Heartland

The 2013 Best Cities For Job Growth

Joel Kotkin and Michael Shires — Mon, 06 May 2013 15:48:27 -0400

The 2013 edition of our list shows many things, but perhaps the most important is which cities have momentum in the job creation sweepstakes. Right now the biggest winners are the metro areas that are adding higher-wage jobs thanks to America’s two big boom sectors: technology and energy.

Our rankings are based on short, medium and long-term employment performance, and take into account both growth and momentum — whether growth is slowing or accelerating. (For a detailed description of our methodology, click here.) Consequently, areas that have made the strongest recoveries from deep setbacks often do well. Nowhere is this clearer than in the case of the San Francisco-San Mateo-Redwood City metropolitan division, our top-ranked large metro area (urban regions with more than 450,000 jobs). Over the last year, employment in the San Francisco area expanded a remarkable 4.1%, and is up 3.3% since 2008.

A decade ago, the San Francisco area was reeling from the collapse of the last dot-com bubble; the damage was so deep that today it has only 0.6% more jobs than in 2001. Its sharp recent growth is primarily in the information sector, which has expanded a torrid 21.3% since 2009.

Much the same can be said about San Jose-Sunnyvale-Santa Clara, better known as Silicon Valley, which is No. 7 on our large metro area list due to 3.4% job growth last year, and 2.3% growth since 2008; it is also propelled by 25% growth in information jobs since 2007. Yet looking at the longer term, the Valley, like San Francisco, is still rebounding from a deep downturn connected to the dot-com disaster of a decade ago. In fact, the Valley is still down almost 40,000 jobs from 2001.

Is California Pulling Ahead Of Texas?

Some East Coast boosters of the Golden State are making this claim, but we don’t see it in this year’s numbers. Besides the tech-rich Bay Area, home to two of our top 10 large metro areas, there are no other major California cities near the top. Most of the state’s big metros are in the poor to middling range over the long term; only Riverside-San Bernardino (45th place on our big cities list) has 10% more jobs than a decade ago. Los Angeles, the state’s dominant urban region, has lost some 120,000 jobs since 2001.

In contrast, the Texas juggernaut rolls on. Growth there has not only been steady, it’s been widely spread across the state. Texas boasts a remarkable four major metros in our top 10, led by Ft. Worth-Arlington (No. 4), Houston-Sugarland-Baytown (No. 5), Dallas-Plano-Irving (No. 6 ) and Austin-Round Rock, which slips from first place last year to 10th. The state’s other big city, San Antonio, comes in at a very healthy No. 12.

All these metro areas have more jobs than they did a decade ago — often a lot more. Since 2001, employment in Houston has expanded 20%; in Ft. Worth, it’s up roughly 16%; Dallas; 11%; Austin, a remarkable 26.5%; and San Antonio, 18.4%.

The Energy Boomtowns

The unconventional oil and gas boom has helped turn Texas into an economic juggernaut, particularly world energy capital Houston, but growth has also been strong in tech, manufacturing and business services. You see this same kind of blending of energy and other sectors in other strong growth economies elsewhere in the U.S., such as No. 3 Salt Lake City, No. 9 Denver and No. 15 Oklahoma City.

But the real evidence of energy’s power can be seen in smaller metro areas. Oil-rich Midland, Texas, places first on our list of smaller metro areas (those with less than 150,000 jobs) and also first overall among the country’s 398 metropolitan areas. Nipping at its heels in second place in both categories is Odessa, Texas. On our medium-size cities list, energy towns with strong growth include No. 4 Corpus Christi, Texas; No. 5 Bakersfield, Calif.; and No. 6 Lafayette, La.

Affordability + Quality of Life = Success

But you don’t have to be a huge tech hub or energy capital to generate new jobs. The No. 2-ranked place in our big metro ranking, Nashville-Davidson-Murfreesboro-Franklin, Tenn., reflects the power of economic diversity coupled with ample cultural amenities, pro-business policies and a mild climate. Nashville’s 3.8% expansion in employment last year, and 7% growth since 2008, has been propelled by business services, education and health. There’s also been a recent recovery in manufacturing, up over 9% last year, as well as retail and wholesale trade. Like the Texas cities, Nashville has registered long-term growth as well, with 112,000 jobs added since 2001, a nice 16.6% increase.

Much the same can be said about Charlotte-Gastonia-Rock Hill, N.C., No. 8 on our big city list, whose job base grew 3.3% last year. Virtually every business sector has been on the rebound since 2009, including financial services, despite Bank of America’s continuing troubles. Overall the local economy has added 100,000 jobs since 2001, up almost 13%.

Steady, diverse growth can be seen in other low-cost and business-friendly towns such as our No. 11 big metro area, Raleigh Cary, N.C.; No. 13 Columbus, Ohio; and No. 15 Indianapolis. The shift towards stronger growth in areas away from the coasts has continued, at least in the more attractive metro areas.

Who Doesn’t Have It?

Of course, any list has its share of losers as well as winners. Sadly this includes long-suffering old industrial cities such as our last-placed big metro area, Newark-Union, N.J., which is followed, in order, by Saint Louis, MO-IL; Cleveland-Elyria- Mentor, Ohio; and Providence-Fall River-Warwick RI-MA. All but Providence, which stayed about even, slipped from last year’s rankings.

