New Geography

Category: Economics

  • What Do We Do With Shrinking Cities?

    Shrinking Cities: Understanding Urban Decline in the United States
    By Russell Weaver, Sharmistha Bagchi-Sen, Jason Knight, and Amy E. Frazier
    Routledge (2017)

    Cities like Detroit, St. Louis, and Cleveland have lost stunning percentages of their peak population since 1950. Yet these are all in metro areas whose regional populations are much higher than in 1950, even if not at their all time peak high in all of them.

    Some cities like Youngstown have gone so far as to try to plan for shrinkage and a permanently reduced population future. Detroit did something similar with its Detroit Future City plan, though that has subsequently been scrapped.

    How do we think about shrinkage? How do we define a shrinking city? What should shrinking cities do? These are questions that have been swirling around for the decade I’ve been writing about cities here.

    The new academic book Shrinking Cities aims to put some rigor around those questions. The first half of the book is devoted to an examination of shrinkage in the United States. The authors note that any measure designed to identify shrinking cities has a note of the arbitrary about it. The measure they select is population decline of 25% or more over the 40 year period from 1970 to 2010. They look at both census tracts and cities. Surprisingly, they find the shrinking census tracts are very widespread in America, and are on the rise in the Sun Belt. Shrinkage in terms of population loss is not a Rust Belt only phenomenon, though shrinking municipalities as a whole are concentrated in that region.

    The authors look at economic decline separately, examining census tracts where there were increasing levels of concentrated disadvantage (which include include such measures as female headed household, unemployment rate, and low educational attainment as disadvantage indicators). Unsurprisingly, economic decline is more common and more severe in shrinking tracts, though there is not complete overlap. They find that social distress is more associated with economic decline whereas physical distress (e.g., vacant housing) is associated more with population decline.

    After a presentation of the data, the book reviews various theories of what causes shrinkage and decline such as suburbanization. One that was particularly interesting was the social capital theory. Is low social capital associated with shrinkage and economic decline? It is. One of the indicators of social capital is homeownership. The book observes:

    In other words, relative to tracts that shrank and did not decline, tracts that experienced coupled shrinkage and decline witnessed a substantial drop in homeownership rates that cannot be explained by chance alone. If homeownership is a useful indicator of social capital, then his result implies that social capital may have decreased in these shrinking-declining tracts as well. Thus, tracts that are able to keep their homeownership rates steady during population shrinkage may be more resistant to decline via social capital.

    The second half of the book looks more at potential strategies for countering or adapting to change. These include various pro-growth policies, “rightsizing”, regional government, community development initiatives, etc. While some of these have had success in isolated cases, none of them have had systemic, replicable success. This makes for a bit of depressing reading. As one person told me about this aspect of the book, “Shrinking cities theory is at a dead end.”

    Because of its academic nature, and high price tag, this book is not for everyone. But policy developers in shrinking areas should certainly ground themselves in this summary of shrinking cities research and academic theories found in it.

    Aaron M. Renn is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and an economic development columnist for Governing magazine. He focuses on ways to help America’s cities thrive in an ever more complex, competitive, globalized, and diverse twenty-first century. During Renn’s 15-year career in management and technology consulting, he was a partner at Accenture and held several technology strategy roles and directed multimillion-dollar global technology implementations. He has contributed to The Guardian, Forbes.com, and numerous other publications. Renn holds a B.S. from Indiana University, where he coauthored an early social-networking platform in 1991.

    Photo of Brush Park, Detroit by Stephen Harlan, CC BY-SA 2.0

  • California: The Republic of Climate

    To some progressives, California’s huge endorsement for the losing side for president reflects our state’s moral superiority. Some even embrace the notion that California should secede so that we don’t have to associate with the “deplorables” who tilted less enlightened places to President-elect Donald Trump. One can imagine our political leaders even inviting President Barack Obama, who reportedly now plans to move to our state, to serve as the California Republic’s first chief executive.

    As a standalone country, California could accelerate its ongoing emergence as what could be called “the Republic of Climate.” This would be true in two ways. Dominated by climate concerns, California’s political leaders will produce policies that discourage blue-collar growth and keep energy and housing prices high. This is ideal for the state’s wealthier, mostly white, coastal ruling classes. Yet, at the same time, the California gentry can enjoy what, for the most part, remains a temperate climate. Due to our open borders policies, they can also enjoy an inexhaustible supply of cheap service workers.

    Of course, most Californians, particularly in the interior, will not do so well. They will continue to experience a climate of declining social mobility due to rising costs, and businesses, particularly those employing blue-collar and middle-income workers, will continue to flee to more hospitable, if less idyllic, climes.

    California in the Trump era

    Barring a rush to independence, Californians now must adapt to a new regime in Washington that does not owe anything to the state, much less its policy agenda. Under the new regime, our high tax rates and ever-intensifying regulatory regime will become even more distinct from national norms.

    President Obama saw California’s regulatory program, particularly its obsession with climate change, as a role model leading the rest of the nation — and even the world. Trump’s victory turns this amicable situation on its head. California now must compete with other states, which can only salivate at the growing gap in costs.

    At the same time, foreign competitors, such as the Chinese, courted by Gov. Jerry Brown and others to follow its climate agenda, will be more than happy to take energy-dependent business off our hands. They will make gestures to impress what Vladimir Lenin labeled “useful idiots” in our ruling circles, but will continue to add coal-fired plants to power their job-sapping export industries.

    Read the entire piece at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo: By User “Neon Tommy” (https://www.flickr.com/photos/neontommy/8117052872) [CC BY-SA 2.0], via Wikimedia Commons

  • The Shape of Things to Come

    After several years of traveling around the country in the presence of city planners, economic development officials, elected representatives, engineers, production home builders, professional consultants, and groups of concerned citizens I’ve come to my own personal unified theory of America’s land use future. The short version is that we’ve got the built environment that we have and the overwhelming majority of it isn’t ever going to change much. If you want to know what things will look like in thirty or forty years… look around. That’s pretty much it.

    There’s so much of it… tract homes on cul-de-sacs, suburban office parks, strip malls, big box stores, light industrial parks, self storage facilities, garden apartment complexes… even if society wanted to radically transform the landscape (which is absolutely not the case) it would be a sixty or seventy year endeavor. Personally, I won’t live long enough to see that shift. But business-as-usual isn’t an option either regardless of what most people might prefer. What will change is the way the existing landscape will be valued and inhabited.

