Kansas City

The Next Entrepreneurial Revolution

Joel Kotkin — Fri, 11 Jun 2021 20:28:58 -0400

The coronavirus pandemic has altered the future of American business. The virus-driven disruption has proved more profound than anything imagined by Silicon Valley, costing more jobs than in any year since the Great Depression. But there’s also good news, as Americans’ instinctive entrepreneurial spirit is driving growth and innovation: 4.4 million new business applications were recorded by census data in 2020, compared with roughly 3.5 million in 2019. Self-employment, pummeled at first, has recovered more rapidly than conventional salaried jobs, as more Americans reinvent themselves as entrepreneurs.

To be sure, the initial impact of the pandemic favored big chains and accelerated the already dangerous corporate concentration in technology—Amazon tripled its profits in the third quarter of 2020 and the top seven tech firms added $3.4 trillion in value last year. This in turn has made all business, as well as ordinary Americans, subject to manipulation by the handful of “platforms” that control the primary means of communication. Meanwhile, lockdowns drove an estimated 160,000 small businesses out of existence and left those that survived to face “an existential threat,” according to the Harvard Business Review.

Like pandemics of the past, the current one, according to Berkeley economists Laura Tyson and Jan Mischke, has already driven new investments in technology that could reverse the long-term decline in U.S. productivity. Low real estate prices could spark a return to street-level enterprise, even in places like Manhattan that have long been ultra-costly.

But the focus of opportunity is more likely to be found in the suburbs and exurbs, as well as in the middle of the country. The movement of populations away from the big urban centers started before COVID, but a recent study in CityLab notes that it has since accelerated in places like California’s Inland Empire, the Hudson Valley, and the New Jersey suburbs. Overall, according to demographer Wendell Cox, offices on the fringe have recovered far faster than those in the largest urban cores like Manhattan, San Francisco, Chicago, and Houston.

The geography of work has changed as well. Upward of 30% of those who plan to work remotely after the pandemic, notes a recent Upwork survey, plan to do so outside the house: in coffee houses, coworking spaces, or other office environments closer to home. This has created a new market for suburban office spaces, real estate investor Andrew Segal told me. He sees remote offices filling with workers who may be tired of working at home but do not want to go back to their long commutes. Segal has recently purchased properties in the suburban commuter sheds around Chicago, New York, Phoenix, and Colorado Springs. “The problem is called COVID, but it’s really about commuting,” suggested Segal, who is based in Houston. “People now know they can get their work done from somewhere else that’s easier to get to than Manhattan, downtown Houston, Chicago, or Los Angeles.”

Businesses are following the trend. Between September 2019 and September 2020, according to the firm American Communities and based on federal data, inner cities experienced nearly a 10% loss in jobs, while outer suburbs, exurbs, and rural areas fared far better. According to Jay Garner, president of Site Selectors Guild, companies are looking increasingly at smaller cities and even rural locations rather than in the big core cities. Indeed, seven of the top 10 midsize cities preferred for new investments include not just sunbelt boomtowns but heartland cities like Columbus, Des Moines, Indianapolis, and Kansas City.

Analysis by Zen Business this year found that the best places for small businesses in terms of taxes, survivability, and regulation were overwhelmingly in the South, parts of the Great Plains, Utah, and across the Midwest. Places like the Bay Area, New York, and Southern California crowded the bottom of the list. In some cities like San Francisco, even opening an ice cream shop has become subject to unendurable, endless regulatory reviews. Many heartland cities are exploiting this opportunity, with some offering generous bonuses to telecommuters from the coasts.

Read the rest of this piece on Tablet Magazine.

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo: G. Keith Hall via Wikimedia under CC 3.0 License.

Red States Need to Be Citizen Friendly

Aaron M. Renn — Fri, 14 May 2021 20:28:58 -0400

My latest column is now online in Governing magazine. It’s a very tough look at northern red state governments and how they have not delivered economic results. I specifically mention Kansas and Indiana.

It was prompted to write this column by the state of Indiana unconscionably overturning a very basic city of Indianapolis tenant protection ordinance at the behest of the slumlord lobby, even after the Indianapolis Star had documented horrific conditions in rental properties.

Here’s an excerpt. Please read the whole thing. It’s gotten a lot of attention and pickup.

Why these poor results in states with the full panoply of red state best practices? It’s because the entire philosophy of governance in Kansas, Indiana and quite a few other Republican states is based on a fundamentally mistaken view of progress. Rather than investing to build up the skills and enhance the well-being of their citizens, they engaged in a race down to the bottom as a strategy to attract corporations. This too often can turn into an outright anti-citizen mindset, with governors and legislatures prostrating themselves before the worst sorts of parasitic industries and special interests….

Too many red states like Kansas and Indiana are great for the well-connected but bad for the average citizen. It should be the opposite. They should make being a “citizen-friendly state” their North Star. They should work to make life much better for the people who call them home, whether they be renters, pregnant women, nursing home residents, people who don’t own cars or anybody else for that matter.

One would think that’s the primary duty of a state government. But it’s also good business sense. The most important factor in attracting high-wage employers is the availability of a skilled labor force – talent. Rather than a race to the bottom, these states should be investing in building up their people. And creating the kind of environment in which people want to move there on the merits of the state – not just because it’s cheap. This will be doubly critical in a post-coronavirus world where more workers will have the flexibility to live wherever they want.

Shortly after this column was published, the state of Indiana trumpeted - the governor himself commented on it - that an Apple warehouse (actually run by XPO Logistics) was opening that would employ 500. The same week Apple announced a technology campus in North Carolina that would employ 3,000 high skill workers in areas like artificial intelligence. This is how a heartland state falls behind, as its low end economy grows while its high end economy expands at a slower rater than competitor states and regions.

Whatever the underlying causes of southern red state success, the attempted imitations in the north have not worked.

Professor Tanner Greer wrote an article that got a lot of attention on the problems of the “new right” (defined basically as post-liberal or Trumpist conservatives). This article has a number of problems, including overly focusing on the Catholic integralist movement that is minuscule in size. But it makes an interesting point about the Jacksonian (think small-l libertarian) orientation of much of the Republican voting base.

Indiana, with a heavy influence from the upland South, has a strong Jacksonian streak in its population. Presumably Kansas does as well. That Jacksonian orientation is one reason these public policies persist. Arguing for a more citizen oriented approach by the government, as I do, goes against the cultural grain. Whereas cronyism of the type of Indiana and Kansas engage in is easy to frame in the libertarian language of “pro-business,” “limited government,” etc. Thus the people who live in these places have to take their fair share of the responsibility for what has happened to them.