But not all factory towns are headed in the wrong direction. No. 51 Detroit-Livonia-Dearborn advanced an impressive 11 places from last year’s list. The key here has not been the much talked about attempt to turn downtown Detroit into a cool place, but the resurgence of the auto industry. Manufacturing employment, concentrated in the region’s suburbs, is up over 18% since 2009 after decades of tumultuous losses.

Also flailing a bit have been many of our largest, and most often celebrated, metros. Believe it or not, Detroit comes in one place ahead of Chicago-Joliet-Naperville ,Ill., which continues to promote itself as one of the nation’s great comeback stories, but in reality has continued to lose ground. You can tell the same tale about No. 46 Philadelphia, Pa., No. 41 Portland-Hillsboro-Vancouver OR-WA, and No. 37 Miami, which dropped a staggering 16 places despite the much celebrated recovery of its condo market. Selling to South America flight capital (legal or otherwise) and sun-deprived Europeans does not seem to be doing enough to revive the region’s overall economic vigor.

There are also some signs that the big beneficiaries of the Bernanke-Obama-Bush economic policy may be losing some momentum. New York City, the major winner from the “too big to fail” banking bailout, fell seven places from last year to No. 18. Even Washington-Arlington-Alexandria, D.C., the nation’s prime beneficiary of crony capitalism and fiscal bloat, has lost steam, falling 10 places to No. 26 — a big decline from its No. 6 rankings in 2010 and 2011. We are usually loath to celebrate declines, but Washington’s loss, reflecting a slowdown in government growth, may be evidence that some equilibrium between the public and private sectors is slowly being restored.

Joel Kotkin is executive editor of NewGeography.com and a distinguished presidential fellow in urban futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

Michael Shires, Ph.D. is a professor at Pepperdine University School of Public Policy.

This piece originally appeared at Forbes.com.

Enterprising States 2013: Getting Down to Small Business

Praxis Strategy Group — Wed, 01 May 2013 01:20:55 -0400

The following is an exerpt form a new report, Enterprising States, released this week by the U.S. Chamber of Commerce Foundation and written by Praxis Strategy Group and Joel Kotkin. Visit this site to download the full pdf version of the report, or check the interactive dashboard to see how your state ranks in economic performance and in the five policy areas studied in the report.

Nothing better expresses America’s aspirational ideal than the notion of small enterprise as the primary creator of jobs and innovation. Small businesses, defined as companies with fewer than 500 employees, have traditionally driven our economy, particularly after recessions. Yet today, in a manner not seen since the 1950s, the very relevance and vitality of our startup culture is under assault. For the country and the states, this is a matter of the utmost urgency.

The central motor of the job engine clearly is not firing on all cylinders. Historically, small business has accounted for almost two-thirds of all net new job creation, but recent research shows that the rates of new business startups are at record lows. The “gazelle companies”—fast-growing firms, mostly younger ones—have traditionally made outsized contributions to new job creation. After previous recessions, these businesses drove job growth and, perhaps more important, created innovations that often spread to larger, older, more established firms, which sometimes later acquired them.

Weak job growth has touched the entire economy. Gross domestic product growth is weak, unemployment remains at nearly 8%, and business sentiment is far from optimal. Despite high stock prices and consistently strong corporate profits, the rate of employment growth remains lower than the rate of the expansion of the workforce. Given the understandable focus of larger firms on boosting productivity and on investing capital into technology, it’s highly unlikely these companies will create enough jobs to dent our huge and growing employment deficit.

Policymakers ignore small business at their own peril and that of the economy.

The Changing Nature of Small Business

Small business may be down, but it is far from out. There have been some small, subtle upward shifts in employment in three of the industries—construction, manufacturing, and retail—that bore the brunt of the recession-driven job losses. Any sustained uptick in growth will further widen the opportunities for small business to expand and perhaps recover something of its past vigor.

It is critical that states and communities that embrace a pro-enterprise vision address a rapidly changing small business environment. Small business today reflects a host of ethnic, social, and generational changes. Successful programs will need to adapt to these new realities that reflect a far more diverse, and profoundly different, set of players.

Immigrants constitute a growing and important part of the entrepreneurial landscape. Even in the midst of the recession, newcomers continued to form businesses at a record rate. The number of women-owned firms has grown at one and a half times the rate of other small enterprises over the past 15 years. These companies now account for almost 30% of all enterprises. Finally, there is the issue of generational change. Baby boomers were, on the whole, a profoundly entrepreneurial generation, and by many measurements their Generation X successors have proven even more so. The millennial generation, based on recent assessments, may be somewhat less entrepreneurial than their predecessors.

We are also witnessing the rise of a new kind of enterprise that often employs no more than the proprietors but frequently provides quite sophisticated high-level products or services. In many cases, these “jobless entrepreneurs” include corporate executives, technicians, and marketing professionals who, by either choice or necessity, have chosen to strike out in their own micro-enterprises. A large portion of this growing “1099 economy” comes from the growing ranks of boomers who are no longer willing or able to work for a larger enterprise. According to the Census Bureau, small business without payroll makes up more than 70% of America’s 27 million companies, with annual sales of $887 billion.

The States Get Down to Small Business

Every state has policies and programs that are intended to encourage entrepreneurship and support small business development and expansion. Many states have introduced legislation or established programs to focus on startup companies, and many states have bolstered policies targeted at helping existing businesses grow and expand their markets. State funding of programs for entrepreneurial development is estimated to have increased by 30% between 2012 and 2013.