    Communities are hitting a financial wall. Current tax revenue is entirely insufficient to cover the ongoing maintenance of municipal infrastructure – and by “infrastructure” I mean public services and staffing levels as well as the physical roads, pipes, and civic buildings. There simply isn’t enough productive private economic activity to support the underlaying public chassis that’s been built since World War II. So we’re in for a great deal of deferred maintenance, failed pension obligations, reductions in services, higher taxes (which will be called “user fees” and “code enforcement”) and ultimately default on public debt. That’s already baked in to the cake almost everywhere.

    There are only two options moving forward. We can build more productive stuff on the existing infrastructure, or we can reduce the amount of infrastructure to come in to balance with the available productive capacity. So we’re going to do both – not necessarily on a voluntary basis. And the results will be unevenly distributed.

    Some places will continue to be maintained pretty much as they are largely by skimming revenue from other locations. Other spots will decline, lose value, become politically and culturally disposable, and be allowed to crumble. Still other districts will intensify and gain value and significance through infill development. I say this with a fair amount of confidence because that’s been the historic pattern for a very long time.

    There are people who advocate for small scale incremental infill development that could double or triple the productive capacity of a place gradually over time. A one story building could become a two story building. A two story building could become a three story building. Small cottages could be built in back gardens. A vacant lot could be filled with a small productive structure with a business on the ground floor and an apartment or two upstairs. It could be intimate and charming like the Norman Rockwell Main Street towns of a previous era. But the current regulatory framework doesn’t permit such a process. Neither does the popular culture that sees such infill as a direct assault on the American Dream. The cost and complexity of navigating multiple opaque and unresponsive bureaucracies is generally greater than the ultimate value of such modest projects. So it’s simply not going to happen.

    Infill development needs to be large, complex, and expensive enough to overcome the administrative and cultural friction. A two hundred unit apartment complex with five stories of structured parking works just fine. It may be wildly out of character with the existing neighborhood. It may load up the area with additional traffic congestion. It may be far too expensive to meet the need for working class housing. It may concentrate ownership in to very few hands. It may be built in an otherwise diffuse suburban landscape where walking and transit are unviable. But it can be built while smaller things can’t. Shrug. Whatever.

    New subdivisions with comfortable attractive middle class homes sprout on the side of the freeway like mushrooms after a good rain. These are pleasant places to live. People like them. They’re profitable to build. Municipal officials embrace growth and development. This is how things are supposed to be.

    A few miles away is yesterday’s version of growth and progress. Property values have declined. Businesses have moved away. The schools have lost their appeal. Municipal revenues have crashed. People and money are disappearing. This isn’t an anomaly. It’s the natural consequence of things playing out to their logical conclusions. This is the shape of things to come.

    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.

    All photos by Johnny Sanphillippo

  • Hollywood’s Self-Inflicted Wounds

    No industry is more identified with Southern California than entertainment. Yet, in the past, the industry’s appeal has lain in identifying with the always-changing values and mythos of American society. But, today, that connection is being undermined, not just by technology, but also by a seemingly self-conscious decision to sever the industry’s links with roughly half of the population.

    This was painfully obvious during the Oscars — the penultimate event of the seemingly endless award season — when speaker after speaker decided to spend their moments of fame denouncing President Donald Trump. For all his personal failings, and often misguided policies, most Republicans and independents disapprove of the relentless Trump bashing in the media.

    Hollywood’s decision to make itself part of the anti-Trump resistance would make for wonderful satire, if you could get it on film. Imagine feminist icon Emma Watson fighting for “women’s empowerment” while baring her breasts in Vanity Fair. Or a host of social justice warriors, like Meryl Streep, demanding justice for the dispossessed, then returning to their estates where these victims of Trumpism are not likely to be found outside the servants’ quarters.

    The results also have a hard side: dismal ratings, down from a traditional viewership of 40 million to a mere 32 million, following a pattern that has seen it slide badly the last three years. Most Trump voters turned off the political speeches, notes one survey. But the Academy had other ways to show its contempt for its customers: None of the 10 largest grossing movies, notes USA Today’s Mitch Albom, got nominated for best picture, best actor or actress, or for supporting roles.

    The everyman era

    The preference of sophisticated opinion may be quintessential to Europe’s boutique film industry, but the blending of popular tastes with art has long propelled Hollywood’s historical success. This separation between audience and the Academy was not always the case. Films like “Gone with the Wind” (1939), “Around the World in 80 Days” (1956), “Ben-Hur” (1959), “The Sound of Music” (1965), “The Godfather” (1972), “Forest Gump” (1994) and “Titanic” (1997) all managed to be both blockbusters and best picture winners.

    Hollywood, wrote author Leo Rosten in 1940, was “the very embodiment” of “magic success,” allowing a truck driver to dream of being a hero, or a small-town waitress “to compare herself to a movie queen.” Hollywood was Middle American to the core, which appealed not just to our own audiences, but also to those around the world.

    In a political sense, Hollywood connected with Americans across the ideological spectrum. During the contentious 1930s, Hollywood could accommodate both the conservative myth of the loner — Gary Cooper and John Wayne — and also produce powerful dramas that touched on issues of class and inequality, such as “Our Daily Bread” (1934), “How Green Was My Valley” (1941) and “The Grapes of Wrath” (1940).

    Some progressive-leaning films were written by people who were later “blacklisted” during the McCarthy era, a tragedy that deprived the industry of some of its greatest talents. The industry instead favored biblical epochs like “Quo Vadis” (1951) as well as innocuous comedies starring the likes of Doris Day.

    “It was boy meets girl, lives happily ever after,” recalled former Los Angeles and Orange County Republican Congressman Bob Dornan, who grew up during this time. “There were clear-cut heroes and villains. Nazis torturing little old ladies, John Wayne landing on the beaches. … America was the bearer, the hope of the world.”

    Read the entire piece at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo: BDS2006 [CC BY-SA 3.0 or GFDL], via Wikimedia Commons 

  • Big Box Jesus

    One of my cousins recently attended an event at a suburban church and I tagged along. I’m amoral and omnivorous. I’ll go to any house of worship on the odd chance I might actually learn something useful – and I often do. And I meet a lot of really nice people along the way. But mostly I like to explore the landscapes other people inhabit. Church provides an intimate glimpse into what people are thinking and feeling in a particular location.

    I was immediately impressed with how much this church looked and functioned like a shopping mall. The size, shape, and general construction of the buildings and surrounding parking lots were indistinguishable from a large retail center. I spent more time than I probably should have trying to figure out which denomination it was. Catholic? Definitely not. Lutheran? Not exactly. Baptist? Meh. Mormon? Nope. It was a generic all inclusive Christian arrangement that celebrated the lack of any specific affiliation. Come and worship. We take all kinds. And enjoy the ample free parking and food court while you’re here. There was a well populated Christian school, a substantial auditorium, and all manner of programs and facilities. It was a highly successful suburban version of Big Box Jesus.

