New Geography

Tag: Heartland

  • The Rise of the Great Plains: Regional Opportunity in the 21st Century

    This is the introduction to a new report on the future of the American Great Plains released today by Texas Tech University (TTU). The report was authored by Joel Kotkin; Delore Zimmerman, Mark Schill, and Matthew Leiphon of Praxis Strategy Group; and Kevin Mulligan of TTU. Visit TTU’s page to download the full report, read the online version, or to check out the interactive online atlas of the region containing economic, demographic, and geographic data.

    For much of the past century, the vast expanse known as the Great Plains has been largely written off as a bit player on the American stage. As the nation has urbanized, and turned increasingly into a service and technology-based economy, the semi-arid area between the Mississippi Valley and the Rockies has been described as little more than a mistaken misadventure best left undone.

    Much of the media portray the Great Plains as a desiccated, lost world of emptying towns, meth labs, and Native Americans about to reclaim a place best left to the forces of nature. “Much of North Dakota has a ghostly feel to it," wrote Tim Egan in the New York Times in 2006. This picture of the region has been a consistent theme in media coverage for much of the past few decades.

    In a call for a reversal of national policy that had for two centuries promoted growth, two New Jersey academics, Frank J. Popper and Deborah Popper, proposed that Washington accelerate the depopulation of the Plains and create “the ultimate national park.” They suggested the government return the land and communities to a “buffalo commons,” claiming that development of The Plains constitutes, “the largest, longest-running agricultural and environmental miscalculation in American history.” They predicted the region will “become almost totally depopulated.”

    Our research shows that the Great Plains, far from dying, is in the midst of a historic recovery. While the area we have studied encompasses portions of thirteen states, our focus here is on ten core locations: North Dakota, South Dakota, Nebraska, Kansas, Oklahoma, Texas, New Mexico, Colorado, Wyoming, and Montana.

    Rather than decline, over the past decade the area has surpassed the national norms in everything from population increase to income and job growth. After generations of net out-migration, the entire region now enjoys a net in-migration from other states, as well as increased immigration from around the world. Remarkably, for an area long suffering from aging, the bulk of this new migration consists largely of younger families and their offspring.

    No less striking has been a rapid improvement in the region’s economy. Paced by strong growth in agriculture, manufacturing and energy — as well as a growing tech sector — the Great Plains now boasts the lowest unemployment rate of any region. North Dakota, South Dakota and Nebraska are the only states with a jobless rate of around 4 percent; Kansas, Montana, Oklahoma and Texas all have unemployment rates below the national average.

    A map of areas with the most rapid job growth over the past decade and through the Great Recession would show a swath of prosperity extending across the high plains of Texas to the Canada/North Dakota border. Rises in wage income during the past ten years follow a similar pattern. The Plains now boasts some of the healthiest economies in terms of job growth and unemployment on the North American continent.

    Of course, this tide of prosperity has not lifted all boats. Large areas have been left behind — rural small towns, deserted mining settlements, Native American reservations — and continue to suffer widespread poverty, low wages and, in many cases, demographic decline.

    In addition, the region faces formidable environmental and infrastructural challenges. Most prominent is the continuing issue of adequate water supplies, particularly in the southern plains. The large-scale increase in both farming and fossil fuel production, particularly the use of hydraulic fracking, could, if not approached carefully, exacerbate this situation in the not so distant future.

    Inadequate infrastructure, particularly air connections, still leaves much of the area distressingly cut off from the larger urban economy. The area’s industrial economy and rich resources are subject to a lack of sufficient road, rail and port connections to markets around the world. Yet despite these challenges, we believe that three critical factors will propel the region’s future.

    First, with its vast resources, the Great Plains is in an excellent position to take advantage of worldwide increases in demand for food, fiber and fuel. This growth is driven primarily by markets overseas, particularly in the developing countries of east and south Asia, and Latin America.

    As these countries have added hundreds of millions of middle class consumers, the price and value of commodities has continued to rise and seem likely to remain strong, with some short-term market corrections, over time.

    Second, the rapid evolution and adoption of new technologies has enhanced the development of resources, notably oil and gas previously considered impractical to tap. At the same time, the internet and advanced communications have reduced many of the traditional barriers — economic, cultural and social — that have cut off rural regions from the rest of country and the world.

    Third, and perhaps most important, are demographic changes. The late Soichiro Honda once noted that “more important than gold or diamonds are people.” The reversal of outmigration in the region suggests that it is once again becoming attractive to people with ambition and talent. This is particularly true of the region’s leading cities — Omaha, Oklahoma City, Tulsa, Kansas City, Sioux Falls, Greeley, Wichita, Lubbock, and Dallas-Fort Worth — many of which now enjoy positive net migration not only from their own hinterlands, but from leading metropolitan areas such as Los Angeles, the San Francisco Bay Area, New York and Chicago. Of the 40 metropolitan areas in the region, 32 show positive average net domestic migration since 2008.

    Together these factors — resources, information technology and changing demographics — augur well for the future of the Great Plains. Once forlorn and seemingly soon-to-be abandoned, the Great Plains enters the 21st century with a prairie wind at its back.

    Visit TTU’s page to download the full report, read the online version, or to check out the interactive online atlas of the region containing economic, demographic, and geographic data.

    Praxis Strategy Group is an economic research, analysis, and strategic planning firm. Joel Kotkin is executive editor of NewGeography.com and author of The Next Hundred Million: America in 2050. Kevin Mulligan is Associate Professor of Geography at Texas Tech University and Director of TTU’s Center for Geospatial Technology.

  • Cooling Off: Why Creative California Could Look to Western New York

    Sometimes the stakes are bogus, sometimes the fast lane hits a fork.
    Sometimes southern California wants to be western New York
    –Lyrics from Dar Williams’ song “Sometimes California Wants to Be Western New York”.

    For long, making cultures and making people have been deemed outmoded. It is largely a knowledge economy. And since knowledge has been diverging into “spiky locales” known to be hotbeds of innovation, consider it a double whammy, as most of the relevant geographies are on the coast. The middle of the country is thus irrelevant if you care to survive. It is a man with a pitchfork in a sea of MacBook’s and iLife’s.

    For instance, in Edward Glaeser’s 2007 City Journal article he asks: “Can Buffalo Ever Come Back?” Glaeser answers quickly, “Probably not—and government should stop bribing people to stay there”.

    It’s true that many cities in the Rust Belt, Appalachia, Iron Range, Great Plains and the like have declined. Many people left. We all know why: jobs mostly, the weather a bit, or too damn depressing—the vacancy and all. We also know that the “flyover country’s” crème de la cream migrated to those gathering pools of talent like San Francisco, Boston, New York, Portland, and the Midwest’s own: Chicago. The reasons this was occurring was because (1) these places were “cool”, and (2) the cluster of talent created for innovation milieus because all the big brains colliding made big ideas, which made products not near the death of their life cycle like, for instance, iron or ovens.

    But suppose we are on the cusp of this divergence changing into a convergence of talent spreading back out into the heartland. In short, maybe these spiky locales are overheating, thus releasing “cool” elsewhere, not to mention the freedom to create. The following explains how and why this scenario could unfold.

    Allow me to digress for a moment to talk about the Second Law of Thermodynamics, and how it figuratively relates to the flow of capital. Consider it a working metaphor. Components of the Second Law state that whenever energy is out of equilibrium with its surroundings a natural potential exists to return a setting to equilibrium. For instance, if you bring a hot cup of coffee into a cold room, eventually the energetic tension between the cup and the room will dissipate as the heat leaves the coffee until there is thermodynamic equilibrium between the cup and the room. In many respects, I see the same energetic tension existing precariously between the spiky “have’s” of America and the Buffalo-like “have not’s”, with a subsequent resetting coming as talent and capital leak back into a convergent, equilibratory state.