States vary considerably in the policies, regulations, and taxes that affect small business. Most states have an array of loosely integrated small business programs, although some have a more comprehensive, integrated small business policy and program framework. No state has the “best” tax policy for all entrepreneurs. Instead, different states have tax policies that suit certain types of companies better than others. Consequently, the states that are best for new businesses are not always the most favorable for existing small businesses; the states that are best for one business sector may not be best for another.

States and cities should consider small business development not as a separate cause, but as a basic building block for economic growth. Even if state governments can do little to promote enterprise and small business development directly, there are things they can do to increase the chances that entrepreneurs will thrive. Smart, pragmatic economic policymaking at the state level can play an instrumental role in fostering startups and growing companies, particularly when programs are effectively deployed right where the businesses are located.

The following are some new and innovative policy and program approaches that states are employing and/or supporting to create and expand small businesses, often in cooperation with local and regional development organizations:

Accelerator initiatives that focus on starting high-growth firms by turning startups into enduring companies.
Economic gardening initiatives that focus on expanding existing firms with strong growth potential.
Business plan competitions to identify companies with exciting ideas and high potential.
Business ecosystem initiatives, often with a regional focus, that take a comprehensive approach to creating an environment that is highly conducive to startups.
Workforce development initiatives that help small businesses find and train the talent they need to operate and compete.
Seed and venture funds that focus on startups and expanding firms.
Networking and collaboration initiatives that bring small businesses and self-employed entrepreneurs together with large companies and universities.
International trade programs that help small businesses reach out to new global export markets.
Streamlined state administrative processes and regulatory procedures for small business by cleaning up the DURT (delays, uncertainty, regulations, taxes) that impede small business success.
Broadband investments that provide small businesses of all types with the online access necessary in the 21st century.

Governors of states recognize the importance of small businesses and often take the lead in reforming state policy and service delivery to make growth and commerce easier for small business. Governors can offer fast-track access to financial resources and a full slate of state services that help small businesses connect with technical expertise, customers, suppliers, and state agencies that interact with small business as regulators or partners in development.

State and local chambers of commerce are on the front lines of promoting a pro-business free enterprise agenda and thwarting anti-business legislation, regulations, and rules. Across the country, chambers of commerce lead the way in advocating on behalf of their members for lower costs of doing business, fairer taxes, fairer regulations, and less regulatory paperwork. They work with the U.S. Chamber of Commerce, governors, industry, and professional associations to pursue outcomes that are beneficial to all businesses and, thereby, advance America’s free enterprise economy.

Visit this site to download the full pdf version of the report, or check the interactive dashboard to see how your state ranks in economic performance and in the five policy areas studied in the report.

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.

Genealogy Of Rust Belt Chic

Jim Russell — Wed, 24 Apr 2013 01:38:40 -0400

Some people don't like the term "Rust Belt". Others absolutely hate the word "chic". Please don't call the shifting mesofacts of dying Great Lakes cities "Rust Belt Chic". Given the reaction, a lot of it negative, I decided to blog about how I came up with Rust Belt Chic. Way back in 2006, Shittsburgh was associated with a kind of urban chic. The South Side Slopes celebrated in the New York Times:

"If Pittsburgh's market were on steroids like New York's, this would've happened a long time ago," said one developer, Ernie Sota, referring to the recent spark of interest here. "But Pittsburgh's kind of like an eddy. Things move slowly here."

Mr. Sota, 56, is a prolific local developer who is constructing a series of nine 'green' town houses, called Windom Hill Place, into a lush hillside here. He was drawn to the Slopes by the views and villagelike feel, which, for him, conjure memories of visits to Prague and Budapest.

"It's just kind of quirky, funky and real, more organic, built by Europeans and other immigrants," he explained. "The only other American cities that I find as geographically interesting are maybe San Francisco and Asheville, N.C."
Emphasis added. At the time, I thought of Sota's sense of Pittsburgh place as unique to the city. I'm not from Pittsburgh. I don't live in Pittsburgh. I didn't go to school there. I'm a geographer. Pittsburgh appeals to my sensibilities. Pittsburgh is my Paris.

The geographic scope of Pittsburgh urban chic became Rust Belt Chic upon meeting Phil Kidd and John Slanina in Erie, PA for a Rust Belt Bloggers summit. They introduced me to Youngstown. I was hooked.

Rust Belt Chic always will be ironic. People are attracted to shrinking city hellholes. However, the hellhole part is misunderstood. What I mean is seeing opportunity hiding in a community struggling with survival. There's just something about Youngstown that stirs passion in me. I'm not gawking at ruin porn or glossing over everything that is wrong. I love Rust Belt cities. I love Rust Belt culture. I'm proud to be from the Rust Belt. That's what Rust Belt Chic now means to me. It's personal. It's who I am.