This piece first appeared at: Heartland Intelligence. Click through to read the rest

Aaron M. Renn is an opinion-leading urban analyst, consultant, speaker and writer on a mission to help America’s cities and people thrive and find real success in the 21st century. He focuses on urban, economic development and infrastructure policy in the greater American Midwest. He also regularly contributes to and is cited by national and global media outlets, and his work has appeared in many publications, including the The Guardian, The New York Times and The Washington Post.

Photo credit: Daniel Schwen via Flickr under CC 4.0 License.

Reshoring America: Can the Heartland Lead the Way?

Joel Kotkin - Michael Lind - Dave Shideler — Sun, 21 Mar 2021 20:28:58 -0400

The COVID-19 pandemic has had overwhelming impacts on our economy, not to mention the impact on lives and personal wellness.

The critical lack of medical equipment to treat and protect those affected highlights the over-reliance of United States manufacturing sector on overseas production. The offshoring issue extends beyond current pandemic concerns, however, reaching far larger and more permanent concerns over industrial supply chains, worker training and even national security.

Reshoring is the relocation of production facilities to, or the creation of new ones in, the United States. Many domestic and foreign companies are recognizing the strategic advantages of locating in the United States, such as protecting intellectual property, shortening supply chains and shrinking wage differentials1 between the United States, China and other overseas locations. Some estimates suggest that firms fail to accurately estimate the costs of production in other countries by as much as 20 percent. Considering these additional costs, experts suggest that 10-30 percent of projects considering locating production outside of the U.S. would find that it would be cheaper to remain or expand within the country. As a result, jobs stemming from reshoring activity are estimated to have reached over 400,000 in 2019, and that number is expected to grow.

The U.S. Heartland stands to benefit the most from reshoring activity. Because of its historic dependence on manufacturing, there remains a culture, skilled labor pool and training programs, as well as infrastructure to support production facilities. The presence and diversity of existing manufacturing throughout the region also supports reshoring activity, since domestic suppliers are available and proximate. The growth of financial and professional services in the Heartland also make it a desirable place for manufacturers, given the shift within the industry toward out-sourcing these aspects of the business.

Bipartisan support for reshoring has never been stronger in Washington. We have seen that reshoring activity will require more than tariffs and renegotiation of trade agreements. Instead, policies encouraging the behavior will also be needed, so that carrots and sticks are an integral part of the policy framework. To truly be successful, priority should be given to sectors and companies with growth potential, such as critical supply chain gaps that impact national security. Furthermore, infrastructure improvements and enhancements are needed to ensure that the U.S. remains competitive in the broader global economy.

Read the full report at heartlandforward.org.

Michael Lind is an American writer and academic. He has explained and defended the tradition of American democratic nationalism in a number of book, beginning with The New Class War (2020). He is currently a professor at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin.

Dave Shideler is the Chief Research Officer at Heartland Forward, oversees research focused on identifying practical tool and policies Heartland communities can use to enhance economic performance and prosperity. Before Heartland Forward, Dave was Professor of Agricultural Economics at Oklahoma State University and Community and Economic Development Specialist with the OSU Extension Service. Those roles focused on entrepreneurship and assisted rural communities with economic development planning and implementation. Dave holds a Ph.D. in Agricultural, Environmental and Development Economics from The Ohio State University.

Image credit: Heartland Forward, from the report

The Heartland's Revival

Joel Kotkin — Thu, 20 Aug 2020 20:29:01 -0400

For roughly the past half century, the middle swath of America has been widely written off as reactionary, backward, and destined for unceasing decline. CNBC recently ranked the “worst states” to live in, and almost all were in what is typically defined as the Heartland.¹ Paul Krugman of the New York Times sees the region populated by “jobless men in their prime working years, with many suffering ‘deaths of despair’ by drugs, alcohol or suicide.”

Another Times article describes much of the small-town and rural areas as home to “the left behind”—Trumpian knuckle-draggers at war with modernity. This coastal contempt for the interior is nothing new, going back to celebrated figures such as Sinclair Lewis and H. L. Mencken, who dismissed it as hopelessly “backward if not reactionary.”² Two New Jersey academics have even proposed, with the approval of much of the national media, that large parts of the Great Plains be evacuated to make way for an expansive “Buffalo Commons.”³ One progressive publication suggested that the country should send “reparations” to the region, as if it were incapable of devising its own recovery.

Yet in reality, the Heartland—a region of twenty states between the Appalachians and the Rockies—has remained a critical part of our country. In 2016, this area generated nearly $5 trillion in goods and services.⁴ As of 2015, it was also home to nearly 60 percent of the U.S. population,⁵ a percentage that is likely to increase as both the Northeast and coastal California are projected to grow less than the national average between 2010 and 2030.⁶

To be sure, the Midwest and the less urbanized South have lagged behind, but the Heartland now also boasts some of the fastest-growing large metros. This revival reprises the critical role of the vast interior in providing what Japanese political scientist Fuji Kamiya described as sokojikara, or “reserve power,” the unique combination of America’s vast fertility, its openness to change, and innovative spirit.⁷ Throughout its history, America’s continental mass has been a key element of our economic, social, and demographic strength. Abraham Lincoln described it as constituting “the great body of the Republic.”⁸

The New Demography

Those pontificating about Heartland decline from Manhattan, Washington, Los Angeles, and San Francisco might consider looking more closely at demographic trends, which even before the pandemic were working in favor of much of the Heartland. In contrast, the great “urban renaissance” of the first decade of this century had a shorter run time than many anticipated.

New York epitomizes these trends. In the years right after the Great Recession, New York was gaining as much as fifty to eighty thousand people per year. By 2018, it was losing some forty thousand annually. Over the last several years, Chicago and the Los Angeles area have also lost population, both to surrounding suburbs and from people leaving the region entirely, notes Bill Frey of the Brookings Institution.

As both Frey’s research and a recent study from Heartland Forward demonstrate, outside of Florida and the southeast coast, the cities growing fastest have been in the Heartland—Dallas–Fort Worth, Houston, Austin, Nashville, Columbus, Indianapolis, and Des Moines. More remarkable—or unexpected—has been the demographic resurgence of some even smaller regions, such as the Fayetteville-Bentonville-Rogers-Springdale area in northwestern Arkansas; Fargo, North Dakota; Madison, Wisconsin; and Grand Rapids, Michigan.

These are not entirely new trends. Dispersion of both jobs and people started taking place as early as the 1970s, well before the current upsurge.⁹ Looking back, Frey suggests that the big city growth enjoyed in the period after the Great Recession represented something of “an aberration of historical patterns.” The old demographic normal has simply become the new normal again.

The shift to Heartland cities is driven by the migration of both immigrants and millennials. Today the South and increasingly the Midwest have emerged as primary destinations for immigrants, both directly and from the coasts. Similarly, much of the recent migration from Puerto Rico has been concentrated in the Midwest. Immigrants are particularly prominent as Main Street entrepreneurs; in Ohio, they now constitute one in five small business owners.