    Now, what’s creating this tension, other than feeling sorry for Buffalo, Sioux City, etc.? Well, it’s part cultural, part social, and part economic. But all wholly real.

    First, the economic: as the GDP of spikiness goes up so does worker expense. For example, New York City’s cost of living is becoming unsustainable, even for knowledge laborers. From a recent Philadelphia Magazine article discussing a growing trend of New Yorkers moving (to) and commuting (from) Philly, the author notes:

    Those of us with young families, in the so-called creative class…were now high-status, poorly paid culture workers who could no longer afford to live in New York, especially with children. Things no longer seemed possible because they weren’t.

    This exodus is not a blip. For instance, the borough of Brooklyn has lost nearly a half-million people from 2001 to 2009. To that end, the “spikiness” in this case is the unsustainable nature of global city price points, with fewer and fewer folks able to hang on as expenses skyrocket toward the needle-head of the elite.

    What will this mean for the future of jobs? Blogger Jim Russell believes that demand for labor will follow the out-migrating labor supply, even for tech companies. The reasons for this are simple: an increasingly available talent pool in geographies lauded for hard work, and cost. From a Silicon Valley exec who headed to a beer and sausage city:

    “I was very skeptical five years ago that I would do a meaningful expansion in Milwaukee…But what I have found is the majority of talent we need in our company, we are able to acquire in that area.”

    Space is less expensive, it takes less time to find qualified employees in Milwaukee, and they stay with the company for longer than they would in California, [Edward] Jackson said.

    Tied closely to the economic pressures of spiky locales are the social costs. For example, Chicago, once a City of Broad Shoulders, had long ago ditched its industrial ethos and swagger to become the City of Slim Hips. In short, under Mayor Daley, Chicago went all in with global city development, which meant using public funds and incurring public debt to build a place to serve its growing global city clientele. The cost was high, though: crippling municipal debt, a situation no doubt aided by the fact that luring the elite did nothing for jobs, with the city having fewer total jobs in 2009 than it did in its blighted heyday of 1989. Said Richard Longworth:

    In other words, Chicago — the only old industrial city in the Midwest to transform itself into a global city, a big success story in the global rankings — still can’t provide as many jobs for its residents as the old sooty City of the Big Shoulders.

    And that social cost? It has to do with the effect of creating cities within cities, for as Chicago pumped money into its various beautification endeavors, disparity and poverty festered on its West and South sides. The consequence for the city—for anyone who has been paying attention—is one of the most violent summers in Chicago history, with 56 people shot in a recent three-day period alone. Naturally, violence does nothing to attract talent, with one study showing that for every homicide that occurs in a city, total population declines by 70 people. And while many cities do not rival Chicago’s spike in crime, disparity-driven tensions are deepening fast in spiky locales, thus fermenting the possibility of unrest and subsequent flight.

    But at least there are oodles of creativity in “hot and spiky” locales, right? Here, things get interesting.

    There exists a subtle yet growing tension in various creative-laden camps regarding the globalization of creativity which—when implemented as a product—is marketed as “cool”. It’s an old tension really, one between selling yourself and being yourself, and the predicament was spelled out nicely in a recent article by Justin Moyer entitled “Our Band Could Be Your Band–How the Brooklynization of culture killed regional music scenes”.

    In it, the author laments the dissolving regional sound of music in America that has arisen from a decades-long divergence of musical talent into Brooklyn. For Moyer, vanning to “regional music scenes” allowed for a distinct back and forth between one’s own sound and the sound of the other, with the ping pong in musical differentiation allowing for a betterment of one’s own sound as well as the sound of the other. You know, how creative escalation and interplay is supposed to work.

    But somewhere along the way this stopped. As was recently proved in a study detailed in Scientific Reports, everybody started to sound like everybody else. How does Brooklyn do this? What is Brooklyn exactly? Moyer explains, before venting:

    Brooklyn has a downside. Those who abandon their [regional music scene] to come to Brooklyn risk co-option by an aesthetic Borg. Things get mushy. There’s too much input, and there’s not a lot that’s not known…There aren’t many secrets. There are no mountains to go over.

    …There are many Brooklyns. Los Angeles is Brooklyn. Chicago is Brooklyn. Berlin and London are Brooklyn. Babylon was the Brooklyn of the ancient world. In the 1990s, Seattle was Brooklyn…

    Some Brooklyns aren’t even places. MySpace is Brooklyn. YouTube is Brooklyn. Facebook is Brooklyn. Spotify and iTunes are perversely, horribly, unapologetically, maddeningly Brooklyn.

    I’m against it.

    Moyer is on to something, and he has got good theory behind him; that is: diversity and differentiation drive creativity, be it in the political, social, cultural, or economic realm, whereas homogeneity cloaked in popularity does not. What’s more, creative destruction rarely occurs in places perceptibly intact—be it in Park Slope or posh Naples. It occurs where there is urgency, or where it is needed most. It occurs in places very broken, like Detroit. And so eventually the next wave of a new system can very likely be rippled out from places that have been saturating in the pieces. Said Atlantic writer Alexis Madrigal, who just finished touring the Rust Belt: “[T]here are a lot of places where the apocalypse has already happened”.

    Of course this is all very speculative at the moment. The winners are still seen as the winners and the losers still the losers. But the writing is on the wall: the future is in the seams, between the lights and monotone, loud-ass beats.

    Even Twitter creator Jack Dorsey thinks so. The Rust Belt native was in Detroit recently discussing how he gets his creative fix. Is it soaking in Silicon Valley with other visionaries? Not exactly. Rather, by taking the bus to work. Why? Dorsey states:

    “I actually see real things… That encourages me and gives me a stronger purpose, sense of purpose about what I want to change and how my work might apply to that change

    Hear that Buffalo? Don’t listen to your death sentence. You are becoming. Just like Dar Williams predicted.

    Richey Piiparinen is a writer and policy researcher based in Cleveland. He is co-editor of Rust Belt Chic: The Cleveland Anthology. This piece originally appeared at his blog.

    American Gothic statue in Chicago photo by flickr user GYLo.

  • Carmel, IN Named Best Small City in America to Live In But Can Others Follow?

    Money Magazine just named the Indianapolis suburb of Carmel as the top small city in America to live in. Fishers, another Indianapolis suburb, ranked #12.

    Any ranking survey, and particularly one done by a magazine, needs to be taken with a grain of salt. However, Carmel and Fishers (along with occasionally Noblesville), frequently show up high in various national rankings. For those interested in suburban living, these places offer a pretty strong combination of good schools, low real estate prices (Indianapolis is basically the cheapest big city housing market in America), low taxes, and fairly high quality of life. With populations of over 75,000 each, these communities also have the scale to efficiently provide quality public services.

    I personally think Fishers has long term sustainability issues. It has kept up with very rapid growth admirably, but it has really not done much to secure its long term future, and when it reaches buildout, I expect problems to set in.

    Carmel by contrast has invested heavily in building towards a future where greenfield growth is no longer the driver. It has invested in high quality public facilities, some of the best suburban transportation infrastructure in the nation, building new urbanist neighborhoods from scratch, upgrading utilities, improving the environment, etc. Dan McFeely of the Indianapolis Star covers Carmel and wrote a bit about this.