For Pittsburgh, I could sense the tide turning. I see the same transformation taking place in other Rust Belt cities. A pejorative, Rust Belt-ness is an asset. It's a starting point for moving forward, not a finish line or a civic booster campaign. Rust Belt Chic is in the same vein as rasquache:

Rasquache sensibility that has become an important component of Chicana and Chicano art. The word, rasquache can be used in several senses. Its most common use is negative and relates to an attitude that is lower class, impoverished, slapdash and shallow. For this reason Tomás Ybarra Frausto who has written the cogent essay "Rasquachismo: A Chicano Sensibility" begins by stating, "One is never rasquache, it is always someone else, someone of a lower status, who is judged to be outside the demarcators of approved taste and decorum (in Richard Griswold del Castillo and others, Chicano Art: Resistance and Affirmation, 1965-1985. Los Angeles: Wight Gallery, UCLA, 1991, p. 155)

However, as the case of several other terms and concepts (most notably the term and concept Chicano itself, which traditionally had a negative sense), the Chicano movement has turned the traditional notion of rasquache on its head. This important Chicano cultural sensibility has been particularly used to address, by means of a stance of resistance that is humorous and ironic rather than confrontational or hard-edged, the harrassments of external authorities such as the police, the immigration service, government officials, social services bureaucrats, and others. Chicano art that is rasquache usually expresses an underdog, have-not sensibility that is also resourceful and adaptable and makes use of simple materials including found ones, such as Luján's cardboard, glue, and loose sand.

Rust Belt Chic turns the traditional notion of Rust Belt on its head. The Rust Belt is lower class, impoverished, slapdash, and shallow. At least, that's how it looks from the coast, in New York City. Rust Belt Chic as a place to be is a form of resistance. It's also a hot new trend and a threat to those neighborhoods that make my heart beat faster. From San Antonio:

“I see a lot of progressiveness happening lightning quick now. When I came from Los Angeles as a visitor in 1992, I saw all these magic spaces you could rent for 300 or 400 a month. But I would laugh because there was little or nothing going on. I could get together some event with a friend or two and everybody thought it was so cool and innovative – I was just copping what I had seen in LA.

San Antonio has gotten a lot more popular with Austin and California types discovering what a jewel this town is. Eclectic little restaurants and coffee places and shops growing up along Broadway and throughout Southtown. We’re being seen by a lot more cutting edge people by being open to contemporary signage and logos and creative design. With that, unfortunately, comes more expensive retail spaces and taxes are going up.

There is a charm and real-ness to San Antonio I hope we don’t lose in the process. San Antonio is a non-materialistic town; people aren’t looking at your shoes or what kind of car you drive. When I leave San Antonio, it’s that real-ness that brings me back, every time. I left LA, and I left Austin because I got so tired of the trendy-ness. We’re growing fast, we’re drawing an eclectic market that will support artists. However, there will be a compromise. I don’t want to see it get too uptight.”

–Robert Tatum

Pittsburgh is Rust Belt Chic Paris. San Antonio is Rasquache Paris. When Richey Piiparinen and I were in San Antonio to do fieldwork, we were both struck by the Rust Belt Chic qualities of the city. At the time, we weren't familiar with rasquache. We are now. I see a lot of similarities between Pittsburgh and San Antonio, particularly the way both places are under-appreciated. They enjoy a cult following. Hopefully, neither one will become the next Austin or Portland.

Rasquache is further along, much further, than Rust Belt Chic. In fact, Rust Belt Chic is rasquache:

This called to mind a passage I’d read in Have You Seen Marie? It’s an unusual book for a writer whose work has been at turns bawdy, avant-garde, and politically trenchant. Entirely autobiographical, Marie is a short, illustrated story with a childlike tone about Cisneros searching the streets of King William for a friend’s lost cat while mourning the loss of her mother, who died in 2010. I read Cisneros the passage I’d thought of: “ ‘King William has the off-beat beauty of a rasquache, and this is what’s uniquely gorgeous about San Antonio as a whole.’ ”

She smiled. “Rasquache is when you make or repair things with whatever you have at hand. You don’t go to Home Depot. If you have a hole in your roof, you put a hubcap on there. Or you fix your fence with some rope. That’s rasquache. And then there’s ‘high rasquache,’ which is a term the art critic Tomás Ybarra-Frausto coined. He lives here. Danny Lozano knew high rasquache. He’d serve you Church’s fried chicken on beautiful porcelain and use Lalique crystal for flowers he’d cut from an empty lot.”

“And that was one of the qualities that drew you to King William?”

“Not just King William but San Antonio. A kind of elegance of found things. San Antonio has that soul. It’s not, ‘We gotta copy what we saw in New York.’ No! It’s going to come out of our own idea of what we think is beautiful.” She stared at me as if to make sure I understood. “But that’s also what’s getting lost. People feel like the city’s got to look like someplace else. Our mayor needs a stylist. He thinks he has to dress like a Republican. Pues, he’s Chicano! He’s got this gorgeous indigenous look, and he would look so cool if Agosto Cuellar, one of our local designers, dressed him, or someone like Franco, or Danny, or John Phillip Santos—he dresses totally San Antonio cool. He should do a style column for Texas Monthly.”

I allowed that Santos, who is a regular contributor to this magazine, does have singular style (the last time I saw him, in December, he was wearing a horsehair charro tie and ringneck python boots) but joked that there might be a preponderance of leather pants in his fashion advice. Cisneros waved the joke aside.

“Our problem is that we can’t recognize or celebrate what we have. We have this inferiority complex in Texas that we have to look elsewhere. Well, who knows more about inferiority than Chicanos? We grew up being ashamed because the history that is taught to us makes us ashamed. The whole colonial experience surrounding the Alamo is meant to make you feel ashamed.”