    The event my cousin was attending wasn’t strictly religious in nature. It was more of a collection of speakers who each preached a version of financial independence with a Christian slant. The majority of the attendees were suburban women like my cousin looking to start or improve an independent business venture.

    A borrower is a slave to his master. A thousand heads nodded. Always set aside 25% of everything you earn. The congregants listened intently. Start small and build up incrementally. There were biblical parables about prudence leading to abundance. Knowing smiles of agreement followed. There were some folksy stories about the misguided foolishness good people often stumble into. Laughs ensued from the audience. I liked these people.

    But then I looked out at the parking lot. How many people paid cash for their cars? I explored the subdivisions all around the church. How many people bought their suburban homes with cash? How many people are capable of setting aside even a sliver of savings on a regular basis ever. How many people bought their clothes and shoes and had their hair done with a credit card that got rolled over into a big ball of vague but gradually mounting debt? How many people are approaching middle age and still paying off student loan debt?

    I understand the dynamics of contemporary accounting. Carrying mortgage debt provides a substantial tax advantage. Using “other people’s money” at a low interest rate to invest in an asset that consistently rises in value is smart and frees up cash to be deployed in other more productive ways. Putting cash into savings is inefficient since it sits in a bank earning near zero interest these days. Stock values keep rising so investing in equities is a no brainer.

    You can’t go around wearing thrift store clothes and sporting a bowl haircut and expect to be taken seriously in a professional business setting. You don’t want to drive around in an old clunker and put your family at risk when you could have the latest safety and reliability features of a newer car bought on credit. If you can buy that car with a home equity loan and get the tax deduction, all the better. Everything about respectable modern life is predicated on people spending a certain amount of money in a very specific way that is nearly impossible to achieve on a cash basis. And that set of arrangements is in direct conflict with the traditional virtues of frugality, saving, and self reliance. Big Box Jesus takes Visa, Mastercard, and American Express.

    This particular suburb is still very much in the aggressive growth phase of development. Everything is shiny and new. Did the developers build this town on a cash basis? No. It’s built on an Everest of commercial debt. How many of the people at the church earn their living selling real estate, or cars, or brokering mortgages, or refinancing people’s obligations, or helping them manage their stock portfolios? How many people are critically dependent on other people buying their products or services on credit? One way or another… almost everyone.

    Is the city paying as it goes for infrastructure with funds set aside for maintaining and replacing all the pipes, pumps, and pavement when they wear out? Are pensions fully funded? Will this development pattern generate enough taxable value as it ages to support and maintain all the critical public infrastructure of schools, police, and fire protection? I’ve spent a lot of time exploring the municipal finances of towns all over the country for years. They’re all functionally insolvent beyond a certain not-too-distant point.

    What all these practices and institutions need – what they can’t function without – is constant growth based on ever more leverage and debt. This can’t go on forever. Sooner or later there’s going to have to be a day of reckoning when the whole house of cards comes down. If I were a religious man I’d start praying right about now. Instead, I actually do what the preachers say. Pay cash, live below your means, save for the future, and opt out of the situations that trap you in a dysfunctional living arrangement with no future.

    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.

    All photos by Johnny Sanphillippo

  • The Cities Creating the Most Tech Jobs in 2017

    A growing tech industry is often considered the ultimate sign of a healthy local economy. By that measure, the Bay Area still stands at the top of the heap in the United States, but our survey of the metropolitan areas with the strongest tech job growth turns up some surprising places not usually thought of as tech meccas.

    Charlotte, N.C., is more often associated with banks than bots. Yet from 2006 to 2016, tech businesses in the Queen City expanded their job count by 62%, with 18% growth from 2014-16, the fastest clip in the nation. Meanwhile, over the past decade, the metro area logged a 23% increase in the number of workers in STEM occupations (science, technology, engineering and mathematics-related jobs). This rapid job growth and strong recent momentum, driven partly by health care and environmental technology, ranks it second on our list. In the past 10 years, the region has added 7,400 jobs in two key high-tech business services sectors, custom programming and systems design services, along with nearly 700% growth in software publishing employment. To be sure, the share of tech jobs in Charlotte’s economy remains one third that of Silicon Valley, and the tech and STEM workforces are far smaller, but quality of life, lower housing prices, as well as decent plane connections, seem likely to help it to continue to attract tech workers.

    To determine the metro areas that are generating the most tech jobs, Mark Schill of Praxis Strategy Group analyzed employment data from the nation’s 53 largest metropolitan statistical areas from 2006 to 2016, with extra weighting for growth from 2014-16 to give credit for current momentum. Half our ranking is based on employment growth at companies in high-technology industries, such as software and engineering services. (This includes all workers at these companies, some of whom, like janitors or receptionists, do not perform tech functions). Half is based on changes in the number of workers classified as having science, technology, engineering and mathematics-related jobs (aka STEM). This captures the many tech workers in industries not primarily associated with technology, such as finance and business services. Data is sourced from EMSI.

    Another surprising up and comer is Indianapolis in fifth place. The share of STEM jobs in the local economy, 5%, is close to the national average but STEM employment is up 18% since 2006. Tech employment has grown rapidly, with the job count at tech companies up an impressive 68% since 2006, led by 1,700% growth at Internet-based businesses and 8,100 new jobs in custom programming and systems design.

    California-based companies are in the forefront such as Salesforce, which is adding 800 employees to its already 1,600-person office in Indianapolis. Similarly No. 7 Nashville is poaching jobs from the Bay Area with firms such as Lyft but also developing its own roster of defense and health-related tech firms. Since 2006, Nashville added jobs in nearly every tech industry we track, led by 3,700 new jobs in systems design, 1,800 in data processing, and 1,100 in engineering services.

    The Bay Area continues to excel in large part as a product of the rapid growth over the past decade of social media and business applications for technology. The San Francisco metro area, which includes tech-heavy suburban San Mateo County, ranks first. The City by the Bay and its environs, a hub for technical service firms like Uber and Salesforce.com, has experienced remarkable 90% growth in tech employment and a 36.5% expansion in STEM jobs from 2006 to 2016. Silicon Valley, with a concentration of tech industry workers 75% higher than upstart San Francisco, has also achieved rapid job creation, with tech industry employment up 80% and the number STEM workers increasing 32%, ranking it fourth. STEM employment per capita is roughly twice that of San Francisco.

    Other familiar faces make the top 10: No. 3 Austin, No. 6 Raleigh-Durham, No. 8 Seattle and No. 10 Denver. These lower-cost alternatives to the Bay Area have all been attracting people and companies from pricier California. Yet these areas too face rising housing prices, which is a challenge particularly for workers entering their early 30s and looking to settle down.