    I’ve covered Carmel extensively for years here on the blog, calling it the “next American suburb” and writing about its civic strategy, new urbanist approach, and various criticisms of its leadership.

    I think the Carmel story is an interesting one because it shows how a city, albeit an affluent one, in a very conservative state can fundamentally transform itself in a way that that demonstrates results. This includes urbanism standards and infrastructure standards that exceed those of the urban core of Indianapolis, with many of its public services being better as well.

    The results most notably show up in incomes. While incomes cratered relative to the US in both Indiana and metro Indianapolis, Carmel’s median household income actually inched up versus the US average despite starting from a higher base.

    In short, the strategy has been working, though obviously the national economy has had an effect. And I don’t necessarily support everything they have done. Their $150 million performing arts center, for example, all paid for with public funds, seems expensive for a city of this size, and has saddled the city’s redevelopment commission with debt. But on the whole, things seem to be paying dividends.

    This is part of the explanation for why Indianapolis as a region has done well while its urban core lags many other cities. The majority of people prefer suburbs, and Indy’s newer suburbs provide an exceptional value proposition.

    Ultimately to be successful, the region will have to fire on all cylinders. This means both urban and suburban, with each neighborhood and town bringing a unique approach and its A game to the table. It’s not an either/or situation. I want to build urban cores up, not tear suburbs down. (Downtown Indianapolis has its own game going. Despite some recent criticisms that I stand behind, downtown Indy has positive momentum in a lot of areas. For example, another 300 tech jobs were just announced yesterday).

    I previously highlighted Columbus, Indiana, which has accomplished something similar in a more blue collar environment. So positive stories based on different variations of the same playbook aren’t limited merely to upscale suburbs.

    In a state that has long lagged the nation in job and output growth, and where the very large decline in relative incomes has been a huge issue at all levels, you would think that leaders would be streaming in to study these successful models.

    Alas, that is not the case. Not only is there little interest in learning from models that are actually working (save perhaps for other Indy suburbs looking to Carmel), there’s actual hostility. It’s as I said in some recent posts: Indiana actively discourages the pursuit of excellence. They’d rather cut down the successful than bring up the failing. State level policy choices are trying to do just that.

    Start with school funding. As part of a property tax reform process, the state of Indiana took over 100% of all local school operating funding. However, they also changed the funding formula in a way that stuck well performing metro Indy districts at the bottom of the pile. Out of about 360 school districts statewide, Carmel is fourth from the bottom in per pupil funding from the state. Other regional districts like Fishers and Zionsville are also at the bottom. In effect, the state decided to starve fast growing and well performing suburban districts. Somehow this didn’t make the list of education reforms in that recent Economist article. For a state that claims to want to base its economic future on things like life sciences, this sure seems puzzling.

    The state has also sought to impose a one size fits all, least common denominator approach to services. While it didn’t affect Carmel directly since they already built their first class library, the state’s Department of Local Government Finance vetoed plans by the suburbs of Westfield and Greenwood to build new libraries (partially inspired by Carmel), even though the bonding plans survived a petition challenge. The state’s rationale was that the cost per resident was higher than the state average. It’s easy to see that a policy like this acts as a one way downward ratchet.

    The state also passed a law that not only capped property taxes as a percentage of assessed value – a measure I support – but also put in place a de facto spending freeze for all cities at current levels through a levy cap.* (This levy cap ignores growth in commercial tax base, so if a town built a 50 million square foot industrial park, it wouldn’t even be able to raise the revenues to provide services to it).

    This has left cities increasingly depending on gimmicks to finance anything. And every time a city figures something like that out, the state makes noises about shutting it down. The state has also refused to allow communities to even let their own citizens vote in favor of spending money on things like transit. Indiana has never particularly empowered municipalities, but recent years have seen a strong turn towards disempowerment, with the state’s General Assembly serving as a sort of uber-city council (and now uber-school board too).

    I’d be willing to venture that neither Carmel nor Columbus would be able to accomplish what they have if they were starting out on the journey today under the current state legal and political climate.

    This is not to say that spending money is a solution to problems. Actually, by national standards, places like Carmel and Columbus don’t spend very much money at all. With some exceptions like that performing arts center, they are actually quite frugal. They understood the concept of long term total cost of ownership, and as a result have kept taxes low by not being penny wise, pound foolish in the short term, while so many other places that thought only about the now have descended into a near death spiral of service cuts, tax increases, and abandonment. That’s the tragedy.

    In a rational world, one would think that we’d look at models that are producing population growth, job growth, corporate (including foreign) investment, high quality of services and quality of life, keeping incomes at or above US levels – and mostly importantly all while keeping taxes well below normal (at the bottom of the state in Carmel’s case) even by the standards of Indiana – and say to ourselves: how can we get more of that? Unfortunately, that’s not the case here. (Again, some other Indy suburbs excepted).

    Before proposing solutions to Indiana’s long term under-performing economy, I would suggest that the candidates for governor first take a look around the state to examine at the places that are already doing well and have been doing well over the last decade or more. Then ask the question: what are they doing different and right and what do we need to do to get other places doing those things? First among the places to visit would be suburbs like Carmel and industrial cities like Columbus. If you’re ranked #1 in America, you must be doing something right.

    * This is complicated, but my understanding is that the total property tax levy cannot grow faster than inflation + population growth. This has had many perverse incentives, including keeping entities like townships from lowering their tax levy even when possible because they’re afraid they’ll never be able to raise it again if needed.

    Aaron M. Renn is an independent writer on urban affairs and the creator of Telestrian, a data analysis and mapping tool. He writes at The Urbanophile, where this piece originally appeared.

    Carmel City Hall photo by Bigstock.

  • Cities of Aspiration

    Drew Klacik’s recent post on how he ended up in Indianapolis got me thinking about the unique status of what I’d describe as “cities of aspiration.” Pretty much all cities seem to be reasonably good at attracting people in the following cases:

    1. Recruiting someone to a specific career or other opportunity. In this case, the value of the opportunity is really the question at stake. The attractiveness of the community itself is generally a secondary consideration though may have an impact pro or con.

    2. Luring residents based on a family connection. This would often be the case for “boomerang migration” – people who left and came back, ordinarily after marriage and children. More broadly we could think of this as retaining or attracting those with a historic connection to a place, such as being born there.

    3. Drawing people from a city’s natural catchment area. The size of this area depends on a variety of factors, but pretty much every city has some natural hinterland from which it draws people.

    I call this the “normal model” of attraction. Clearly, a place like Indianapolis does well on all of these types of attraction, as do most similar sized cities I’d argue. That’s how Drew ended up in Indy.

    However, there’s another basis of attraction. This is what I call “aspirational attraction” – it’s people deciding to move or desiring to move to a city from outside of its natural catchment area despite a lack of a job offer or historical connection. I see this as based in one of three primary motivations:

    1. Desire to work in a particular industry that is centered in a particular location. Want to be a country musician? Moving to Nashville helps. Similarly, if you want to be an actor, New York, LA, or Chicago are basically your only options.

    2. Desire to live in a particular city for lifestyle reasons. Portland would be the paradigmatic example here. People sure don’t move there for its job market.

    3. Desire to live in a city because of its reputation for a rapidly growing economy or superior job market. Many of the Sun Belt boomtowns might fall into this category. They’ve got similar quality of life to many other places, but their robust job markets (and perhaps a bit of nicer weather) draw people in.

    Clearly, there are comparatively few places that function as a aspirational cities in a meaningful sense.