Equally critical have been the shifts in millennial migration. It has been widely asserted by urban cheerleaders, such as Neil Irwin of the New York Times, that places like New York, San Francisco, and Seattle would prevail since they have “the best chance of recruiting superstar employees.” The Times described Iowa as a place millennials are leaving, but nearly 15 percent of the population around Des Moines, the state’s capital and largest city, is between the ages of twenty-five and thirty-four, ranking it seventh among the fifty-four U.S. metropolitan statistical areas (MSAs) with between five hundred thousand and one million people. Perhaps more impressive, nearly 53 percent of local millennials have at least a two-year degree, the fourth highest rate among all MSAs in Des Moines’s population category.

Increasingly, as urban pundit Richard Florida has noted, the new growth of the “creative class”—the well-educated millennials critical to the urban renaissance—is “shifting away from superstar cities.” Large Heartland metropolitan areas like Nashville, Austin, Detroit, San Antonio, Grand Rapids, and Dallas–Fort Worth are all gaining educated millennials far more rapidly than coastal “magnets” like New York, Los Angeles, or even the Bay Area.

Read the rest of this piece at American Affairs Journal.

Notes

¹Scott Cohn, “These Are the Worst Places to Live in America in 2019,” CNBC, July 10, 2019.

² Jon K. Lauck, From Warm Center to Ragged Edge: The Erosion of Midwestern Literary and Historical Realism: 1920-1965 (Iowa City: University of Iowa Press, 2017), 51–57.

³ Richard Rubin, “Not Far from Forsaken,” New York Times, April 9, 2006; Deborah Epstein Popper and Frank J. Popper, “The Great Plains: From Dust to Dust,” Planning Magazine (December 1987).

⁴ Michael Lind and Joel Kotkin, The New American Heartland (Center for Opportunity Urbanism, 2017).

⁵ United States Census Bureau, “United States Population Growth by Region,” 2015.

⁶ Rolf Pendall et al., “Scenarios for Regional Growth from 2010 to 2030,” Mapping America’s Futures, Brief 1, Urban Institute, January 2015, 9. California analysis based on population projections from: State of California Department of Finance, “Projections,” January 10, 2020.

⁷ “2005 Nen Wa Nihon No Tagagore,” Shokun, February 2007.

⁸ Lauck, From Warm Center to Ragged Edge, 1.

⁹John Herbers, The New Heartland: America’s Flight Beyond the Suburbs and How It Is Changing Our Future (New York: Crown, 1986), 3–9.

¹⁰ Derek Thompson, “The Feedback Loop That Will Makes America’s Richest Cities Even Richer,” Atlantic, March 26, 2015; Saskia Sassen, Cities in a World Economy (Thousand Oaks, Calif.: Pine Forge Press, 2000), 2–4, 15, 61.

Bi-State Showdown in Kansas City

Aaron M. Renn — Wed, 15 Jul 2020 20:29:01 -0400

The Kansas City metro area is surely one of America’s most unusual. Among large metro areas spanning multiple states, it has the highest percentage of its population living in the state that does not contain its central city (apart from the perhaps even more anomalous case of Washington, DC). There are two municipalities called Kansas City, one in Missouri and one in Kansas, with the regional central city being the one in Missouri. And Kansas City is essentially the only large metro area in the country in which the “favored quarter” affluent suburbs are in a state that doesn’t contain the central city.

This raises some interesting questions. Kansas City usually shows up on my list of higher performing Midwest metro areas. But is this because of the Missouri portion of the metro or the Kansas portion? Or both?

I recently did a study for the Show-Me Institute in Missouri that looks at this very question. I look at the performance of the Missouri portion of the metro area vs. the Kansas portion across a number of economic and demographic factors: population, jobs, GDP, personal income, high and very high income households, educational attainment, etc.

In every case, the Kansas part of the metro area, with its affluent suburbs in Johnson County, outperforms the Missouri portion, sometimes significantly.

The Missouri side of the metro has a population of 1.3 million, similar to Louisville. That would make it a major metropolitan area in its own right. So I also looked at how just the Missouri side of the region would rank were it a standalone region. Its rankings would drop significantly in most cases, putting it in the bottom ten of all major metros in most categories.

While a concern about city-suburb splits in growth and wealth are common in the country, Kansas City has a unique spin on it because the central city and the most affluent suburbs are in different states. It surely makes for interesting regional dynamics.

Click over to read the full report.

This piece first appeared at AaronRenn.com.

Aaron M. Renn is a contributing editor at 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.

Photo credit: S300896 via Wikimedia under CC 4.0 License.

The Vital Midwest

Aaron M. Renn — Wed, 29 Jan 2020 20:29:01 -0500

John Austin at the Michigan Economic Center is a long time commentator on Midwest economic issues, going back to at least his 2006 Brookings Institute report “The Vital Center.”

Austin is back with a new report, which could perhaps be seen as an update of sorts, called “A Vital Midwest: The Path to a New Prosperity,” released by the Chicago Council on Global Affairs.

In a region with a lot of naysayers, Austin has been a consistently optimistic voice about the future of the region. This report continues in that tradition. I think he always does a great job of identifying and highlighting the assets that are present in the region.

Some highlights:

A lot has changed since the Midwest served as the birthing ground of the great industries—processed food, retail commerce, aviation, cars, chemicals, steel, electronics, machinery, consumer durables, and many more—that powered 20th-century America.

Much has also changed since a generation ago, when globalization and new industrial rivals diminished the region’s economic primacy, shuttered hometown employers’ doors, and left many communities struggling. This collective transition earned the region its “Rust Belt” moniker.

Over recent years, the forces of technological disruption, new lifestyle and work preferences of young and mobile talent, changing demographics, and media in an increasingly wired world have continued to alter the dynamics of the global marketplace, the shape of communities, and the economic position and possibilities for the residents of the region.

Today the Midwest is neither an economic monolith nor, despite lingering popular misconceptions, a “Rust Belt.” Many Midwest communities, large and small, have successfully evolved from their industrial and farming roots and are winning in today’s globalized, tech-based, and knowledge-driven economy. Most of the region’s major metros—from the Twin Cities in the west to Indianapolis at the nation’s crossroads to Pittsburgh in the east—are diverse, thriving hothouses of knowledge work.

What’s more, all of the communities anchored by one of the region’s numerous top-flight research universities (such as Iowa City, Ann Arbor, and State College) are thriving in an economic era in which talent and innovation dominate.

Many other Midwest communities that are neither major metros nor home to top research universities have also found paths to new success by embracing the forces of economic change and building on their particular assets to create a new era of economic vitality.

These include cities such as Columbus, Indiana; Midland, Michigan; and Rochester, Minnesota—cities that are thriving as their anchor employers stay on the cutting edge of innovation in emerging sectors.

Click over to read the whole piece.

