire remains a bastion of familialism, with 15.3 percent of the population aged 5-14, among the highest levels in the nation. This follows a general pattern; according to recent analysis of Census data, high-cost areas tend to repel families. Of the nation’s most expensive areas, such as the Bay Area, New York and Boston, all tend to have well below national norms in terms of families among their populations.

    Perhaps more surprising, younger educated workers also are heading to the region. In fact, from 2011-13, according to American Community Survey data, Riverside-San Bernardino witnessed the 12th-largest increase among the 52 major metro areas in the share of college-educated residents ages 25-34. No major California metro area, including Silicon Valley, could match it. From 2000-13, the Inland region experienced a 91 percent jump in population with bachelor or higher degrees, just less than twice the increase for either Orange or Los Angeles counties.

    Overall, the I.E. has become something of a growth area for millennials – basically, adults ages 20-29. San Bernardino-Riverside ranked second among 52 metro areas, adding 50,000 millennials, an 8.3 percent increase since 2010. Los Angeles and Orange counties – older, settled areas with far lower population growth – together registered 18th.

    Economic Restructuring

    These trends also may reflect improving prospects for the region’s economic recovery. The area remains some 30,000 jobs below its 2007 level, notes California Lutheran University economist Dan Hamilton, but is now growing faster than the rest of the Southland. The region created jobs over the past year at a 2.2 percent rate, well above the 2.0 percent increase in Orange County and almost twice that of L.A.’s 1.3 percent. Foreclosures have diminished to the lowest levels since 2007 and appear back to something resembling normalcy.

    One important source of new employment is grass-roots entrepreneurship. Overall, the Inland Empire accounted for a large proportion of the new businesses created statewide from 2012-13 – despite hosting only 7.4 percent of the total businesses in California. A recent report by Beacon Economics suggested that growth will accelerate over the next five years.

    At the same time, some of the core industries – such as manufacturing and warehousing – have shown signs of recovery. Industrial vacancy rates have fallen from nearly 12 percent in 2009 to roughly half that level today.

    Much of the growth has been for “middle-skilled jobs,” paying $14 to $21 per hour, including positions in medical services, trucking and customer service. Overall, according to one recent survey, the Inland Empire ranked 13th among the nation’s large metropolitan areas in creating such positions. These jobs, notes economist John Husing, are critical to a region where almost half the workforce has a high school education or less.

    Even the housing sector, the driver of the post-crash employment decline, has improved considerably. Today, the Inland Empire is experiencing a far greater increase in construction permits than either Los Angeles or Orange counties. This has also helped boost construction employment, although not to anything like the levels experienced a decade before. Construction employment, although up recently, still totals barely half the people it did in 2006.

    Some, such as University of Redlands economist Johannes Moenius, express concern that important industries, like warehousing and manufacturing, are increasingly using part-time workers. Positions paying $15,000 to $30,000 annually constitute nearly half of all new jobs.

    The ambiguity in the recovery is reflected in a recent survey by Cal State San Bernardino, which found the percentage of those saying the economy was excellent or good had almost doubled since 2010, from 9 percent to 17 percent, but this was considerably below the 40-plus percent seen before the crash.

    The Path Ahead

    The fate of the Inland Empire remains in the balance. The recovery of the region depends largely on continued widespread population growth, largely stimulated by the production of affordable housing. Yet, at the same time, state regulations, spurred on by the environmental lobby, which seeks to slow, or even eliminate, single-family construction, threaten to force up prices and drive young families outside the state.

    Many other core industries of the area – such as warehousing and manufacturing – also face growing regulatory barriers. High taxes and energy costs originating from Sacramento are particularly difficult for industries that require power to operate. Southern California Edison’s rates, for example, are almost twice those found in Salt Lake City, Seattle or Albuquerque.

    Some may celebrate these policies that encourage people to say “good riddance” to a region too sprawling and insufficiently cultured. Yet, it’s hard to see how Southern California can continue to add workers – notably, younger middle-class families – without a vibrant Inland Empire. It remains the one Southern California region with the land, and the housing cost structure, to accommodate much of the hard-pressed middle class. Without growth inland, Southern California will be largely relegated to a torpid economy and rapidly aging demographics, a fate that would compromise the aspirations of future generations.

    This piece originally appeared in The Orange County Register.

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