    Back to Drew’s piece, I don’t want to put words into his mouth, but my impression was that he sees Indianapolis having a strong “normal model” of attraction but not functioning as an aspirational city. I agree. More than 80% of Indy’s net domestic in-migration comes from elsewhere in Indiana, the city’s natural catchment area, and it isn’t hard to believe that specific opportunities and boomeranging account for almost all the rest. Perhaps the implication of his notion of tradeoffs is that if a city like Indy isn’t aspirationally attractive, you have the luxury of compromise since you probably already have a lock on the market you’re currently capturing. That’s a perfectly valid conclusion to reach, IMO.

    A very serious question cities that function nearly exclusively as normal attractors need to ask themselves is whether they desire to become aspirationally attractive. If so, then some exploration of the basis of that, and a realistic assessment of whether or not it is possible is important to undertake. Included in this would be the implications of not becoming aspirationally attractive. It seems to me that not having some type of aspirational component to your city’s attractiveness ultimately puts a ceiling on what it can achieve. On the other hand, it is far from clear that it’s easy to consciously create an aspirational value proposition where none currently exists.

    Aaron M. Renn is an independent writer on urban affairs and the founder of Telestrian, a data analysis and mapping tool. He writes at The Urbanophile, where this piece originally appeared.

    Photo: sparktography

  • The New Geography Of Success In The U.S. And The Trap Of The ‘New Normal’

    This year’s presidential election is fast becoming an ode to diminished expectations. Neither candidate is advancing a reasonable refutation of the conventional wisdom that America is in the grips of a “new normal” — an era of low growth, persistently high unemployment and less upward mobility, particularly for the working class.

    Certainly recent economic news of slowing growth and job creation bolster the pessimists’ case. But Americans may face far better prospects than portrayed by our dueling presidential mediocrities. Let’s look at those states that have found their own way out of the “new normal,” in some cases reversing all the losses of the Great Recession and then some.

    The states that have added the most jobs since 2007 — Texas, North Dakota, Louisiana, Oklahoma and Alaska – are located in a vast energy and commodities corridor extending from the western Gulf to the northern tip of the Continent. New York and Washington, D.C., prime beneficiaries of monetary easing and a growing federal government, have also clawed back.

    But the big winners are in the central energy corridor. Since 2007, Texas has created almost five times as many jobs as New York; California is still down almost 900,000 jobs and Illinois is off close to 300,000.

    This should represent what Walter Russell Mead calls “a new geography of power,” the anointing of new places Americans and business go to find opportunity. One example: five of the six best cities for starting over in 2012, according to TheStreet.com, were in the Dakotas, Utah, Iowa and Nebraska.

    Why the energy and agriculture states? Since the onset of the new century, much of the sustained growth in the world has taken place not in the financial or information capitals, but in regions that produce basic commodities like energy and food. In the high-income world, the consistently best-performing countries since 2008 have also tended to be resource-rich ones such as Norway, Australia and Canada.Blue social policies work best when financed by petro-dollars and minerals sales.

    Domestic and European demand may fall in the next few years, but increasingly global commodity and energy markets are driven by the expanding needs of the major developing countries. This has helped keep energy prices high, particularly for oil. Being good at exploration and drilling has been more profitable than social media. Texas alone has added nearly 200,000 jobs in its oil and gas sector over the past decade and Oklahoma some 45,000. The Lone Star energy sector created twice as many jobs as exist in the software sector in San Jose and San Francisco combined. These jobs have been an outstanding driver of high-wage employment, with an average salary of upwards of $75,000, and located usually in less expensive areas.

    Choice plays an important part in the growth. The energy boom has supercharged the economies of the states that have welcomed this growth, including Texas, Oklahoma, Louisiana, North Dakota, Wyoming and Alaska. It has not been much help to New York and California, which are reluctant to crack rocks to extract even relatively cleaner carbon-based fuels like natural gas. In contrast, long-suffering Ohio and Pennsylvania, where there have been significant new finds of shale oil and gas, appear to have decided that Texas, not California, is the model for spurring growth.

    The energy-producing states can look forward to a bright future in the long run. U.S. oil and Canadian reserves now stand at over 2 trillion barrels and constitute more than three times the total estimated reserves of the Middle East and North Africa. Observers such as the New America Foundation’s Michael Lind believe that new discoveries, particularly of natural gas, mean that we might actually be living in an era of “peak renewables,” and at the onset of a “very long age of fossil fuels.”

    Growth of these sectors — along with construction and manufacturing — could prove critical to our beleaguered working class. There’s not much respect among the university-dominated pundit class for people who work with  their hands or have specific tangible  skills. Instead they need to lower their expectations and seek, as Slate recently suggested, to find work “in the service sector supporting America’s innovative class.”

    In this neo-Victorian society, the “new normal” means a society dominated by  “innovative” or “creative” masters and their chosen, lucky servants. Leave your job and family in the Midwest or Nevada to become a toenail painter in Silicon Valley, San Francisco or Boston. Besides losing any sense of one’s independence, it’s hard to see how a barber or gardener can live decently, particularly with a family, in such expensive places.

    This bleak reality may not inevitable, though. In many places construction employment is on the rise from its nadir in 2010. This recovery has been a nationwide phenomena but is, not surprisingly, most evident in growth states like Montana, Colorado, Indiana, Iowa, Nebraska, Tennessee and Utah.

    At the same time over the last two years the nation has added more than 400,000 manufacturing jobs, led by the industrial states hit hardest by the recession. Though these gains are small compared to the losses earlier in the decade, the growth is encouraging; automakers and other industries already are complaining about severe shortages of skilled labor. Maybe, after all, life as a dog-walker and hostel denizen in Palo Alto is not the best one can hope for if you can make enough to afford a nice suburban house outside Columbus or Detroit.

    The pundit class may be ready to write off the American dream but many Midwest states are working to restore it. Over the past two years Michigan and Ohio have experienced the biggest drop in unemployment of any states in the union; Michigan leads the way with a drop of almost five percentage points, while Ohio comes in second with a nearly three-point decline. Other key Great Lakes battlegrounds—Wisconsin, Indiana and arguably Missouri—have also seen two-point drops in their unemployment numbers.

    Why is this happening? A lot of it has to do with business-friendly state regimes. Unlike Illinois, increasingly the sad sack  of the Midwest, these states have cut taxes, worked to increase the availability of skill training and streamlined regulations. This has allowed them to take advantage of new opportunities.

    Improving the business climate represents the third critical element for overcoming the new normal. Most rundowns of the states with consistently favorable business and tax climates – as judged by executives — start with Texas, Utah and South Dakota. Many states that are recovering best from the recession, like Louisiana, Wisconsin, Florida, Ohio, Michigan and Arizona, all have been improving their rankings in business surveys over recent years.

    But this should not be seen as an exclusively red state phenomenon. Some blue states as well, notably Washington, have worked hard to keep taxes tolerable and have promoted a rapid expansion of their  industrial sector. Democratic-leaning Colorado, under the leadership of pragmatic Gov. John Hickenlooper, has also strived to main a good business climate and promote growth.

    What works, it appears, is not the mindless embrace of GOP or Democratic ideology, but a model that drives economic growth. It’s not rocket science: sensible regulation, moderate taxes and investments to spur job creation and productivity. “There is no Democratic or Republican way to sweep streets,” legendary New York City Mayor Fiorello LaGuardia once remarked and the same is true of economic growth.

    The stories of the successful states tell us the key to success lies  in promoting basic industries like energy, agriculture and manufacturing — which then create business service and high-skilled jobs — combined with a broad agenda favorable to entrepreneurs of all kinds. If only one of our presidential candidates would get the message.