Aaron M. Renn is an opinion-leading urban analyst, consultant, speaker, and writer on a mission to help America’s cities and people thrive and find real success in the 21st century. He also regularly contributes to and is cited by national and global media outlets, and his work has appeared in the The Guardian (UK), The New York Times, and The Washington Post, along with many others. Renn was a Senior Fellow at the Manhattan Institute from 2015-2019 and is a Contributing Editor at its quarterly magazine City Journal.

Of Niche Markets and Broad Markets: Commuting in the US

Wendell Cox — Thu, 03 Oct 2019 21:29:58 -0400

The six transit legacy cities - mostly urban cores that grew largely before the advent of the automobile - increased their concentration of transit work trips to 57.9% of the national transit commuting, according to the 2018 American Community Survey. At the same time, working at home strengthened its position as the nation’s third leading mode of work access, with transit falling to fourth. The transit commuting market share dropped from 5.0% in 2017 to 4.9% in 2018. Carpooling, after at least three decades of decline, has seen an increase in this decade.

Concentration of Transit Commuting Destinations in Legacy Cities

Based on transit work trip destinations (as opposed to residences of commuters) the cities of New York, Chicago, Philadelphia, San Francisco, Boston and Washington increased their share of commuting by 4.8% (2.6% points) in just eight years (from 2010 to 2018). The legacy cities are home to the six largest downtown areas (central business districts) in the United States, the destination for most of their transit commuting.

This increased concentration occurred even as transit commuting has begun to trend downward, from the 2015, the peak ridership post-1960 year (Figure 1). The transit legacy cities accounted for 6.1% of the nation’s employment in 2018. Their 57.9 share of transit commuting is nearly 10 times their equivalent share of jobs. The more favorable performance of the legacy cities in this decade resulted in their garnering 79.7%% of the increased commuting, more than 13 times their share of jobs.

The intensity of the concentration is illustrated in Figure 2, which compares employment, transit commuting and transit commuting increase (2010 to 2018) shares for legacy cities and the balance of the nation. The work trip market share to the legacy cities is 47%. By comparison, in the rest of the nation, transit’s work trip share is a miniscule 2.1%. Only 19 of the nation’s 53 major metropolitan areas has a transit work trip share of 3.0% or more.

However, to get to jobs outside the legacy cities (in the same metropolitan areas), transit commuting is only 8.6% of the national total. Strikingly, in New York, nearly 51% percent of the jobs are outside the city of New York. Transit’s share to these jobs is only 4.4%, a fraction of the 58.0% who use transit to jobs in the city of New York (the urban core)(Figure 3). Large differences between transit commuting to downtown and the suburbs occurs in most major metropolitan areas, not just those with legacy cities.

New York continues to have by far the largest transit commute share, at 30.9% (Figure 4). The lowest transit commute shares are in Birmingham and Oklahoma City, at 0.6%. Transit work trip data is provided in the Table below by mode.

Working at Home: The Big Winner

The American Community Survey data reveals working at home continues to be the big winner among the most popular employment access modes. Between 2017 and 2018, working at home (which includes telecommuting) gained 258,000 workers nationally, rising from 8.00 to 8.25 million in total. This was a considerable accomplishment. Working at home increased disproportionately relative to driving alone. Having only 7% of the driving alone volume in 2017, working at home added more than 20% of the entire commuting increase over the last year.

Working at home strengthened its number three position, following driving alone and vehicle pools, and now exceeding transit by more than 600,000. In 44 of the 53 major metropolitan areas, working at home accounted for more employment access than transit. The nine exceptions, in which transit led working at home included the six metropolitan areas with “legacy cities” plus Seattle, Pittsburgh and Baltimore. Overall, working at home has increased 2.3 million since 2010. It now has a market share of 5.3%, up from 4.3% in 2010.

Raleigh again had the highest work at home market share, at 9.1%, followed by Austin, Denver, Portland and San Francisco. The great advantage of working at home is that it reduces traffic, and does so without public subsidy (Figure 5). The work at home market shares exceeded that of transit in all but one of the ten top metropolitan areas (San Francisco, with its legacy city). Meanwhile, among the other nine strongest work at home metropolitan areas, seven have built expensive rail systems. Each of these has cost from hundreds of millions to billions of tax dollars. Yet, working at home, which is virtually unsubsidized has attracted substantially greater use.

Working at home exhibits little of the concentration observed in transit. All 53 of the major metropolitan areas have work at home shares of 2.5% or more. By contrast, 28 major metropolitan areas have transit commuting shares below 2.5%. Memphis had the lowest work at home share. Second lowest Buffalo, at 3.5% had a work at home market share larger than the transit market shares in 39 major metropolitan areas.

Carpool Resurgence

Carpools increased 300,000 between 2017 and 2018 and more than 600,000 since 2010. This follows decades of decline. This, however, was not enough to keep the mode from falling to 9.0% of the market in 2018 from 9.7% in 2017. There were 19.1 million carpools in 1980, the first year carpool data was collected and only 13.9 million now. The high market share was in Salt Lake City, at 12.0% (Figure 6), while the lowest was in New York, at 6.3%.

Ride Hailing

The data show a huge increase in taxicab use, which is probably due to recently initiated ride hailing services like Uber and Lyft. Taxicab commuting has increased more than 150%, from 150,000 to 360,000. The impact may be even greater. “Other” means of commuting increased almost 300,000, for a 25% increase. This was greater than that of all other modes of employment access, except for work and home and taxicab. It is not hard to imagine some respondents ticking “other” if they did not associate these new services with “taxicab.”

Work Access: Niche Markets and Mass Markets

While transit used to serve the largest share of motorized urban trips (probably about 90 years ago, but I have found no data), it has become a “niche” market among commuters who have a choice (have a car).Transit is about downtown and the urban core, with much of the share of transit commuting being destinations in these areas. Mind you, these are important markets, but they are small in the overall context of employment and transit’s access to metropolitan area jobs is miniscule.

The other three largest modes, cars, car pools and working at home serve broad markets. They can reach virtually any job in the metropolitan area, or in the case of working at home, many jobs around the world. That’s why those three modes hold a near monopoly on commuting, and represent most of its growth. With them, you can get from here to there.