    Easily the biggest surprise on the list is Detroit, which improved its position to ninth, a remarkable 30-place jump from the last edition of this list in 2015. It generated 26% growth in high-tech jobs and boosted its STEM employment by 8.4%. Despite the decline of the central city, the Detroit metro area has never faded as a technical center; due largely to the auto industry its per capita STEM employment has long been above the national average. This is reflected in a post-recession boom in engineering services in the region – some 14,000 new jobs since 2006 – leaving Detroit with a concentration of engineering services more than three times the national average. Its percentage of STEM workers is 50% above the U.S. norm, roughly equivalent to that of Raleigh-Durham, Boston and Denver.

    More help could be on the way from a reviving urban core, says Chicago-based analyst Pete Saunders, himself a Detroit native. There is some evidence that the city itself is beginning to attract skilled and better educated workers. Microsoft has set up an outpost downtown for 165 employees and there is a small but evolving start-up scene.

    Winners, Losers and Stagnaters

    Detroit’s rise since our last study tells us something about the importance of industry to tech and the allure of lower housing prices. Another clear Rust Belt winner in this year’s survey is Pittsburgh. Still an energy and industrial center, and with low housing prices, the former steel capital jumped 10 places on our list to 21st. Pittsburgh has gained tech momentum as a center for autonomous vehicles, with Uber and Ford setting up operations there to tap talent at Carnegie Mellon. Like other upstart regions, Pittsburgh has seen a rise in high-tech business services, with 2,400 new jobs in engineering and 3,900 in systems design.

    Rochester, N.Y., is up 13 places to 36th, and Washington, D.C., gained 12 spots to 38th, while No. 41 Milwaukee and No. 25 New York both rose 10 places. New York’s improvement is tied to social media and a surge in biotech research and development. The region saw nearly 400% growth in employment at internet and web-based firms, but was not as competitive in many other tech sectors in our analysis. This plays to the city’s communications industry strengths, as well as Wall Street-connected fintech growth. While the metro area has by far the nation’s largest number of STEM workers at 450,500, in part by virtue of its massive population, New York is certainly not likely to emerge as a Silicon Valley competitor –the number of STEM jobs per capita in the New York metro area remains below the national average.

    Many traditional tech powerhouses have just held onto their positions, with little movement up or down. No. 16 Portland and No. 18 Boston held their own. So too, despite the excitement around Snapchat’s IPO, did Los Angeles at 37th. Its per capita STEM employment has now disturbingly dropped below the national average.

    And then there are the big losers, which include some traditional tech powerhouses. Despite its powerful medical and chip technology industry, San Diego dropped sixteen places to 39th. Houston dropped the most, some 39 places to 43rd, due to the energy bust. Yet it’s too early to count either of these places out in the long run since they both retain larger than average shares of STEM workers. A Trump defense boom could help jumpstart San Diego and Houston’s energy industry could be a prime beneficiary of the President’s “America first” energy policy.

    Future Prospects

    In the immediate future, no place will challenge the Bay Area as the mecca of technology and STEM employment. Other metro areas may now be growing as fast — and Charlotte even faster — but the Bay Area juggernaut has a big lead, even if it may finally be slowing down. James Doti, who directs the regional forecast at Chapman University, estimates that the job growth rate in the Valley’s information technology sector dropped to 2% in 2015 from a torrid 9% the previous year.

    Doti and other observers trace this in large part to the area’s soaring housing costs, now the highest in the nation. This particularly impacts millennials, many of whom are now entering their 30s, the prime age for family formation and home buying. If millennials continue their current rate of savings, notes one study, it would take them 28 years to save up enough to afford a median-priced house in the San Francisco area, but only five years in Charlotte, or three years in Atlanta.

    In 2015 7,500 more Americans left the Valley than arrived, the first time there’s been a net loss since 2011, according to the Silicon Valley Competitiveness and Innovation Project.

    If these trends represent the future, there could be an increasing exodus of jobs and talent from the Valley. In many of the upstart regions, there likely will be opportunities for economic migrants in the robustly growing (if less “sexy”) tech services sector, which includes engineering, systems design and custom programming.

    The big question is who will be the biggest beneficiaries, already established tech hubs like Seattle or Denver, or a long list of rising wannabes?

    In a word, as Sherlock Holmes would say, “the game’s afoot.” The future of regional economies around the nation could be at stake.