    For more about how states are defying the "new normal," read the 2012 Enterprising States: Policies that Produce report, authored by Joel Kotkin and Praxis Strategy Group.

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

    This piece originally appeared in Forbes.

    Auto manufacturing photo by BigStockPhoto.com.

  • How Fossil-Fuel Democrats Became An Endangered Species

    In an election pivoting on jobs, energy could be the issue that comes back to haunt Barack Obama and the Democratic Party as the cultural and ideological schism between energy-producing Republican states and energy-dependent Democratic ones widens.

    As the economy has sputtered since 2008, conventional energy has emerged as one of the few robust sources of high-paying work, adding roughly half a million jobs since 2007 as new technologies and changing market conditions have opened up a vast new supply of exploitable domestic reserves. This is good news for Mitt Romney: nine of the ten states that rely most heavily on the sector for jobs are solidly behind him. (Colorado, where polls show Obama with a narrow lead, is the one exception).

    President Obama’s heavy-handed regulation of the booming old-energy economy—the moratorium on offshore drilling following the BP spoil, the decision to block the Keystone XL Pipeline, and the prospect of a fracking ban—and his embrace of green-energy policies has played well in the solidly-Democratic post-industrial coastal economies that he also depends on for fund-raising. But it’s left him with few friends in the energy belt that spans the Great Plains, the Gulf Coast, Appalachia and now some parts of the old rustbelt, despite his election-year claims of an “all-of-the-above” energy policy.

    It’s a far cry from Bill Clinton, whose close ties with Great Plains and Gulf Coast Democrats and energy producers there helped him twice carry Louisiana, Kentucky and West Virginia—all states that appear to be solidly behind Romney this year.

    Today, Democratic senators in regions that depend on fossil fuels are becoming an endangered species. Over the past two years, Virginia’s Jim Webb and Byron Dorgan and Kent Conrad, both from booming North Dakota, have announced their retirement or retired, while Montana’s Jon Tester has distanced himself from the president as he faces a difficult re-election fight. And that diminishing presence in turn means less intra-party resistance to any potential second-term plans to cut the burgeoning fossil-fuel business to size.

    The administration’s hostility to the dirty business of energy, and the sector’s fear of new bans or regulations in a second Obama term that would gut the industry were perhaps best captured by the then-EPA administrator who claimed Administration policy was to “crucify” fossil fuel.

    Yet as Obama pursues a 50-percent-plus-one re-election strategy reminiscent of President Bush in 2004, his energy approach has been embraced by his core constituents, particularly the public-sector union workers and urbanized “creative-class” members. This is particularly true in the coastal enclaves like New York and California that import much of their energy (and in California’s case in particular has declined to exploit its own considerable reserves). Sixty-percent of the electricity in Los Angeles, a key bastion of Obama support, comes from coal-fired plants in Utah and Arizona; much of the natural gas that provides nearly half of the power for California’s grid is imported. While Pennsylvania and Ohio have exploited their large shale reserves that have become vastly valuable in recent year thanks to new extraction techniques and shifting energy prices, New York State has yet to follow suit, even as New York City lacks the supply to match peak summer demand, forcing it to depend on an aging nuclear power plant at Indian Point that’s years overdue to close.

    President Barack Obama defends his energy agenda during his visit to oil and gas production fields located on federal lands outside of Maljamar, N.M., Wednesday, March, 21, 2012. (Pablo Martinez Monsivais / AP Photo)

    If anything, the pressure from environmental activists , many of them well-heeled and living far removed from power sources and the jobs they create, is for Obama to go even further. A few rich donors from the green lobby complain the President has not been environmentally correct enough; Mother Jones actually asked if Obama has been “morphing into Dick Cheney” on energy issues.

    But for the most part, the coasts are on board with Obama’s energy policy. Silicon Valley and Wall Street have invested heavily in the renewable industries favored and frequently propped up by the administration, putting their money where Obama’s mouth is. Silicon Valley hegemons like venture capitalist John Doerr and Wall Street giants like Goldman  Sachs regard the green energy business as a profitable, state-supported way to grow their profits. One disgusted  venture investor described the investors in the heavily subsidized green game as “venture porkulists.”

    These investments are now critical to many powerful tech firms, who increasingly have little domestic involvement in the manufacturing businesses that was central to a prior generation of Silicon Valley titans. Google alone has invested more than a billion dollars in the green-energy sector, as the valley’s new dominant clique of venture capitalists and tech executives donate at record levels to the president’s re-election.

    Nowhere is the element of choice inherent in energy policy more evident than in California, home to five of the nation’s twelve largest oil fields and energy reserves equal to those of Nigeria, the world’s tenth-largest producer. As high-paying energy jobs swell payrolls in the Great Plains, the Intermountain West and parts of the Gulf, the Golden State has double-digit unemployment, a collapsed inland economy and a series of bankrupt municipalities. Amidst a great national energy boom, California’s energy production has remained stunted even as the state’s draconian “renewable” energy mandates are slated to drive up its already high electricity rates. The state’s high cost of energy has impacted industry:  despite its vast human and natural resources, the Golden State, with 12 percent of the nation’s population received barely 2 percent of the country’s manufacturing expansions last year.

    Such inattention to California’s resources may be  popular in wealthy precincts of Silicon Valley, San Francisco and west Los Angeles, but the state’s green approach has helped place traditionally manufacturing-oriented communities such as Oakland, east Los Angeles, San Bernardino and Stockton in deep distress. Despite central California’s vast deposits of oil and gas, unemployment rates in some oil-rich areas there are over 15 and sometimes even 20 percent. 

    As economic forecaster Bill Watkins recently told an audience in hard-hit Santa Maria: “If you were in Texas, you’d be rich.”

    Meanwhile  the fossil-fuel energy producers, related chemical manufacturers  and financiers who are getting rich, from the Koch Brothers to Chesapeake Energy and Arch Coal, have been investing in Romney and the super-PACs supporting him.

    Much of the money they’re pouring in will likely be spent persuading voters in the four crucial energy states –long-time producers New Mexico and Colorado and emergent natural gas producers Ohio and Pennsylvania—that will be up for grabs in November. Colorado has generated more than 20,000 while new energy jobs since 2000, third highest in the nation, while Ohio and Pennsylvania combined have created 25,000 new energy jobs in that span—and that’s not counting the services those largely  well-paid workers demand or the new manufacturing jobs making pipes and compressors the industry creates. What all four contested states have in common is that their energy sectors are pitted against powerful competing interests, including true-blue urban constituents, and tourism and technology sectors that employ workers and industries more concerned with the local environment than with energy-driven growth.Still, a boom is a boom, and President Obama is doing his best to claim credit for the huge surge in oil and gas production under his watch, although the increase has been almost completely on private and state lands outside his reach. Production on federal lands has actually dropped. Yet his “all of the above” rhetoric comes off as more evenhanded and substantial than the drill- baby-drill GOP set.

    Romney, though, can point to a series of Obama decisions and priorities—including the painfully slow resumption of Gulf Shore oil operations after the BP spill, the effective veto of the Keystone XL pipeline, and proposed EPA greenhouse gas restrictions—as mortal threats to the American energy boom. He can also contrast the economic rise of energy-friendly Texas with the troubles of hyper-green California.

    Whether Romney, far from a master communicator, is savvy and bold enough to stick the point may prove decisive in November.

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

    This piece originally appeared in The Daily Beast.

    Oil well photo by BigStockPhoto.com.