EMPLOYMENT ACCESS BY MEANS OF ACCESS
US Major Metroopolitan Areas: 2018
	Drive Alone	Car Pool	Transit	Taxi	Motor-Cycle	Bicycle	Walk	Other	Home
Atlanta, GA	77.3%	8.9%	3.0%	0.5%	0.1%	0.2%	1.3%	1.2%	7.6%
Austin, TX	76.9%	8.7%	1.9%	0.1%	0.2%	0.8%	1.9%	0.7%	8.7%
Baltimore, MD	77.0%	8.0%	6.0%	0.3%	0.0%	0.3%	2.4%	0.8%	5.3%
Birmingham, AL	84.8%	8.8%	0.6%	0.0%	0.1%	0.0%	0.9%	0.6%	4.2%
Boston, MA-NH	66.1%	7.0%	13.2%	0.3%	0.0%	1.1%	5.6%	1.0%	5.5%
Buffalo, NY	82.1%	6.8%	3.1%	0.2%	0.1%	0.4%	3.0%	0.8%	3.5%
Charlotte, NC-SC	79.2%	9.4%	1.5%	0.2%	0.1%	0.1%	1.4%	0.9%	7.3%
Chicago, IL-IN-WI	69.8%	8.0%	12.1%	0.3%	0.1%	0.7%	2.8%	0.9%	5.4%
Cincinnati, OH-KY-IN	81.6%	8.2%	1.7%	0.1%	0.0%	0.2%	2.2%	0.8%	5.1%
Cleveland, OH	81.6%	7.9%	2.7%	0.1%	0.0%	0.4%	1.9%	0.8%	4.6%
Columbus, OH	81.3%	8.2%	1.7%	0.1%	0.1%	0.3%	2.2%	0.7%	5.5%
Dallas-Fort Worth, TX	80.8%	9.5%	1.3%	0.1%	0.1%	0.1%	1.3%	0.9%	5.8%
Denver, CO	75.0%	8.2%	3.8%	0.2%	0.1%	0.9%	2.4%	0.8%	8.7%
Detroit, MI	83.2%	8.6%	1.3%	0.2%	0.1%	0.2%	1.4%	0.7%	4.3%
Grand Rapids, MI	82.0%	9.1%	1.4%	0.1%	0.1%	0.4%	2.2%	0.5%	4.2%
Hartford, CT	81.2%	7.7%	2.6%	0.1%	0.0%	0.2%	1.8%	0.8%	5.7%
Houston, TX	81.0%	9.4%	2.0%	0.1%	0.1%	0.2%	0.9%	1.3%	4.9%
Indianapolis. IN	83.4%	8.0%	0.9%	0.1%	0.1%	0.2%	1.3%	1.0%	5.0%
Jacksonville, FL	80.3%	8.5%	0.9%	0.1%	0.2%	0.6%	1.6%	1.5%	6.4%
Kansas City, MO-KS	83.8%	7.8%	0.9%	0.2%	0.1%	0.2%	1.2%	0.7%	5.2%
Las Vegas, NV	78.7%	9.8%	3.3%	0.2%	0.3%	0.2%	1.4%	2.1%	4.1%
Los Angeles, CA	75.0%	9.5%	4.8%	0.3%	0.3%	0.6%	2.5%	1.1%	5.9%
Louisville, KY-IN	82.2%	8.5%	1.7%	0.0%	0.0%	0.3%	1.3%	1.0%	4.9%
Memphis, TN-MS-AR	86.1%	9.0%	0.7%	0.1%	0.1%	0.2%	0.9%	0.6%	2.5%
Miami, FL	77.7%	9.2%	3.1%	0.5%	0.2%	0.7%	1.4%	1.4%	5.7%
Milwaukee,WI	81.5%	7.5%	2.6%	0.2%	0.1%	0.5%	2.3%	0.3%	5.0%
Minneapolis-St. Paul, MN-WI	77.4%	8.1%	4.5%	0.2%	0.1%	0.8%	2.4%	0.6%	5.9%
Nashville, TN	80.9%	9.2%	0.8%	0.2%	0.1%	0.1%	1.5%	1.0%	6.2%
New Orleans. LA	78.6%	9.3%	2.6%	0.3%	0.1%	1.2%	2.5%	0.9%	4.5%
New York, NY-NJ-PA	50.3%	6.3%	30.9%	0.8%	0.0%	0.7%	5.5%	0.8%	4.7%
Oklahoma City, OK	82.9%	8.8%	0.6%	0.1%	0.1%	0.2%	2.1%	1.0%	4.2%
Orlando, FL	80.3%	10.4%	1.3%	0.3%	0.3%	0.3%	1.1%	0.9%	5.0%
Philadelphia, PA-NJ-DE-MD	72.3%	7.2%	9.8%	0.3%	0.1%	0.6%	3.4%	0.8%	5.5%
Phoenix, AZ	75.8%	11.2%	1.8%	0.3%	0.3%	0.7%	1.3%	1.2%	7.4%
Pittsburgh, PA	76.6%	8.3%	5.6%	0.1%	0.1%	0.3%	3.4%	0.5%	5.1%
Portland, OR-WA	70.4%	8.8%	6.1%	0.2%	0.2%	2.0%	3.4%	0.7%	8.1%
Providence, RI-MA	81.3%	8.5%	2.4%	0.2%	0.0%	0.2%	3.0%	0.6%	3.8%
Raleigh, NC	79.0%	8.9%	0.9%	0.2%	0.1%	0.1%	1.3%	0.5%	9.1%
Richmond, VA	81.2%	8.7%	1.7%	0.3%	0.1%	0.7%	1.4%	0.9%	5.2%
Riverside-San Bernardino, CA	79.8%	10.9%	1.2%	0.1%	0.3%	0.2%	1.5%	1.0%	5.0%
Rochester, NY	80.9%	7.9%	2.2%	0.2%	0.2%	0.5%	3.0%	0.4%	4.8%
Sacramento, CA	76.6%	9.2%	2.2%	0.2%	0.3%	1.3%	1.7%	0.8%	7.9%
St. Louis,, MO-IL	83.6%	6.9%	2.1%	0.1%	0.1%	0.2%	1.8%	0.6%	4.6%
Salt Lake City, UT	74.5%	12.0%	3.2%	0.1%	0.2%	0.7%	2.2%	0.5%	6.7%
San Antonio, TX	79.2%	11.2%	1.8%	0.1%	0.1%	0.2%	1.8%	1.0%	4.6%
San Diego, CA	76.5%	8.8%	2.6%	0.2%	0.5%	0.4%	3.1%	1.2%	6.6%
San Francisco, CA	57.2%	9.6%	17.3%	0.7%	0.4%	1.9%	4.7%	1.2%	7.0%
San Jose, CA	75.3%	10.3%	4.0%	0.3%	0.3%	1.6%	2.2%	0.9%	5.0%
Seattle, WA	66.1%	10.0%	10.7%	0.3%	0.3%	1.1%	4.1%	0.7%	6.7%
Tampa-St. Petersburg, FL	78.9%	9.0%	1.3%	0.3%	0.2%	0.5%	1.4%	1.1%	7.3%
Tucson, AZ	76.8%	10.0%	2.1%	0.2%	0.4%	1.5%	2.1%	1.3%	5.5%
Virginia Beach-Norfolk, VA-NC	81.2%	8.5%	1.4%	0.1%	0.1%	0.4%	2.8%	1.0%	4.4%
Washington, DC-VA-MD-WV	65.8%	9.2%	13.0%	0.5%	0.1%	0.9%	3.3%	1.0%	6.1%
UNITED STATES	76.3%	9.0%	4.9%	0.2%	0.1%	0.5%	2.6%	0.9%	5.3%
Derived from American Community Survey 2018.