    2017 Metropolitan Tech-STEM Growth Index
    Rank Region (MSA) Score 2006-2016 Tech Industry Growth 2014-2016 Tech Industry Growth 2016 Tech Industry LQ 2006-2016 STEM Occuptn Growth 2014-2016 STEM Occuptn Growth 2016 STEM Occuptn LQ
    1 San Francisco 98.7 90.0% 17.5% 2.87 36.5% 9.9% 1.79
    2 Charlotte, NC 88.7 62.1% 18.0% 0.91 28.5% 10.4% 1.01
    3 Austin 86.2 76.6% 14.0% 1.93 35.4% 7.4% 1.76
    4 San Jose 85.9 79.6% 12.5% 5.12 32.2% 8.6% 3.43
    5 Indianapolis 72.4 68.1% 16.8% 0.96 17.8% 5.3% 0.98
    6 Raleigh, NC 70.3 46.9% 8.2% 2.07 31.9% 7.0% 1.56
    7 Nashville 65.7 75.6% 12.4% 0.71 13.7% 4.5% 0.80
    8 Seattle 62.7 47.7% 6.9% 2.32 28.5% 4.7% 1.89
    9 Detroit 61.6 26.1% 14.8% 2.12 9.6% 8.4% 1.50
    10 Denver 60.8 40.3% 6.9% 1.72 25.6% 5.5% 1.48
    11 Salt Lake City, UT 60.2 38.9% 6.5% 1.41 24.5% 6.0% 1.19
    12 Dallas 59.7 43.2% 9.3% 1.13 20.5% 5.0% 1.17
    13 Phoenix 59.5 48.5% 12.2% 0.93 10.1% 5.8% 1.16
    14 Grand Rapids 58.8 34.0% 8.9% 0.46 13.4% 7.9% 0.88
    15 Kansas City, MO 57.1 37.5% 9.8% 1.48 15.7% 5.5% 1.16
    16 Portland, OR 53.4 30.4% 7.4% 1.07 16.2% 5.5% 1.36
    17 Tampa 52.4 20.9% 10.6% 0.94 3.8% 8.3% 0.90
    18 Boston, MA 50.5 38.4% 6.6% 2.21 15.3% 3.8% 1.55
    19 Louisville, KY 50.4 27.6% 8.3% 0.57 15.0% 4.3% 0.69
    20 Atlanta 47.6 23.7% 7.7% 1.23 11.8% 4.6% 1.13
    21 Pittsburgh, PA 46.9 32.5% 7.8% 1.15 12.8% 2.8% 1.06
    22 San Antonio 46.1 28.2% 1.5% 0.82 22.2% 3.4% 0.83
    23 Orlando 45.9 8.5% 7.4% 0.89 8.4% 6.8% 0.78
    24 Cincinnati, OH 43.5 21.9% 6.6% 0.81 9.3% 4.1% 1.04
    25 New York 43.3 30.4% 7.7% 0.98 5.9% 3.4% 0.89
    26 Miami 41.9 8.9% 8.4% 0.62 2.3% 6.0% 0.63
    27 Sacramento 40.9 41.0% 7.5% 0.90 3.8% 1.7% 1.26
    28 Baltimore 39.7 25.1% 4.2% 1.52 12.5% 2.1% 1.38
    29 Minneapolis 39.4 18.2% 4.7% 1.04 9.3% 3.4% 1.29
    30 Richmond, VA 38.0 20.3% 6.2% 0.78 4.8% 3.1% 0.98
    31 Jacksonville, FL 37.9 23.1% 3.1% 0.80 7.3% 3.5% 0.76
    32 Chicago, IL 37.5 22.6% 6.8% 0.92 3.7% 2.5% 0.93
    33 Las Vegas 37.2 6.6% 5.6% 0.53 1.5% 5.6% 0.47
    34 Hartford 36.7 34.7% 4.3% 1.00 3.2% 2.1% 1.14
    35 Columbus, OH 36.5 9.9% 2.9% 1.05 11.9% 3.1% 1.18
    36 Rochester, NY 35.1 27.1% 5.1% 0.76 1.1% 2.5% 1.10
    37 Los Angeles 34.0 16.4% 6.6% 0.84 0.2% 2.7% 0.93
    38 Washington, DC 32.4 4.8% 3.8% 2.54 6.7% 2.7% 1.99
    39 San Diego 31.2 19.1% -2.2% 1.62 10.0% 2.6% 1.38
    40 Cleveland 29.0 14.1% 3.3% 0.73 1.4% 1.8% 0.97
    41 Milwaukee 28.7 2.9% 4.6% 0.77 1.0% 2.5% 1.02
    42 Oklahoma City, OK 28.6 7.1% 3.9% 0.52 8.4% 0.0% 0.96
    43 Houston 28.4 18.5% -2.3% 1.09 20.0% -1.8% 1.22
    44 St. Louis, MO 27.2 2.8% 4.5% 0.86 0.0% 2.0% 0.96
    45 Buffalo 27.1 22.9% 1.0% 0.77 2.4% 0.7% 0.79
    46 Memphis, TN 26.3 30.8% -5.8% 0.39 3.6% 2.6% 0.59
    47 Providence 25.0 8.0% 2.5% 0.72 0.4% 1.2% 0.88
    48 Philadelphia, PA 22.2 2.5% 1.7% 1.09 -1.8% 1.5% 1.06
    49 Virginia Beach 18.8 -3.0% -1.7% 1.03 2.2% 1.0% 1.09
    50 Birmingham 18.4 1.4% 2.0% 0.62 -4.2% 0.4% 0.81
    51 Riverside 16.5 -15.4% 0.8% 0.30 -4.6% 2.2% 0.48
    52 New Orleans 16.0 21.6% -1.9% 0.62 -0.8% -2.3% 0.67
    53 Tucson, AZ 15.9 6.0% -1.9% 86.8% -2.5% 0.0 1.1


    To determine the metro areas that are generating the most tech jobs, Mark Schill of Praxis Strategy Group analyzed employment data from the nation’s 53 largest metropolitan statistical areas from 2006 to 2016, with extra weighting for growth from 2014-16 to give credit for current momentum. Half our ranking is based on employment growth at companies in high-technology industries, such as software and engineering services. (This includes all workers at these companies, some of whom, like janitors or receptionists, do not perform tech functions). Half is based on changes in the number of workers classified as having science, technology, engineering and mathematics-related jobs (aka STEM). This captures the many tech workers in industries not primarily associated with technology, such as finance and business services. Data is sourced from EMSI.

    This piece originally appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Mark Schill is a community and corporate strategy consultant with Praxis Strategy Group and Managing Editor of New Geography.

    Charlotte photo by Daritto7117 (Own work) [Public domain], via Wikimedia Commons

  • Small Colleges and Small Towns Working Together for Their Futures

    My latest column in the March 2017 issue of Governing magazine is about how small liberal arts schools are partnering to try to help the small towns where they are located succeed. In this they are imitating big cities, where major institutions have often played a key role in driving revitalization efforts, often in part out of self-interest. Here’s an excerpt:

    Many of the efforts these colleges are undertaking are still in their early days. But there’s a good chance that they will have staying power. Colleges’ increasing interest in the communities they anchor is not just a matter of civic altruism. In many cases, the schools face increasing pressures of their own. Between 2009 and 2014, according to The Wall Street Journal, 43 percent of the 300 small-town colleges it analyzed suffered declining enrollments. The squeeze has been particularly acute for schools with weak endowments. In 2015, Sweet Briar College in rural Virginia made headlines when it announced plans to close, though this was later rescinded after a public outcry and a number of new donations (and lawsuits).

    These small liberal arts schools tend to have very high tuition rates, though because of student financial aid the actual price paid is often well below the posted rate. But with student loan debt levels through the roof and the media filled with anecdotal reports of graduates with large debts and no jobs, prospective students are looking harder than ever at the price-value ratio. Still, for prospective students who value the intimacy of small colleges and communities, small towns have a lot to offer.

    Click through to read the whole thing.

    Aaron M. Renn is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and an economic development columnist for Governing magazine. He focuses on ways to help America’s cities thrive in an ever more complex, competitive, globalized, and diverse twenty-first century. During Renn’s 15-year career in management and technology consulting, he was a partner at Accenture and held several technology strategy roles and directed multimillion-dollar global technology implementations. He has contributed to The Guardian, Forbes.com, and numerous other publications. Renn holds a B.S. from Indiana University, where he coauthored an early social-networking platform in 1991.

    Photo: TravisNygard [CC BY-SA 3.0], via Wikimedia Commons

  • Fractions within the Working Class

    This has been a rough year.  After the election, I reposted a few articles on my Facebook wall, as did so many of my friends, about the “working-class vote.”  Did the white working-class just elect Trump?  I didn’t think so, but I also understood that the world can look very different to a working-class person than it does to a middle-class one.  I knew this because I grew up poor, and it is a constant struggle speaking to both sides of my life, my past and my present, my mother and my colleagues.  My mother, let me point out, did not vote for Trump.  She thinks he’s a jackass.  Two of her sisters did, however.  I don’t know anyone else in my extended family who voted for him.  There were lots of Bernie supporters, not many Clinton supporters, and a whole bunch of abstainers.