  • U.S. Desperately Needs a Strategy to Attract the Right Skilled Immigrants

    President Obama’s recent “do it myself” immigration reform plan, predictably dissed by conservatives and nativists, reveals just how clueless the nation’s leaders are about demographics. Monday’s Supreme Court ruling on Arizona’s immigration crackdown also broke down along predictable lines, with both parties claiming ideological victories.

    Yet the heated debates are missing the reality of immigration and its role in America’s future. In reality America needs more immigrants, but with a somewhat different mix.

    Rather than an issue of “values” or political sentiment, we need to look at immigration as a matter of arbitrage, a process by which rapidly aging countries bid for the skills and energies of newcomers to keep their economies afloat.

    Nowhere is this immigration arbitrage clearer than in the world’s most rapidly aging region, Europe. By 2050 the workforce there is expected to decline by as much as 25%. Yet this diminishing resource is now increasingly on the march as young Greeks, Italians and Portuguese flee to stronger economies in Europe’s Nordic belt and elsewhere. An estimated half million left Spain last year alone. Ireland, which in recent decades actually attracted new migrants, was exporting a thousand people a week last year. In recession-wracked Britain, a 2010 poll found nearly half of the population would like to move elsewhere.

    Germany, with its ultra-low birthrate and rapidly aging population, has emerged as a primary migration beacon. Germany needs about 200,000 new migrants ever year to keep its economic engine humming. For decades, newcomers from Turkey and other Islamic countries have flocked there, but this migration has failed to deliver much added value due to their general lack of skills and divergent cultural values. So the Germans — as they did back in the 1960s — look to harvest the diminishing pool of skilled workers from equally aging states on the EU’s southern periphery.

    But it’s not simply a matter of a one-way south to north flow. Other EU countries, such as Italy, are playing the immigration arbitrage game by importing young workers from rapidly depopulating southeastern Europe. Milan, for example, added 634,000 foreign residents in just eight years (2000 to 2008), the largest share from Romania, followed by Albania. Over the period, more than 80% of Lombardy’s growth has come as a result of international immigration.

    But immigration arbitrage is more than a simple numbers game. As Europe learned through its bitter experience with immigration from North Africa and the Middle East, importing populations without necessary skills and attitudes useful for the modern economy can produce unhappy results. The key issue is how to attract and select immigrants likely to contribute to the national well-being and economic competitiveness.

    Almost everywhere in the world, there are shortages of skills ranging from construction to advanced engineering. Much of contemporary immigration to East Asia reflects the need for workers — largely from India, Bangladesh, Indonesia and Sri Lanka — to perform tasks considered “dirty, dangerous and difficult” (or 3-D).  Singapore and Hong Kong also have a bull market for high-end workers in order to maintain their increasingly financial and technology-oriented economies.

    But skills should not be conflated merely with university degrees. Education is no longer a guarantor of productivity; the degree, once a sign of distinction, has become a commodity. Many disciplines have little net positive economic impact. Few countries likely suffer shortages of post-modernist literature graduates, performance artists or lawyers.

    Opening the doors to undocumented high school graduates, many with no real marketable skills, as President Obama just did, may not have a great positive long-term effect on the economy. Perhaps it would be better if our immigration policies were less about politics, and ethnic constituencies, and more about gaining specific skills and abilities from other countries, including from Mexico’s growing ranks of educated and skilled workers.

    Some countries, such as Canada, Australia and Singapore, already have made major accommodations favoring skilled or entrepreneurial immigrants. The United States, to its great disadvantage, has been slow in this regard. In 2011 barely 13% of all American immigrants came as a result of employment-based preferences, down from 18% 20 years ago. Family reunification should remain a cornerstone of immigration but needs to give way substantially to a more skills-oriented policy.

    America’s approach is particularly baffling given our looming skills shortages. The reviving auto industry is already running short of craftspeople such as numerical machine tool operators. In fact, David Cole, chairman of the Center for Automotive Research, predicts that as the industry tries to hire upwards of 100,000 workers, they will start running out of people with the proper skills as early as next year.

    This shortage is also intense in many engineering and technically oriented fields. The Pittsburgh area alone has 1,500 engineering job openings. The Great Lakes Metro Coalition, covering 12 states, is advocating for a federal immigration policy focused on attracting highly skilled talent. Government and business leaders in economically healthy parts of the Great Plains, Texas and Utah now consider persistent skilled labor shortfalls — particularly in science and technical fields — as the greatest barrier to continued growth.

    Immigration policy should also look to bring in more entrepreneurs. As business start-ups overall have slowed, immigrants continue to launch new businesses. Today fully one-fifth of all American businesses are owned by immigrants, up from 12% two decade ago. Many of these are located in suburbs and small towns, where together a majority of immigrants see opportunities and a better quality of life.

    These qualitative distinctions may be lost on many in the pundit class. As a decline in Mexican immigration has driven overall immigration down below 2009 levels, the number of Asian newcomers is once again growing. Their share of annual new arrivals has risen over the past two years from 36% to 42%.

    Asians increasingly do not come for just economic opportunity — there’s often more of that at home — but to attain things almost impossible in their native countries  such as a single-family homes with a backyard and less congested, tree-shaded neighborhoods. For some, like migrants from China, political and religious freedom also is often a major attraction.

    This is good news for the future. As a Pew report recently pointed out, Asian immigrants tend to possess many of the characteristics this country sorely needs: a commitment to education, family and entrepreneurship. McKinsey suggests China and India will produce 184 million new college graduates over the next 10 years; this provides a vast pool of which the U.S. has only to pick up a small portion to boost its economy.

    This is not to argue for a policy based on ethnicity or geography. There are hard-working, skilled immigrants to be had from the poorest countries in Latin America or Africa. If you want to see this, go to any strip mall around Houston, Los Angeles or northern New Jersey.

    We need to target immigrants most likely to help our advanced industries, start businesses and families, and whose descendants will provide critical demographic vibrancy. There may soon be many such people looking to move from places like the Middle East, particularly Christians or liberal Muslims threatened by rising Islamism. There also should be policies to welcome restless young Europeans who may be seeking more opportunity elsewhere.

    The age of immigration arbitrage will require critical shifts in all advanced countries to provide many more openings for skilled immigrants and entrepreneurs. But ultimately the best way to attract these people lies in boosting the kind of economic growth and opportunity that can attract this most valuable resource to a country.

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

    This piece originally appeared in Forbes.

    Immigration rally photo by BigStockPhoto.com.

  • Despite Obama’s Policies, The Rust Belt’s Revival Could Save His Campaign

    Barack Obama’s political base always has been more “creative class” than working class—and his policies have favored that base, seeming to cater to energized issue and identity constituencies including African-Americans, Hispanics, gays, and greens, often at the expense of blue-collar workers.

    Yet improving conditions for those workers—particularly in the industrial heartland—could save his flagging presidency.

    The industrial zone’s four key states—Michigan, Ohio, Wisconsin, and Pennsylvania—constitute the most critically contested territory in this year’s contest. Fifty-four electoral votes are at play here, with Pennsylvania’s 20 votes alone equaling all those at stake in the much-ballyhooed battleground of the Intermountain West (Colorado, Nevada, and New Mexico).

    The Midwest is also home to the two states with the biggest drops in unemployment over the past two years. Michigan leads the way with an almost five percentage point drop, while Ohio comes in second with a nearly three–point decline. Other key Great Lakes battlegrounds—Wisconsin, Indiana and arguably Missouri—have also seen two-point drops in their unemployment numbers.

    “Rust Belt” no longer seems like a pejorative, as the northern industrial states now boast unemployment rates well below those in once-booming states including California, Nevada, Florida, and South Carolina.