Photograph: Interstate 5 in Orange County California, with elevated express lanes (by author)

Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is a Senior Fellow of the Center for Opportunity Urbanism (US), Senior Fellow for Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), and a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California). He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed by Mayor Tom Bradley to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. Speaker of the House of Representatives appointed him to the Amtrak Reform Council. He served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

If You Improve It, They Will Come

Aaron M. Renn — Fri, 13 Sep 2019 21:29:59 -0400

My latest piece is now online at City Journal. It’s a recap of the Indianapolis BRT and Columbus free downtown transit success, as well as a look at Kansas City’s contemplation of free transit citywide. Thanks to a commenter here who originally alerted me to KC’s plans. Here’s an excerpt:

Kansas City is considering the complete elimination of transit fares. In major cities, fares commonly pay for a substantial amount of the overall cost of service operations, and trains and buses are often overcrowded. In Kansas City, though, fares cover only a fraction of costs—about 12 percent—and transit remains underutilized. If it goes forward with the plan, Kansas City would become the first major city to go entirely fare-less—building on the success already enjoyed by the city’s free streetcars. Urbanists have turned against streetcars because they’re slow and expensive, and often plagued by operational problems and lagging ridership. In Kansas City, though, streetcar ridership has exceeded expectations; once forecasted to run 2,700 daily rides, the streetcars now carry over 5,700, adding up to 2 million annually. Again, free ridership likely played a huge role in that success.

Click through to read the whole thing.

Photo Credit: Jason Doss, CC 2.0 License

Are States an Anachronism?

Aaron M. Renn — Thu, 08 May 2014 01:38:00 -0400

Obviously states aren’t going anywhere anytime soon, but a number of folks have suggested that state’s aren’t just obsolete, they are downright pernicious in their effects on local economies.

One principal exponent of this point of view is Richard Longworth, who has written about it extensively in his book “Caught in the Middle” and elsewhere. Here’s what he has to say on the topic:

In the global era, states are simply too weak and too divided to provide for the welfare of their citizens…The reason is a deep, intractable problem. Midwestern states make no sense as units of government. Most Midwestern states don’t really hang together – politically, economically, or socially. In truth, these states and their governments are incompetent to deal with twenty-first century problems because of their history, rooted in the eighteenth and nineteenth centuries.

Longworth expounds upon this to identify a series of specific issues, which I’ll put into my own terms.

1. States do not represent communities of interest. With some exceptions, states consist of cities, rural areas, and regions that have very distinct histories, geographies, economies, and and event cultures. As a result, it is incredibly difficult for legislators and leaders from various parts of the state to find common cause.

Here’s how Longworth describes Illinois:

Illinois, like Indiana, is three states, and for the same reasons. The southern third, again south of I-70, is a satellite of the South – more give to conservative religions, gun racks in pickup trucks, and a deeply conservative Republicanism….Most of the rest of the state is called Downstate to differentiate it from Chicago, even though some of it, such as Rockford, is actually north of the city. It is an unfocused place…what unites this heterogeneous region is a dislike of the third region, Chicago. Chicago dominates Illinois – politically and economically…If the rest of Illinois obsesses about Chicago, Chicago gives the impression – an accurate one, in fact – of never thinking about the rest of Illinois.

Additionally, I might add my observation that this creates a situation where the policies which are right for one area may be wrong for another. Since it is the nature of governments to promote uniform rules, this often leaves one or even all regions of a state with suboptimal rules. In fairness, there are are often some types of flexibility, such as that provided by different classes of cities. But important macro policies remain one size fits all.

Consider Illinois. It’s a combination of a global city core in Chicago, a Rust Belt hinterland, and a southern fringe region. State policy is set by the Chicago elite as a general rule, and predictably it follows a big city, global city favorable model: strong home rule powers for large municipalities, a high tax/high service type model, strong public sector unions, etc. This pretty much works for Chicago, but for downstate it puts their communities in a major economic vice since they don’t benefit from global city friendly policies and are competing against other places that have optimized in other ways.

Indiana being one example. It is pretty much the opposite. Its largest city region is only about 25% of the state’s population, meaning Indiana is dominated by rural and small city constituencies. As a result, Indiana has optimized for a “Wal-Mart” strategy such as through its low-service/low-tax approach, weak environmental rules, and very weak (I’d argue nearly non-existent) home rule powers for even its largest municipalities. This is great if you are a small manufacturing city trying to beat out Ohio, Michigan, and Illinois for low wage manufacturing and distribution jobs (which sounds bad but is realistically the best short term play these places have). But it’s pretty terrible if you are Indianapolis and trying to fight to have a place in the global economy, attract choice talent, build biotech and high tech business clusters, etc.

2. Arbitrary state lines encourage senseless border wars. With limited exceptions, the major cities of the Midwest (and often elsewhere around the country) were founded on major bodies of water like rivers, lakes, or an ocean. These were often boundaries of states, thus major cities are frequently at the edge, not the center of states. This means not infrequently you find multi-state metro areas, which creates structural conflicts of interest. The logical economic unit is the metro area, but it matters from a local fiscal point of view (i.e., the ability to collect income, sales, and property taxes) where particular businesses locate. Thus we frequently see the case where localities spend tons of money on incentives simply to get businesses to relocate within the same metro area. You can have bidding wars without multiple states (such as neighboring suburbs competing over a Wal-Mart), but these seldom involve major state level incentives.

Longworth again summed this up masterfully in a recent blog post called “The Wars Between the States” where he documents the incentives being doled out to convince companies to move back and forth across the state border in the Kansas City metro area:

It would seem impossible for Midwestern states to get any sillier and more irrelevant, but they’re trying. In a time of continuing recession and joblessness, with crunching budget problems, failing schools, crumbling infrastructure and no real future in sight, these states have decided to solve their problems by stealing jobs from each other.

The most recent example is the so-called “border war” between Kansas and Missouri, as the two states compete to see how much money they can throw at businesses to move from one state to the other. The focus of this war is Kansas City — both the Kansas one and the Missouri one, basically a single urban area divided not only by an invisible line down the middle of a street but by a mindless hostility that keeps its two parts from working together.

…

Competition with “Europe, India, China and the rest of the world” has nothing to do with this juvenile job-raiding. In fact, this “border war” keeps Missouri and Kansas from competing globally — indeed, robs them of the tools they need to compete globally. Some rational thought shows why. It’s precisely these states’ inability to compete globally that causes them to declare war on the folks next door. In a global economy, Kansas and Missouri aren’t competing with each other, any more than Illinois, Indiana and Wisconsin are competing with each other. The real competition is 10,000 miles away and all Midwesterners know that we’re losing it.