    A friend of mine from college, someone raised on the less wealthy spectrum of the educated middle class, took issue with even the idea of the “working class.” What was this really?  He knew a lot of blue-collar workers, plumbers, builders, who made a lot more money than he or his mother ever did.  I gave him the quick sociological explanations — it’s about power, not money, but his question remained with me.  Based on power at work, two-thirds of Americans can be classified as “working class” (see Michael Zweig’s excellent The Working-Class Majority).  That is a hell of a lot of people.  They don’t all think alike.  It struck me that sociologists, myself included, have spent untold ink arguing over the distinctions within the middle class (lower-middle, upper-middle, professional-managerial, those with economic capital vs. those with cultural capital, etc.) and where the line is between wherever this middle is and the top, and yet we have spent hardly any time  looking within the largest class of them all.

    So, I pulled out the General Social Survey (GSS), which has been asking thousands of Americans every year or so all about their lives, political identifications, and voting patterns. I decided to see if there were differences within the working class based on type of working-class job, and not on education, race or  income level.  Working-class jobs are those with little autonomy and often involving the use of one’s body – to wield a hammer, carry a baby, deliver a package from Amazon, stand all day greeting customers.  These jobs are held by a very diverse group of people; there are more people of color in the working class than in the middle or upper class.  When I refer to “the working class,” I mean this whole diverse group, not only white male workers.

    Let me give you a snapshot of five fractions of the working class: the Builders, the Makers, the Movers, the Clerks, and those who Serve (I call this category “CookCleanCare” to remind myself of the range of work within this fraction).  Builders most fit the stereotype of “the working class” (three-quarters are men, most are white, and many of them do wear hard hats at work), but it is only one fraction.  A more diverse lot are Makers, including assembly-line workers, tool-and-die makers, sewers, and cabinetmakers.  This is the fraction that has seen the largest influx of women in the past few decades, although still mostly male.  Movers include a wide array of transport jobs, from UPS drivers to ambulance drivers to long-haul truckers, also mostly men.  Most of those in the other two fractions are female. The CookCleanCare group includes those who prepare our food, clean our messes, and care for our children.  The Clerks are our growing retail worker category.  Back in the day being a clerk was seen as a move up, but today’s clerks are generally poorly paid and even less likely to hold a college degree than CookCleanCare workers (the most educated fraction).

    Here are some other interesting differences between the fractions.  Builders are the most likely to be living in the same place where they grew up, Makers the least likely.  Movers are the most likely to identify themselves as “working class.”  Twice as many Builders as Makers think of themselves as “middle class.”  Makers, in contrast, are more likely than the others to think of themselves as “lower class.”  In terms of income, Builders make the most money, Movers the least.   If we looked only at white men in each of the fractions, we would find the most instances of sexism, nativism, and racism among the Makers, perhaps reflecting the fact that this group has seen the biggest changes over the past few decades.  But it is important to note that a greater proportion of rich white men and white male managers express racist views than any working-class fraction does.

    During the past decade or two, ever since Reagan really, we have been hearing a lot about how “the working class” has turned its back on the Democratic Party.   But this is only true if we limit “the working class” to white men without college degrees.  If we include the whole of the working class, this claim is simply wrong.  According to my analysis of GSS data, there has never been a presidential election in which the majority of the working class voted for the Republican candidate.

    If we look at the working class based on broad occupational categories rather than race or education, we get a very different picture from “the working class” that political pundits have been talking about.  We don’t yet have GSS data for the 2016 election, but figures from 2012 suggest the value of analyzing working-class voters based on their jobs rather than income or education.

    This graph of voting patterns in the 2012 Presidential Election, arrayed by largest supporters of Obama from left to right, shows that while all occupational groups gave Obama a majority, two working-class fractions were at the polar ends of the spectrum. The Professional-Managerial Class fell near the middle. 

    Organizing the data by job categories also helps us understand that white working-class men don’t vote as a unified bloc. If we look only at white men, Obama’s lead lessens, with Romney winning slight majorities with Makers, Movers, and Clerks (not to mention lots of PMC support).  Why were white male Movers, Makers, and Clerks swayed by Romney while white male Builders and CookCleanCare were not?  For one thing, the Democratic Party may have forgotten Movers and Makers.  Women and people of color in these fractions may find other aspects of the Democratic party compelling, but white males less so.  All five fractions took an economic hit during the Recession and, unlike the PMC, none of them have recovered, as you can see from the chart below.  Makers even saw their wages decline before the recession hit.

    This points to the second problem with the “working class voting against their class interests” narrative.  Neoliberalism has clearly not been working for many working-class people.  The outrageous vote for Trump may be less an appreciation of his qualities or a heeled response to his dog-whistles and more a giant “Fuck You!” to the establishment.  If we don’t figure out a way to provide security and prosperity for all, we might just get neither for any of us.

    Class is a complicated construct.  Each fraction includes millions of workers, living in different parts of America, with different pasts, different futures, different understandings of how the world works. One way to gain deeper insight into the working class is to consider how major fractions within the working class respond to political appeals.  A call for massive infrastructure building, for example, is more likely to resonate with Builders, while a threat to cut the Department of Education may worry CookCleanCare members most.  It is also true that the nature of work changes, sometimes rapidly, as has been the case for many Makers and Clerks.  We owe the working class the respect of paying attention to which fractions are being mowed down on the front lines of neoliberalism.  It doesn’t seem like either major party has been doing a good job of this lately.

    This piece first appeared at Working Class Perspectives.

    Allison L. Hurst is an Associate Professor of Sociology at Oregon State University and the author of two books on the experiences and identity reformations of working-class college students, The Burden of Academic Success: Loyalists, Renegades, and Double Agents (2010) and College and the Working Class (2012).  She was one of the founders of the Association of Working-Class Academics, an organization composed of college faculty and staff who were the first in their families to graduate from college, for which she also served as president from 2008 to 2014. She is Chairperson of the Working-Class Academics Section of the Working-Class Studies Association.

  • Common Sense on Immigration

    No issue divides the United States more than immigration. Many Americans are resentful of the estimated 11 million undocumented immigrants, worry about their own job security, and fear the arrival of more refugees from Islamic countries could pose the greatest terrorist threat. At the other end of the spectrum are those who believe the welcoming words on the Statue of Liberty represent a national value that supersedes traditional norms of citizenship and national culture.