    In the last two years the nation has added more than 400,000 manufacturing jobs, led by states in the upper Midwest. Between 2010 and 2011, Michigan led the nation by creating 25,000 new industrial jobs with a heady 5 percent growth rate second only to Oklahoma. Wisconsin came in second with 15,000 new positions, and a growth rate of more than 3 percent.

    These gains may not come to close to making up the losses suffered over the past decade, but the growth is encouraging. Manufacturing employment brings higher wages to regional economies. In the Cincinnati area, the average factory job pays $61,000 a year—$15,000 more than the city’s average wage. This creates an outsized impact on the rest of the economy, from housing and retail to demand for business services. There are already significant shortages of skilled workers such as welders and machinists.

    Midwestern employers are projecting an 18.5% jump—the largest of any region—in the number of college graduates that will be hired this year.

    The new industrial economy creates considerable demand for those who can fill STEM (science, technology, education, and mathematics related jobs). Between 2009 and 2011, Michigan enjoyed the second strongest rate of STEM growth in the nation, just behind Washington, D.C.

    Much of what generated the heartland recovery—and much of what could slow or even reverse it—lies outside of the president’s control. But if the momentum holds through November, the political winds there will be at Obama’s back, helping him sell Great Lakes voters on the idea that the nation is moving in the right direction under his leadership. The key here lies with the revived auto industry.

    Obama’s “decision to rescue GM and Chrysler was exceedingly popular in auto manufacturing dependent states like Michigan and Ohio,” says former Michigan Democratic Party chair Morley Winograd. “The rise in manufacturing employment since has buoyed housing prices, boosted workers’ morale, and allowed Obama, in these states anyway, to be able to claim he delivered on the campaign’s promise of hope and change. "

    Mitt Romney is now effectively even in the polls in Michigan (one of his three “home” states), but he may have trouble explaining his opposition to the auto bailouts if the economic tide is rising.

    “Obama will win Michigan in a walk, “ predicts Winograd. “Outside of a nostalgic visit to his boyhood home, Romney won’t be seen in the state after Labor Day.”

    One state both candidates are sure to spend time in is Ohio, which has already emerged once again as a bellwether in the race.

    Rick Platt, an industrial development official in Newark, an industrial city of 50,000 in the central part of the state, sees the Ohio race as a struggle between “two narratives” about Obama.

    The first is the positive one, a reflection of industrial gains of more than 10,000 jobs last year and falling unemployment. The other narrative builds around fear over a second Obama term.

    Those concerns are especially pronounced in traditional swing regions like the Utica Shale in the eastern part of Ohio and the coal-producing swaths of western Pennsylvania (nearly half of the businesses in the booming gas and oil extraction field are based in the industrial heartland) that have long been resentful of Washington regulators. Business owners are concerned—as are many of their employees—that a second Obama term could mean the EPA shutting down the nascent natural gas boom that’s begun to generate both energy and high-wage industrial jobs. Some businesses have postponed investment due to uncertainty about the election and the prospect of aggressive regulation.

    “There’s a lot of things in play,” says Platt, who has been active in Republican politics. Not surprisingly, he credits much of the region’s recovery to the economic policy of Republican governors like John Kasich in Ohio, Michigan’s Rick Snyder, and Wisconsin’s Scott Walker—all states he notes that are lapping Illinois.  The Land of Lincoln, Obama’s Democrat-controlled home state, suffers the region’s highest unemployment rate and is competing with California for the nation’s worst credit rating. “It’s not clear right now which of the two narratives will win out.”

    The health of the manufacturing economy may prove even more important to the president’s reelection than the Dow Jones index. If industrial growth softens or goes into reverse—for instance, if Europe’s economic troubles cross the Atlantic—the Midwest will feel the effects first.

    And if the Rust Belt suffers, Obama’s path to a second term gets that much tougher.

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

    This piece originally appeared in The Daily Beast.

    Oklahoma City photo by BigStockPhoto.com.

  • Thunder On The Great Plains: A Written-Off Region Enjoys Revival

    They may not win their first championship against Miami’s evil empire, but the Oklahoma City Thunder have helped to put a spotlight on what may well be the most surprising success story of 21st century America: the revival of the Great Plains. Once widely dismissed as the ultimate in flyover country, the Plains states have outperformed the national average for the past decade by virtually every key measure of vitality — from population, income and GDP growth to unemployment — and show no sign of slowing down.

    It’s a historic turnaround. For decades, the East Coast media has portrayed the vast region between Texas and the Dakotas as a desiccated landscape of emptying towns, meth labs and right-wing “clingers.” Just five years ago, The New York Times described the Plains as “not far from forsaken.”

    Many in the media and academia embraced Deborah and Frank Popper’s notion that the whole region should be abandoned for “a Buffalo commons.” The Great Plains, the East Coast academics concluded, represents “the largest, longest-running agricultural and environmental miscalculation in American history” and boldly predicted the area would “become almost totally depopulated.”

    Yet a funny thing happened on the way to oblivion. Rising commodity prices, the tapping of shale gas and oil formations and an unheralded shift of industry and people into the interior has propelled the Plains economy through the Great Recession.

    Since 2000, the Plains’ population has grown 14%, well above the national rate of 9%. This has been driven by migration from the coasts, particularly Southern California, to the region’s cities and towns. Contrary to perceptions of the area as a wind-swept old-age home, demographer Ali Modarres has found that the vast majority of the newcomers are between 20 and 35.

    Oklahoma City epitomizes these trends. Over the last decade, the city’s population expanded 14%, roughly three times as fast as the San Francisco area and more than four times the rate of growth of New York or Los Angeles. Between 2010 and 2011 OKC ranked 10th out of the nation’s 51 largest metropolitan areas in terms of rate of net growth.

    Nothing more reflects the changing fortunes of Oklahoma City than the strong net migration from many coastal communities, notably Los Angeles and Riverside, a historic reversal of the great “Okie” migration of the 1920s and 1930s. In the past decade, over 20,000 more Californians have migrated to Oklahoma than the other way around. OKC has even experienced a small net migration from the Heat’s South Florida stomping grounds.

    The city’s transformation from a cow town into an attractive, modern metropolis has been fueled by some $2 billion in public investment and over $5 billion in private investment, says Roy Williams, president of the Oklahoma City Chamber of Commerce. Besides the arena for the Thunder, the city has engineered a successful riverfront development known as Bricktown, fostered a growing arts scene and become more ethnically diverse, largely as a result of immigration from Mexico.

    This pattern of revived urbanization can be seen in other Plains cities. World-class art museums grace Ft. Worth’s Cultural District, and downtown in Omaha, Neb., has become a lively venue bristling with revelers on weekends. Even downtown Fargo, N.D., now boasts a boutique hotel, youth-oriented bars, interesting restaurants and a small, but vibrant arts scene.

    Great Plains cities are doing well, however, predominantly due to their strong record of economic growth. Over a decade in which most large metropolitan areas lost jobs, Ft. Worth, Dallas, Oklahoma City and Omaha have created employment. Unlike many Bush-era boom towns, such as Las Vegas, Riverside-San Bernardino, Calif., or the major Florida cities, the Plains did not hemorrhage jobs during the Great Recession.

    The Plains states enjoy some of the lowest unemployment rates in the country. There were seven states with unemployment of 5% or less in April; four are on the Plains: North Dakota, with the nation’s lowest jobless rate at 3%, South Dakota, Nebraska, Iowa and Oklahoma.