[ Update 5/5/2014: It looks like Missouri and Kansas may be about to declare a truce in their border war ]

3. Many state capitals are small, isolated, and cut off from knowledge about the global 21st century economy. In some states the state capital is a large city that is well-connected to the global economy – Atlanta, Indianapolis, St. Paul, and Nashville come to mind. But often state capitals were selected because they were in the geographic center of the state, not because they were major centers in their own right. Some, like Indianapolis, managed to grow into major cities. But many others did not. Think Springfield, Jefferson City, Frankfort, etc. This means that the state capital of many states is not very large, and often not very plugged into the global conversation. Longworth again captures the implications of this:

There is another reason why state governments are botching the economic needs of their states. Some 150 to 200 years ago, state capitals were picked not for economic reasons, but for geographic ones. Many of them remain in this isolated irrelevance today, far from the real action of any of the territories they are meant to govern…In this era of globalization, with overnight shipping and instant communications, this shouldn’t make any difference. In fact, it does. Global cities such as Chicago depend on face-to-face contact, and isolated state capitals live out of earshot of this conversation. The winds of globalization are transforming state economies and generating new thinking about state futures, but the news takes a long time to get to the state houses and legislatures.

4. Metro areas are the engines of the modern economy, but the rules for municipal and regional governance are set by states, and often in a manner that is directly contrary to urban interests. In this Longworth channels the Brookings Institution, which has tirelessly documented the importance of metro area economies to the nation as well as all the ways states, frequently controlled by non-urban legislators who are actively fearful of cities, have often imposed enormous burdens on those metro areas by tying them down with a morass of Lilliputian rules. Again Longworth:

States set the boundaries of urban jurisdictions and decide whether or how they can merge. They tell cities who they can tax and how, whether this helps cities or not. State governments help finance local infrastructure and dictate, from miles away, how that money is spent. State priorities on education and workforce programs leave city residents incompetent to deal with the global job market. Highway funds go to rural areas, not to cities that need them more; job creation money goes to wealthy areas, not to the core of battered cities.

Some urban regions have more or less given up any hope that their state will ever change or be a positive partner, such as Kansas City, as Longworth notes:

When the Greater Kansas City Community Foundation issued a report on the city’s future, it pretty much told the state to get out of the way. “Nations and states still matter,” it said. “They particularly can do their cities harm. But cities have to take the lead. San Diego did not become San Diego by looking to Sacramento, not Seattle to Olympia.” When the authors talked about Sacramento and Olympia, one felt their really meant Jefferson City.

I’d probably go even further than Longworth. I think that historically states imposed rules on cities deliberately designed to hobble their growth. For example, the laws that restricted branch banking in most states until recently had the effect of keeping big city banks from buying up rural and small town banks around the state. The end game of course is that when deregulation occurred, the banks in most big cities were so small because of these rules, they were easy prey to out of state acquirers. Thus most states saw basically their entire indigenous banking industry swallowed up.

Also, states seem to more or less treat their urban regions like ATM machines. Every study I’ve seen documents how, contrary to popular belief, cities actually are net exporters of tax dollars to their state government. Marion County, Indiana for example (Indianapolis), sends a net of about $400 million a year to the state – enough to cover the entire public safety budget of the city.

I actually don’t have a problem with some redistribution as cities are generally economic engines and more efficient to boot, so they should be expected to be donors at some level. On the other hand, when states proceed to starve those cities of the critical funds they need stay healthy and strip them of the powers they need to manage their own affairs, this is like sticking a knife in the golden goose.

Again I can use Indianapolis as an example. As part of a tax reform package the state took over all operating educational funding for K-12. So far so good. But they also imposed a funding formula that severely disadvantaged growing suburban districts by denying them equal per pupil funding. The net result was a major funding problem for the best suburban Indianapolis districts like Carmel, Fishers, etc. Many of these districts had to go to referendums to raise local taxes to make up the difference (which was no doubt the state’s plan all along – it simply outsourced the unpleasantries of a tax increase to localities). Here is a state that claims it wants to be in the biotech business, the high tech business, etc, yet it singles out the school districts where the labor force you are trying to attract for those industries is likely to live for outsized cuts. That hardly seems like a winning strategy.

Indiana also keeps its cities on a tight leash, with some of the weakest home rule powers around. Indianapolis basically can’t do much without legislative approval (a transit referendum, for example, will require specific legislative authorization). And the legislature seems to like it that way. Indiana’s property tax caps, which I support generally from a percentage of assessment perspective, include a lot of poorly advertised gotchas. For example, regardless of assessed value, the total tax levy can only grow at a rate equal to the average personal income growth over the last six years. I’ll caveat this by saying I haven’t studied this in detail and thus may be a bit off base, but the levy cap appears to be a de facto spending cap at current levels regardless in growth of tax base. This may be ok for some, but not others that are growing say their commercial office space base at a rapid clip and need to expand infrastructure and services to support it.

Clearly many of these policies have no real benefit to the Indianapolis region, which is more or less being asked to be the economic engine of the state and finance state government without being given the tools to do that job property.

The list goes on but that should give you a flavor. Similar things occur around the country.

To this list I’ll add one of my own, which has also been richly illustrated by Jim Russell. Namely,

5. States can’t to much to help, but they can do a lot to hurt. A lot of the national debate seems to center on whether the “red state” or “blue state” model makes the most sense. But to a great extent, policy almost doesn’t matter. In Ohio, with one set of state policies, Columbus thrives while Cleveland struggles. Tennessee is a right to work state with no income tax, but Nashville booms while Memphis stagnates. Texas is doing great with its red state model, but Mississippi and Alabama not so much. And even within Texas, there are plenty of places that are hurting badly.

While good policy can set the stage for growth, it can’t guarantee local economies will prosper. But bad policies can hurt regions that otherwise would thrive. Extremes of either the blue or red model seem to lead to problems. Witness California, for example, which seems to be holding up a sign to business saying, “Get lost.”

This puts states in the difficult position of being almost being able to aspire at best to being a neutral influence on their own economy. But it’s easy for them to screw things up.

This piece first appeared at The Urbanopihle on July 11, 2011.

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.

States map image by Bigstock.

Prairie Populism Goes Bust As Obama’s Democrats Lose The Empty Quarter

Joel Kotkin — Sun, 04 Nov 2012 01:34:04 -0400

Along Phillips Avenue, the main street of Sioux Falls, South Dakota, the local theater’s marquee is a tribute to the late Senator and 1972 presidential candidate George McGovern, who was buried last month, and is still regarded as a hero by many here. But with McGovern gone, it seems that the Democratic tradition of decent populism he epitomized was being interred along with him.