    What has been largely missing has been a sharp focus on the purpose of immigration. In the past, immigration was critical in meeting the demographic and economic needs of a rapidly growing nation. Simply put, the country required lots of bodies to develop its vast expanses of land and natural resources and to work in its factories.    

    The need for foreign workers remains important, but the conditions have changed. No longer a largely rural, empty country, more than 80 percent of Americans cluster in urban and suburban areas. Many routine jobs have been automated; factories, farms and offices function more efficiently with smaller workforces. Since at least 2000, notes demographer Nicholas Eberstadt, the “Great American Escalator” has stopped working.

    These changes suggest the need to rethink national immigration policies. In a country where wages for the poorest workers have been dropping for decades and incomes have stagnated for the middle class, allowing large numbers of even poorer people into the country seems more burden than balm. They often work hard, but largely in low-income service jobs and in the low end of the health care field. In California, home to an estimated 2.7 million largely Latino undocumented immigrants, approximately three in four Latino non-citizens struggle to make ends meet, as do about half of naturalized Latino citizens, according to a recent United Way study.

    Overall, our current immigrants, legal and illegal, have not advanced as quickly as in previous generations. This, along with the crisis in much of Middle America, should be our primary national concern. This doesn’t necessarily translate to mass deportations or even severe cutbacks in legal immigration, as some, including Attorney General Jeff Sessions and several congressional Republicans, have said. But it certainly does suggest taking a fresh look at how we view immigration.    

    Learning From Abroad

    So, what kind of immigration is best for America?

    Models to consider are those that put premiums on marketable skills and language proficiency rather than family reunification. The Canadian and Australian systems, as President Trump correctly noted, are more attuned to their own national needs, compared with the U.S approach, which emphasizes family re-unification. Canadian authorities allow some 60 to 70 percent of their immigrants to come for economic purposes, notes Carter Labor Secretary Ray Marshall, supporting their system mainly by “filling vacancies that are measured and demonstrated in the Canadian economy.”    

    Such a needs-based program would be a better, and fairer, way of addressing skills shortages than the odious H-IB program, which allows temporary indentured tech workers to replace American citizens. Instead, talented newcomers would be welcomed as future citizens and given the right to negotiate their own labor rates and conditions.

    This emphasis on admitting immigrants with needed skills leaves Canadians and Australians with generally more positive views about immigration than Americans. Australia is one of only three countries in the world where children of migrants do better at school than children of non-migrants. Canadian support for immigration is particularly high in Toronto, which has been transformed from a sleepy Anglo enclave to a vibrant, diverse global capital.

    But such hospitality is not limitless. A former Canadian immigration judge told me recently, in a tone of alarm, that his country’s invitation to 25,000 Syrian refugees could incubate the same sort of disorder that we see across Europe. There, in many heavily immigrant communities, poverty and isolation has persisted, sometimes for generations.    

    I doubt many Americans would want to see the kind of social unrest we see across once peaceful places like Sweden, where women now complain of being perpetually harassed, even as supposedly feminist politicians look the other way. In France, Muslims make up about 7.5 percent of the French population compared to 1 percent in the U.S., but France has been ravaged by Islamic terrorism, Muslim-fueled anti-Semitism, and a widening cultural gap between the immigrants and the indigenous French population. In France and many other European countries, we see the rise of nativist politicians that make Donald Trump seem like Mother Theresa.

    Citizenship and National Culture

    The United States could be headed to a similar devolution. America’s ideals may be universal, but our political community has always been based on U.S. citizenship. You should not have to be an Anglo to admire the Founders, or to embrace the importance of the Constitution. Yet it’s now fashionable among some progressive activists to reject established American political traditions, which constitute a fundamental reason people have come here for the last two centuries.

    Yet the “open borders” lobby on the progressive left increasingly demeans the very idea of citizenship. In some cases, they see immigration as way to achieve their desired end of “white America.” Some advocates for the undocumented, such as Jorge Bonilla of Univision, assert that America is “our county, not theirs” referring to Trump supporters. Others, like New York Mayor Bill di Blasio, refuse to differentiate between legal and illegal immigrants.

    As usual, California leads the lunacy. Gov. Jerry Brown, who famously laid out a “welcome” sign to Mexican illegal and legal immigrants, has also given them drivers’ licenses and provides financial aid for college, even while cutting aid for middle-class residents. Some Sacramento lawmakers are pressing to give undocumented immigrants’ access to state health insurance. Senate President Pro Tem Kevin de Leon recently boasted, “Half of my family would be eligible for deportation under the executive order, because they got a false Social Security card, they got a false identification.”

    The “open borders” ideology has reached its apotheosis in “sanctuary” cities which extend legal protection from deportation to criminal aliens, including those who have committed felonies. Donald Trump opportunistically emphasized this absurd and inappropriate situation—sometimes invoking the names of murdered Americans—during his 2016 campaign. The only mystery is why it would surprise the chattering class that many voters responded to his message.

    Most Americans are more practical about immigration than politicians in either party. The vast majority of us, including Republicans, oppose massive deportations of undocumented individuals with no serious criminal record. Limiting Muslim immigration appeals to barely half of Americans. Only a minority favor Trump’s famous “big beautiful wall” on the Mexico-U.S. border.

    Yet even in California, three-quarters of the population, according to a recent U.C.-Berkeley survey, oppose “sanctuary cities.” Overall, more Americans favor less immigration than more. According to a recent Pew study, most also generally approve tougher border controls and increased deportations. They also want newcomers to come legally and learn English, notes Gallup. This is not just an Anglo issue. In Texas, by some accounts roughly one-third of all Latino voters supported Trump.

    Sadly, immigration as an issue has been totally politicized. Obama deported far more undocumented aliens than his Republican predecessor, or any previous president, for that matter, without inciting mass hysteria. To be sure, Republicans face severe challenges with new generations that are more heavily Latino and Asian and generally more positive about immigration. The undocumented account for roughly one in five Mexicans and upwards of half of those from Central American countries, meaning that overly brutal approaches to their residency would be eventual political suicide for Republicans in many key states, including Arizona, Florida, Nevada, Colorado and even Georgia.

    Any new immigration policy has to be widely acceptable — both where immigrants are common as well as those generally less diverse areas where opposition to immigration is strongest. Unlike many issues, immigration cannot be devolved to local areas to accommodate differing cultural climates; it is, and will remain, a federal issue. A policy that melds a skills-based orientation, compassion, strong border enforcement, expulsion of criminals, and forcing the undocumented to the back of the citizenship line seems eminently fair.