In writer Sandra Cisneros, I sense a kindred spirit. As a Rust Belt native, Erie no less, I felt ashamed. I come from failure. I have no culture worth celebrating. Anywhere else must be better. That's why we leave. Brain drain.

I, too, was drawn to King William while in San Antonio. It is New Orleans (creole) and Pittsburgh (parochial). It's like nothing I've experienced before. I get that boom town vibe of a place that is cool before anyone knows it is cool:

Russell has seen what’s coming before. “When the buzz starts – when San Antonio embraces the brain gain, goes in the right direction on the talent economy and hipsters start to get wise to the neighborhood assets that are here – once the hipsters get wind of it – you’ll have to beat them away with a stick,” he said.

I think that's the concern of Robert Tatum. About a year ago, such a notion was unfathomable to Cleveland. What will the compromise with gentrification look like in Ohio City? Will somebody utter the words, "He dresses totally Cleveland cool"?

Danny Lozano knew high rasquache. He’d serve you Church’s fried chicken on beautiful porcelain and use Lalique crystal for flowers he’d cut from an empty lot.

Rust Belt Chic is served.

Jim Russell is a talent geographer with particular interest in the Rust Belt. Read his blog at Burgh Diaspora, where this piece originally appeared.

Will Obama Play his Aces?

Joel Kotkin — Mon, 01 Apr 2013 01:38:25 -0400

With the stock market hitting new highs, and unemployment easing, albeit slightly, President Obama can now seize his moment. After spending four years blaming George W. Bush for his lousy hand, the president now sits at the table with three strong aces among his cards.

The key question is: Will he play them?

One reason he might not is that most of his good hand stems primarily not from his stewardship but America's economic and demographic kismet. In fact, this resurgence is primarily not taking the "green," urban and high-tech form, as preferred by most coastal Democrats, but stems largely from the productive forces being unleashed in the nation's largely red heartland.

But Barack Obama is president, and if the country resurges on his watch, he will get much of the credit. This country, for all its problems, is naturally blessed, with both human and physical resources. It is beginning to both pull away from laggard Europe and Japan and seems far more well-positioned to compete with China than most observers believe. The choice for the president is whether to ride this resurgence, or throw it away as incompatible with his political agenda.

This dichotomy starts with energy, the thing most propelling the real, as opposed to the paper, economy. The current energy boom is taking place in a manner precisely what Obama and, certainly, many of his strongest backers, least likely would have preferred. In his first term, Obama charted a path on energy typical of the university faculty lounge. His departing energy secretary, Steven Chu, embraced the idea that Americans used fossil fuels irresponsibly, comparing them to teenagers. He liked forcing higher costs for energy while using our tax dollars to subsidize often-dodgy renewable schemes.

Yet, history, as is often the case, played out quite differently than the expected script. Rather than being required to accept enforced scarcity, Americans, largely due to new drilling techniques and advanced technology for identifying previously undiscovered fields, now are on the cusp of a massive energy boom. This has changed the country's trade and economic prospects immeasurably. Since 2009, the industry, according to the consultancy EMSI, has added some 430,000 jobs, in contrast to the much subsidized "green" energy industry, which has suffered a spate of embarrassing failures.

Energy employment

One problem for the president: The big winners to date have come from outside the coastal strips whose residents constitute his base. Over the past decade, Texas alone has added 180,000 mostly highly paid energy-related jobs. Oklahoma added 40,000, and the Intermountain West well over 30,000. In what could be a persuasive case, Pennsylvania, a blue state with a hunger for jobs, has joined the party; the original center of the U.S. energy industry is now enjoying a resurgence.

In contrast, energy-rich California, despite the nation's third-highest unemployment rate, has chosen to stand largely on the sidelines, creating a mere 20,000 such energy-related jobs. The same can be said about New York, which so far has chosen to follow the lead of celebrity "fracktivists" and is refusing to exploit its rich natural gas resources. Yet even in California, some normally progressive voices, such as former longtime Los Angeles Times columnist Tim Rutten, suggest that, in order "to jump-start" its economy, the state ought to climb on the energy bandwagon.

To be a successful president, Obama can embrace this growth while maintaining his green bona fides. As the environmentalists at the Breakthrough Institute have noted, America's recent remarkable progress in reducing greenhouse gases primarily is not the result of the sort of green technologies financed by the president's venture-capitalist friends and embraced by his media allies. Instead, it has been overwhelmingly the result of the gradual replacement of coal usage with natural gas.

Embracing gas – not only to generate electricity but also for transportation – serves both Obama's interest and the country's long-term interest. But his task is made more perilous by his efforts to appease his urban, green constituency, once strongly supportive of natural gas, but now decisively against it. Two contrarian environmentalists, an increasingly endangered species, have labeled the celebrity-driven protesters of hydraulic fracturing drilling techniques as "fracktivists for global warming."

Some observers, such as former Al Gore aide Morley Winograd, suggest that Obama's appointment of Ernie Moniz as energy secretary will bolster the notion that the president has shifted towards "pragmatic idealism" on energy. Obama may still be reluctant to allow much drilling in publicly held land but he could countenance a negotiated reasonable solution to the contentious issue of fracking.