    This is partly due to a booming energy industry. As U.S. oil and gas production has surged over the past decade, the Plains’ share has grown from roughly a third to nearly 45%. The biggest two gainers, Texas and Oklahoma, together boosted their energy employment by 220,000.

    But the Great Plains’ economic dynamism extends well beyond energy. The region’s farms and ranches cover an area exceeding 500 million acres,or over 790,000 square miles — larger than Mexico — and account for roughly a quarter of the nation’s agricultural production. These farms have benefited from the long-term increase in food commodity prices — notably wheat, corn, soybeans — and record exports. Since 2007 the Plains share of food shipments abroad has surged from 20% to nearly 25%.

    At the same time, the region’s industrial sector, notes research by Praxis Strategy Group’s Mark Schill, has withstood the recession better than the rest of the nation. Never a center of unionized mass manufacturing, the region has become a location of choice for expanding industries, in part due to low costs, cheap energy and a favorable regulatory environment.

    They know all about this in Oklahoma . Last year the Sooner State led the nation in industrial growth. One major coup: a large Boeing facility moved last year from California to OKC. The Dakotas and Nebraska also sit in the top ranks of producers of new industrial jobs. Since 2007, the Plains states have boosted their share of U.S. manufactured good from 19% to 21%.

    More surprising still has been the region’s surge in employment in jobs related to science, technology, engineering and math. This has been spearheaded, of course, by Texas, but most other Plains states — North Dakota, South Dakota, Oklahoma — also have enjoyed well above average tech job growth. North Dakota, remarkably, now boasts the second-highest percentage of people 25 to 44 with a post-secondary education, behind only Massachusetts; it also has one of the highest rates of high-tech startups in the nation.

    Given their generally strong state budgets, the Plains states have continued to pour more resources per capita into university-related research than their counterparts elsewhere. North Dakota ranks number one here, but South Dakota, Oklahoma, Kansas, Montana and Texas all rank in the top 10.

    None of this suggests that the Plains are ready to bid for primacy as high-tech centers with California or Massachusetts, or Ohio and Michigan as the country’s industrial bastions. For all their improved amenities, Omaha, Ft. Worth or Oklahoma City seem unlikely to surpass New York City as the nation’s cultural, restaurant or financial capital in our lifetimes.

    Yet it seems clear that the region, long dismissed as irrelevant, will play a much larger role in the nation’s economic future. Like the young Thunder, the people of the Plains now have a prairie wind at their back.

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

    This piece originally appeared in Forbes.

    Oklahoma City photo by BigStockPhoto.com.

  • Smart-Growth and Smarter Technology

    If you’re an enviro-regulator with a mission, preventing “sprawl” has been ideologically trendy in recent decades. You have successfully predicated your argument on past-history soils-management technological inadequacy, it must be enormously threatening to look back and realize that technology has been gaining on you and is now capable (in engineering terms) and affordable (in end-user cost terms) of enabling just the sorts of rural development the majority of the market-for-housing wants, but you’ve been trying so hard to prevent: Currier-and-Ives-tradition large-lot houses in the countryside.

    Case in point: the inadequate-soils argument long used by anti-rural-housing-and-business advocates to demand that buildings not be built anywhere soils aren’t naturally capable of environmentally-sound management of on-site sewage flows, and connection to a piped municipal sewer system isn’t feasible.

    One way to win the sewage-flow argument is to control the information flow so that targets of your engineering-inadequacy argument don’t get to know about technologies they might employ, passing all tests of environmental quality and product affordability, to build and occupy the house and-or business in the countryside they want and you don’t want them to have.

    If you’re good at it, you can keep the new technologies pretty much unknown to the public long after they’ve ceased being new. For example: chances are your local and regional planners and zoners never passed along to you the Winter 1996 issue of “Pipeline,” a quarterly effort of the National Small Flows Clearinghouse, a Federally-funded enterprise of the National Environmental Services Center within the U.S. Department of Agriculture and headquartered at West Virginia University. That issue was devoted almost entirely to a then-quite-innovative alternative to traditional septic-tank-and-disposal-field design: it was labeled “aerobic” to reflect its use of electric-powered air flows to enable oxygenated digestion, in contrast to the anaerobic design for traditional septic tanks.

    As the text explains, “aerobic…a good option…where soil quality…isn’t.” The Aerobic Wastewater Treatment module can be installed and used irrespective of natural site conditions. That was 26 years ago. Last month, the State of Maryland adopted legislation to advance “Smart-Growth” and prevent rural development by establishing new and more rigorous criteria for septic (anaerobic) tank installations. Not a word in the press releases about aerobic technology. Irony: your tax dollars pay for “Pipeline,”  which describes its objective as “small community wastewater issues explained to the public,” but in the last 26 years there’s been zero effort, on the part of your planners and zoners to assist in that effort. Have they actually worked to suppress such (in their opinion) non-useful information, possible counterpoints to their growth-control doctrines? You decide.

    It was (and still is) understandable that land with low-permeability clay soils, high water tables, shallow depth to bedrock, and similar negative qualities would be disqualified for in-ground septic systems on the grounds of predictable system failure. If non-soil-based systems didn’t exist, the logic of rural-development-prevention (no access to municipal piped systems) would prevail. That’s why Denver, back in the 80s, mounted a regional green-belt anti-sprawl campaign by curtailing municipal system expansion into previously-unserved real estate. It’s not understandable that development controls based on soil (in)capabilities should still be in place long after non-soils-based technologies have been engineered, manufactured, and marketed. Unless, of course, the soil-capability argument was an excuse, not a real reason.

    * * * * * *

    Before these little AWT packages became available (and have been unsuccessfully publicized by the Feds since the 90s) the industry was already interested in an even lower-tech non-soils-based design: the evapo-transpiration concept, where primary-treated effluent coming from a traditional septic tank is released into an under-sealed heavily-vegetated patch (in some designs, a shallow lagoon) where about two feet of vertical evaporation will take place annually if rain and snow are kept off. That’s a typical number for northern New England.

    Depending on location with respect to septic-tank discharge, electric power for pumping may or may not be needed. But industry interest was pretty much trumped by regulator hostility. Many fruitless meetings were held in Montpelier and Waterbury on the subject, even one at which copies of the 1980 Environmental Protection Agency Design Manual were handed around the table, to no avail.

    This raises the basic Smart-Growth question: can it be sold to (or forced on) a generally unwilling public only by pretending that the engineering basis for “sprawl” doesn’t work? There’s ample historical evidence –see Chapter 5, Ben Wattenberg’s “The First Measured Century”, for example—that “…the preference for the single-family detached house was even higher at the end of the 20th century than at the beginning…” but the top-down campaign against just such “sprawl” continues anyway.

    It doesn’t seem to matter that such exemplars of Smart-Growth as Portland, OR now show some of the highest housing costs in the nation; or that a new Cal State report on housing costs and young-adult out-migration speaks to a preference “…for raising children on backyards rather than condominium balconies.” One way to counter that, of course, would be to make the backyard even more expensive than the condo by pretending that the traditional on-site sewage system for the former is an engineering health hazard, and that no environmentally-acceptable customer-affordable alternates exist.

    To advance Smart-Growth it helps to keep the research and publications of the National Small Flows Clearinghouse as hidden as possible. There are some things, you understand, that the natives are better off not knowing, lest it make them restless.

    Martin Harris is a Princeton graduate in architecture and urban planning with a range of experience in fields ranging from urban renewal and air-industrial parks to the trajectory of small-town planning and zoning in States like Vermont.

    Rural Vermont home photo by Bigstockphoto.com.