    Economic Growth: The Secret Sauce of Immigration Policy

    Strong, broad-based economic growth remains the key to making immigration work. A weak economy, unemployment, population density, or sudden uncontrolled surges in migration, notes a recent Economic Policy Institute, drives most anti-immigration sentiment. The labor-backed think tank suggests it would be far better to bring in migrants with skills that are in short supply and avoid temporary workers, such as H-1B visa holders, who are paid lower wages, undercutting the employment prospects for Americans.

    Given the demands of competition and changes in technology, it seems foolish to allow many additional lower-skilled people enter our country. This is not elitism: Industry needs machinists, carpenters and nurses as well as computer programmers and biomedical engineers. What we don’t need to do is flood the bottom of the labor market. Again, this reality is race-neutral. Economist George Borjas suggests that the influx of low-skilled, poorly educated immigrants has reduced wages for our indigenous poor, particularly African-Americans, but also for the recent waves of immigrants, including Mexican Americans, over the past three decades.

    Like most high-income countries, America’s fertility rate is below that needed to replace the current generation. This constitutes one rationale for continued legal immigration. But our demographic shortcomings are also entwined with lack of economic opportunity, crippling student debt, and the high cost of family-friendly housing stock. In other words, one reason Millennials are putting off having children is because they can’t afford them.

    Overall immigration is a net benefit, if the economic conditions are right. An overly broad cutback in immigration would deprive the country of the labor of millions of hard-working people, many of whom are highly entrepreneurial. The foreign-born, notes the Kaufmann Foundation, are also twice as likely to start a business as native-born Americans. It’s always been thus—and these aren’t just small, ethnic, family-owned restaurants we’re talking about. More than 40 percent of Fortune 500 companies were founded by immigrants or their offspring.    

    American immigration has succeeded in the past largely due to economic expansion. The historical lesson is clear: a growing economy, more wealth and opportunity, as well as a sensible policy, are the true prerequisites for the successful integration of newcomers into our society.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo: Jonathan McIntosh

  • Detroit’s Recovery? Oh Yeah, It’s Real Alright

    So it seems the debate has begun.  There’s been enough progress in Detroit to discuss whether its rebound is for real, or not.

    Two academics, Laura Reese of Michigan State University and Gary Sands of Wayne State University, wrote a piece for the Atlantic a couple weeks ago to counter the spreading narrative of Detroit’s comeback.  The article notes the Motor City’s rebound has caught the attention of the national media and parts of academia, but they aren’t so certain that the trend is real, or if it is, whether it’s indeed sustainable.  From the article:

    “These rosy descriptions were not consistent with the reality of what we continued to see in many Detroit neighborhoods. To provide perspective on Detroit’s comeback story, we examined trends in a variety of indicators including population, poverty, income disparities, business recovery, unemployment, residential sales prices and vacancies, and crime.

    Two major conclusions emerged from our data. First, by a number of measures Detroit continues to decline, and even when positive change has occurred, growth has been much less robust than many narratives would suggest. Second, within the city recovery has been highly uneven, resulting in increasing inequality.”

    In response to this article, blogger Lyman Stone added his take on Detroit’s recovery.  He seems to agree with Reese and Sands that, whatever is happening in Detroit, it’s not touching growing numbers of city residents, and therefore it’s not exactly a comeback:

    “I tend to be on team “Abandon all hope ye who enter here.” Saving Detroit is likely to be extremely costly while still holding a high risk of failure, in my opinion. But this view is predicated on a certain perspective of what it means to succeed. To some, success means population decline stops. To some, success means fewer empty buildings. To some, success means balanced municipal finances. To some, success means increasing employment. To me, I tend to think success means that huge population outflows will stop, and that population will begin to rise. Others may espouse other views, but I tend to think a locality’s ability to provide prosperity only matters in a general equilibrium framework, so a place that makes locals rich by culling the herd of non-rich locals is not “succeeding.” Success means that you offer prosperity to a rising share of the general population.”

    However, Stone notes that there are some positive demographic trends that are evident in Detroit, and seems to make the case that if Detroit is to get out of its hole, it’s at least stopping digging.

    The City Observatory’s Joe Cortright took a positive spin on Detroit in the Atlantic, going against the grain of both pieces and suggesting that Detroit’s comeback shouldn’t be dismissed:

    “Is Detroit “back?” As best I can tell, no one’s making that argument. The likelihood that the city will restore the industrial heyday of the U.S. auto industry, replete with a profitable oligopoly and powerful unions that negotiate high wages for modestly skilled work, just isn’t in the cards…

    That said, there’s clear evidence that Detroit has stanched the economic hemorrhage. After a decade of year-over-year job losses, Wayne County has chalked up five consecutive years of year-over-year job growth. True, the county is still down more than 150,000 jobs from its peak, but it has gained back 50,000 jobs in the past five years.”

    Honestly, I think each of the pieces — indeed, most people — underestimate the depths of Detroit’s collapse, and therefore underestimate the significance of its current recovery.  Detroit’s collapse was not simply an economic one, but a cultural, social and demographic one as well.  It lost virtually all connections with the networks of wealth and information that drive economic growth, and the city had such a pervasive negative perception that it was effectively erased from the minds of many.  What’s happening now is Detroit is reconnecting itself to the national and international network of cities, slowly returning to life among the living.  This is a necessary step for Detroit before any rebound that improves the lives of the majority its residents. 

    I view things this way.  While Detroit suffered immensely from the restructuring and decline of the auto industry, it likely suffered even more from demographic collapse.  Four years ago, I wrote a piece that showed the strength of the city’s demographic vacuum.  It’s not just that the city lost jobs and people moved.  People soured on Detroit in ways no other major city experienced, and left behind a city of concentrated poverty. I’ve often brought this graphic out, and it still amazes me:


    To his credit, Joe Cortright gets this in his article.  Where Reese and Sands argue that Detroit’s economic boost in the downtown and Midtown areas and some select nearby neighborhoods is raising income inequality, Cortright responds with a comment from the Brooking Institution’s Alan Berube: “Detroit does not have an income inequality problem—it has a poverty problem. It’s hard to imagine that the city will do better over time without more high-income individuals.”

    And that’s indeed the critical first step for Detroit.  It has to once again attract a critical mass of middle income and upper income residents who are ready, willing and able to invest in the city, before it can effectively take on its greater economic challenges. The post Great Recession recovery we’re witnessing now means the city is getting closer to being able to take on greater tasks.

    Pete Saunders is a Detroit native who has worked as a public and private sector urban planner in the Chicago area for more than twenty years.  He is also the author of “The Corner Side Yard,” an urban planning blog that focuses on the redevelopment and revitalization of Rust Belt cities.

    Top photo source tomabouttown.wordpress.com