High-flying farming

Energy is only one, albeit the most dramatically apparent, ace in the presidential hand. Another is agriculture, which is on a historic tear. This has been led, particularly in the Great Plains and the Midwest, by a boom in agriculture exports: The U.S. exported a record $135 billion in 2011, with a net favorable trade balance of $47 billion, the highest in nominal dollars since the 1980s.

What accounts for this boom? One driver is growing markets in the developing world – notably, China, which consumes almost 60 percent of the world's soybean exports and 40 percent of its cotton. The Great Plains Corridor, in particular, produces both these crops in abundance, which is one reason for its increased share of U.S. exports.

Most farmers and farm communities – outside of some who might ship to lovocore (eat local) restaurants – tilt conservative, but the exports of this sector drive growth in services and even technology. Farming today is increasingly tied to science, and that includes efforts to reduce the use of fertilizers and water. Cities from Omaha, Neb., to Kansas City to New Orleans all benefit from agricultural trade.

Cars come back

The last of Obama's aces comes from manufacturing, whose resurgence has been among the most surprising developments of the past five years. Some of this is tied to the energy boom, which is boosting industry along the Gulf Coast, with its burgeoning petrochemical complex. By itself, the expansion of energy – particularly cheap and plentiful natural gas – will create, according to a recent PricewaterhouseCoopers study, more than 1 million industrial jobs nationwide.

But more politically important for the president is the resurgence of the U.S. auto industry. Whatever one thinks of how the GM and Chrysler bailouts were conducted, the return to profitability in Detroit represents a big win for Obama and may be one of the reasons for his surprisingly strong electoral showing in the industrial Great Lakes. In comparison with Europe and, increasingly, even China, American manufacturers are showing great resiliency and growing competitive strength.

Yet, even here Obama needs to be careful. What a recent Boston Consulting Group report described as the incipient "reallocation of global manufacturing" will primarily benefit lower-cost, nonunion red states such as South Carolina, Alabama and Tennessee. This is where most new investment from German, Japanese and Korean firms is going. Yet, if this growth continues, Obama is helping his core constituencies, notably African-Americans, who now can see the prospect of higher-wage employment with benefits.

Ultimately, as the former Gore aide Winograd suggests, how Obama plays these cards may well determine the success of his tenure.

He could choose to throw out his trump cards in a gesture to placate his gentry funding base, urban progressives and his most devoted media claque. Or he could, like most great politicians, choose, instead, to play the great hand providence has provided him, irrespective of his core supporters, thereby all but assuring his stature as one of the more successful presidents in recent history.

This piece originally appeared in the Orange County Register.

Barack Obama photo by Bigstock.

The Psychology of the Creative Class: Not as Creative as You Think

Richey Piiparinen — Tue, 12 Mar 2013 09:47:36 -0400

"Innovation distinguishes between a leader and a follower"
–Steve Jobs

Behind every sociological movement is a psychology. The ever-growing creative classification of America is no different. The following teases the psychology of the movement apart.

Why do this?

Because it is needed. The costs of blindly acquiescing to copycat community building are too great. These costs are not simply aesthetic, even economic, but are costs in the ability to distinguish creativity from repetition, and ultimately: truth from fiction.

Be Creative or Die

"Anxiety is the dizziness of freedom"
–Kierkegaard

You may think creative classification—or the commoditization of cities as products to be consumed by creative people with means in the name of economic growth—begins with happiness. It doesn’t. It begins with anxiety. Writes Richard Florida on page 12 in The Rise of the Creative Class:

[T]he September 11, 2001, tragedy and subsequent terrorist threats have caused Americans, particularly those in the Creative Class, to ask sobering questions about what really matters in our lives. What we are witnessing in America and across the world extends far beyond high-tech industry or any so-called New Economy: It is the emergence of a new society and a new culture — indeed a whole new way of life. It is these shifts that will prove to be the most enduring developments of our time. And they thrust hard questions upon us. For now that forces have been unleashed that allow us to pursue our desires, the question for each of us becomes: What do we really want?

By tapping the defining moment of a generation of young people—a moment, mind you, defined by terror, insecurity, and “what if”— Florida begins his path to individual and societal progress from a point common to thinkers since the beginning of time, i.e., what does it all mean?

In fact, if I was going to start a galvanizing societal theory, I’d begin there too, as uncertainty, if not fear, is a great motivator and catalyzer. Fearing failure, loneliness, meaninglessness, regret—it’s all fuel in the search for meaning, for life. And while this intrapersonal battle is stoked inside the individual, it becomes actualized in the world around us, not least in that relationship between a person and a place.

Hence, the creative class credo: if you want to “live” you need to go to where the “action” is, else succumb to missing out. Such existentially-fueled place-pedestaling is perhaps the driving tenant of creative class urbanism. Writes Frank Bures:

I know now that this was Florida’s true genius: He took our anxiety about place and turned it into a product. He found a way to capitalize on our nagging sense that there is always somewhere out there more creative, more fun, more diverse, more gay, and just plain better than the one where we happen to be.