In his landmark 1981 book, The Nine Nations of North America, Joel Garreau deemed the vast region stretching from the southern Plains well past the Canadian border The Empty Quarter. Along with the western strip of the neighboring Bread Basket that stretches up from central Texas through the Dakotas, the Quarter—covering much of the nation’s land and home to many of its vital natural resources—is in open revolt against the Democratic Party, threatening the last remnants of prairie populism.

Although long conservative and GOP leaning, the Empty Quarter—containing Nevada, Utah, Wyoming, Idaho, Montana, and most of Alaska, along with inland California and Washington and parts of Colorado, New Mexico, and Oregon—has a proud progressive tradition as well. Over the past half-century, many of the Democratic Party’s most respected leaders —McGovern, Senator Majority Leaders Mike Mansfield of Montana and Tom Daschle of South Dakota, and powerful figures like North Dakota’s Byron Dorgan and Kent Conrad—have represented the Plains.

The tradition is still revered there, but today’s Democrats are becoming an endangered species as the party has become ever more distinctly urban, culturally secular and minority dominated.

While Obama lost most of the Quarter in 2008, this year polls show that he’s likely to be crushed there, despite the booming economy in many of the states. Obama’s popularity has dropped more in North Dakota, which has the nation’s lowest unemployment rate, than any other state.

Amidst the growing anti-Obama tide, progressive Democrats in most of the Quarter have been increasingly marginalized, both by their own party and by voters. In the past two years, Republicans picked up a Senate and House seat in North Dakota, and look likely to pick up another this year, along with a Senate seat in Nebraska, and quite possibly another in Montana. They are also poised to claim the only remaining Democratic House seat in Utah, if Mia Love’s lead over Rep. Jim Matheson holds up.

By the end of this election, it's possible that only two classic Prairie Democrats—South Dakota’s Tim Johnson and Montana’s Max Baucus—will remain in the Senate, where they once formed a powerful caucus. The Plains states, plus Alaska, account for 50 Congressional seats and an equal number of electoral votes—more than Florida, North Carolina and New Hampshire combined.

Why has this occurred? One problem, notes former Daschle top economic aide Paul Batcheller, lies with the “nationalization” of the Democratic Party—and its transformation from an alliance of geographic diverse regions to a compendium of narrow special-interest groups, so that under Obama, the Democratic Party has essentially become the expression of urban-dwellers, greens and minorities, along with public employees.

This, says Batcheller, has “made it easier for Republicans to paint Democrats as in cahoots with the likes of Ted Kennedy, Nancy Pelosi, etcetera. And because politics has always been fairly civil here, having those coastal boogeymen to use has made it easier to paint Prairie Dems as having gotten Potomac Fever.”

He also points to “changes in the media”—especially cable TV—that have made it more difficult for grassroots Democrats to make their case for their own interests, outside of the increasingly polarized national debate. At the same time, Obama’s policies—focused largely on constituents in dense coastal cities—have widened the gap between the Plains and the Democrats. It is increasingly difficult to be a successful Prairie progressive when that means striking out consistently against the very industries, from large-scale agriculture to fossil fuels, at the center of these economies.

At the same time, the failings of Democratic big states, most notably California and Illinois, are not exactly advertisements for the virtues of modern progressivism. Particularly galling, notes Mike Huether, the mayor of Sioux Falls, have been the huge deficits and expanded welfare spending associated with the Obama Administration.

“This is a fiscally conservative place, we don’t like deficits,” notes Huether, a lifelong Democrat whose city of 156,000 operates with a fiscal surplus. “People here want self-sufficiency. They are happy to give a hand up but they see that as short term and that’s it.”

And the region’s self-sufficiency is an increasingly important part of our national debate, especially about energy independence. Although often dismissed as a land of rubes and low-end jobs, a study of the Plains I conducted with the Praxis Strategy Group and Texas Tech University found that, overall, it has outperformed the rest of the country in virtually every critical economic measurement from job creation and wage growth to expansion of GDP.

The area has also thrived demographically, with population growth well above the national average. Most of this has taken place in the region’s flourishing urban centers, from Ft. Worth and Midland, Texas to Sioux Falls, Bismarck, Fargo, Oklahoma City and Omaha. This growth includes migration from still de-populating smaller towns in the region, but increasingly includes migrants from the coastal areas as well as immigrants.

More people now arrive in Oklahoma City from Los Angeles than the other way around. And these arrivals are hardly poor Okies pushed back unwillingly; the Plains cities have become magnets for educated people. Over the past decade, the number of people with BAs in Sioux Falls has grown by almost 60 percent; Bismarck and Fargo saw growth of over 50 percent, while Oklahoma City, Omaha and Lubbock enjoyed forty percent increases. In contrast, the educated population of San Francisco grew at 20 percent and that of New York by 24 percent.

Any coastal denizen who spends time in these cities may be surprised by the tolerance and lack of bible-thumping one encounters there. Social issues, notes Mayor Huether, have never been drivers in the Plains as they have been in parts of the Deep South. A quiet Nordic spirituality prevails here, rather than evangelical enthusiasm; people and politicians generally do not wear their faith on their sleeves. The real issue in the Plains centers around the future of the economy, and how best to bolster family and community; the Obama program, with its interest-group agendas, simply does not translate well in this environment.

Ultimately, the red tide sweeping over the Plains is bad news, not simply for Democrats but for the country, part of the trend noted by Batcheller in which moderating regional forces within both parties—New England Republicans and Blue Dog Democrats—are losing ground.

Prairie Democrats are crucial for ensuring that producers tangible staples—food, fiber and energy—have a space within their party’s tent, along with the big-city coastal consumers of those resources. Never mind the conservative cliché: If Democrats lose their remaining hold on the Plains, the nation’s parties will truly be split between makers and takers.

This region is likely to become more important over the coming decades, providing much of the food needed for world markets as well as significant share of our new domestic energy. Its manufacturing, technology and service industries are also growing rapidly, integrating the area more into the national and global economies.

Batcheller, among others, believe that the Plains Democrats may not become extinct, but their future will be limited in the increasingly polarized, and nationalized, political order. On the local level, particularly on key infrastructure projects like Lewis and Clark water project that is being built to meet the needs of Sioux Falls and its environs, Republicans and Democrats are largely in agreement. Neither tea-party extremists nor greens can block progress towards widely accepted local infrastructure goals.

One can only hope that the Prairie Democrats manage to survive. They have contributed a unique brand of civically minded, decent social democracy that added much to the national debate. Egalitarian in intent, their brand of aspirational liberalism, fully content and compatible with notions of individual achievement and hard work, offers an alternative to the “know nothing” extremism increasingly dominant in both parties. This tradition of progressive decency could be sorely missed in the years ahead.

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 at The Daily Beast.

Sioux Falls photo by Jon Platek..