Courtesy of kenfager.com

Of course many of us in “flyover country” can identify with this: our cities “suck”, and the lights of aspiration shine brighter elsewhere, particularly on the coast. And it’s a kind of self-loathing grown particularly virulent in the Rust Belt—that bastion of decay and anti-vibrancy. Regardless of the validity, the mesofact is out there: the Rust Belt is dead, go away to really live. Take this 2002 article entitled (aptly) “Be creative—or die”. Here, Florida, in a interview, states:

They [cool cities] created a lifestyle mentality, where Pittsburgh and Detroit were still trapped in that Protestant-ethic/bohemian-ethic split, where people were saying, “You can’t have fun!” or “What do you mean play in a rock band? Cut your hair and go to work, son. That’s what’s important.” Well, Austin was saying, “No, no, no, you’re a creative. You want to play in a rock band at night and do semiconductor work in the day? C’mon! And if you want to come in at 10 the next morning and you’re a little hung over or you’re smoking dope, that’s cool.” I went to the Continental Club — I was invited by Austin’s leading political officials — and we went to see Toni Price the singer-songwriter, and there were hippies smoking dope right there on the back porch.

Florida’s advice to city leaders? If you are uncool be cool, because cool nurtures a vibrant city, and a vibrant city attracts the crème de la crème who are different, unique, and anxious to suck the marrow out of life—and they will eventually spit it out into insights and innovation.

Freedom Can Be Frightening

One does not become fully human painlessy–Rollo May, existential psychologist.

Recently on Twitter, Florida brought out the virtual creative class conch to alert to his followers that Yahoo was yanking its work-at-home privileges due to concerns over worker productivity. In a series of Tweets that lasted most of two days, Florida lambasted the decision, in effect showing how the 10 am start time has been liberalized over the years to not having to come into the office at all:

1. Working from home = focus. 2. Office =distraction. 3. Innovation more a product of “urban” interaction than in-office interaction.

— Richard Florida (@Richard_Florida) February 25, 2013

Yahoo end game … Stars leave. Slackers go to office where they distract others. Result: Reduced overall productivity.

— Richard Florida (@Richard_Florida) February 26, 2013

Yahoo’s decision goes against, according to writer Charles Shaw: “‘the élan vital of the Creative Class [which] is “take me as I am and facilitate the use of my unique skills, but don’t expect me to buy into some corporate culture that requires me to change who I am’”.

Explicit in such discourse is the unusual levels of individuality that’s supposedly threaded in the DNA of the creative class. No doubt, the concept of “individuality” in creative class theory is important, as unique, free-thinking creative-types are said to be the engine of the innovation economy, with the thinking that such individuals aren’t saddle-bagged with conformity and convention in their pursuit for fresh ideas.

But is this true? Is the creative class really beyond the bounds of social conformity?

To examine this, we return to the building blocks of creative class theory; namely, fear and anxiety.

In Erich Fromm’s 1942 classic Escape from Freedom, the author takes pains to emphasize that freeing oneself from societal conventions is not a fun process, as “freedom can be frightening”. While his delineation of the lineage of modern man’s loneliness is spelled out extensively in the book, it is enough here to say that while market capitalism enabled a freedom in the pursuit of happiness through technological and democratic innovations, it also chained us because “the self” had become a commodity. Writes Fromm:

“Man does not only sell commodities, he sells himself and feels himself to be a commodity…If there is no use for the qualities a person offers, he has none…Thus, the self-confidence, the “feeling of self”, is merely an indication of what others think of the person…If he is sought after, he is somebody; if he is not popular, he is simply nobody. The dependence of self-esteem on the success of the “personality” is the reason why for modern man popularity has this tremendous importance.”

Fromm was damn prescient, as today more than ever there’s a tremendous amount of pressure to create a “false self” if you are interested in successfully navigating established social structures. This false self accepts not what it wants, but what it is supposed to want. To buck the system—that is, to emphasize the components of the “true self” that often have little value in a hyper-competitive society in which avatars compete in a virtual 24/7 spit-off so as to game a personal brand—we must, according to Fromm, realize that to know what one wants is not easy “butone of the most difficult problems any human being has to solve”.

Courtesy of Jeff Bullas

Of course many don’t solve this. We know this. We live it. Struggle with it, including this author. Instead, individuality is commonly sacrificed for the comfort in conformity. Writes Fromm:

“[We] become a part of a powerful whole outside of oneself, to submerge and participate in it…By becoming part of a power which is felt as unshakably strong, eternal, and glamorous, one participates in its strength and glory.”

It says here that one of these “powerful wholes” is to be able to self-identify with membership in the creative class. This is not a leap. Instead, the evidence of creative class conformity is increasingly clear in cities where creative class enclaves are thickest.

Uniquely Conforming and Creatively Monotononizing

In a time of deceit telling the truth is a revolutionary act–George Orwell

One of Florida’s greatest accomplishments was to imbue a sense of distinctiveness in the millions upon millions of individuals that make up the creative class. This in itself is a feat, as it involves convincing persons that it is their own uniqueness that makes them a special, if massive, group. Writes Florida (The Rise of the Creative Class, 2002, 315, 326) via Jamie Peck:

[The creative class] needs to see that their economic function makes them the natural — indeed the only possible — leaders of twenty-ﬁrst century society . . .

…[W]e must harness all of our intelligence, our energy and most important our awareness. The task of building a truly creative society is not a game of solitaire. This game, we play as a team’.

Yet while preaching uniqueness to the self-believers as a galvanizing gimmick is clever, the problem for Florida is that those actually greasing the rails of creative classification on the ground are developers (Forest City’s Albert Ratner called Florida’s book the “playbook” for developers), and the only individuality they care about is the marketing kind, or the “you-are-so-special-you-deserve-this-condo” kind. Here, “individuality” and “diversity” aren’t meant to be taken literally, but as words to coax want so as to placate the shitty feeling of being a conformer, with of course conforming only placating the shitty feeling of loneliness.

From an article “How to Brand Your City”, which covered Forest City’s Alexa Arena’s recent presentation about her San Francisco development project called “5M”:

She said cultural diversity is a key ingredient in shaping a hub for innovation. Some of the best ways to promote diversity are restaurants, trendy corner shops and community events — all staples of 5M’s plan.

Courtesy of Bold Italic

Of course uttering such nonsense is beyond laughable–somewhat terrifying even–and if Arena and her ilk really believe such then they got their vested heads in the sand, fantasizing about diversity while monotone forms around them.

Regardless, for others watching reality as it really happens they see creative class gentrification for what it is: a process of homogenization. In fact the sheer number of creative class = vanilla articles popping up everywhere of late may indicate that the jig is up (see here, here, here, and here), and those who actually moved to Big City for “the real”, or who grew up in Big City when it was in fact diverse before planned diversification, well, they are getting snarly. Writes Charles Hurbert in the “Homogenization of San Francisco”:

Take a walk down Valencia Street today and you’ll find yourself waiting in line at a Disneyland of pop-culture opulence. Oblivious of the stark irony, graphic designers and marketing managers frequent $50/seat old-time barbershops and shop at retail boutiques obsessed with the rugged appeal of working-class fashion. Simultaneously, the actual businesses and experiences the proprietors are emulating are unable to compete in the increased rental market. What we’re left with are stage props and costumes in an increasingly detached culture of disingenuous, blue-collar nostalgia.

This is not to say that the creative class movement will go down without a fight. Part of the fight is to acknowledge creative classification’s faults, with Florida himself–the “Urban Prophet” as he was recently donned in Property Week–out front and center owning the solutions to the consequences of his own policy. For instance, there is the Atlantic Cities “Class-Divided Series” which vividly demonstrates the extent the creative class forms enclaves in Global City space, thus exacerbating disparity. And there is a recent NPR Morning Edition interview that states “Urban scholar Richard Florida has found a problem with the way our cities are evolving”, ignoring of course the work of scholars like Jamie Peck who have been “finding” problems for the past decade.

And then there is the other part of the fight which simply means believing it doesn’t exist. Here, economic development types carry the pail largely through good, old-fashioned “nothing to see here” pieces that serve to obfuscate the truth. Like this one in the San Francisco Chronicle entitled “Gentrification is no longer a dirty word” that I just picked up from Florida’s Twitter feed, which basically smashes a happy face over the pain creative classification can make:

“Young people with talent are the new movers and shakers in the city,” says [30-year real estate veteran] Thompson, who says the city sells itself. “Last weekend I had some clients who were looking in the Mission. We drove by Dolores Park, and it was packed. They said, ‘Is there a street fair?’ “

Nope, just another afternoon in trendy town.

Again, the creative class movement will not walk gently into the art-festival-lit night. There is too much at stake. Too much money, and too much psycho-sociological comfort in being able to believe your part of a privileged group that has both force and uniqueness: a kind of snowstorm in which no two creative class snowflakes are alike.

Largely, this fight will be played out in a clash of ideas in which reality versus relativism takes center stage in a battle for meaning versus no meaning: an Orwellian sociological/psychological shit show to determine whether or not 2 plus 2 = 5, diversity = homogeneity, individuality = conformity, authenticity = fake, and a life of meaning = the deep existential loneliness occurring when the false self aches.

Nothing less than the integrity of creativity is at stake.

Richey Piiparinen is a writer and policy researcher based in Cleveland. He is co-editor of Rust Belt Chic: The Cleveland Anthology. Read more from him at his blog and at Rust Belt Chic.

Lead photo: The vibe in Cleveland. Courtesy of David Jurca

The Real Winners Of The Global Economy: The Material Boys

Joel Kotkin — Wed, 06 Mar 2013 11:10:23 -0500

Something strange happened on the road to our much-celebrated post-industrial utopia. The real winners of the global economy have turned out to be not the creative types or the data junkies, but the material boys: countries, states and companies that have perfected the art of physical production in agriculture, energy and, remarkably, manufacturing.

The strongest economies of the high-income world (Norway, Canada, Australia, some Persian Gulf countries) produce oil and gas, coal, industrial minerals or food for the expanding global marketplace. The greatest success story, China, has based its rise largely on manufacturing. Brazil has been powered by a trifecta of higher energy production, a strong industrial sector and the highest volume of agricultural exports after the United States.

Things are really looking up for the material boys here in North America. Over the past decade, the strongest regional economies (as measured by GDP, job and wage growth) have overwhelmingly been those that produces material goods. This includes large swaths of the Great Plains, the Gulf Coast and the Intermountain West, three regions that, as I point out in a recent Manhattan Institute study, have withstood the great recession far better than the rest of the country.

Today virtually all the “material boy” states now boast unemployment well below the national average; the lowest are the Dakotas, Wyoming and Nebraska. Texas, the biggest of the U.S. material boys, boasts an unemployment rate around 6%, well below California (nearly 10%) and New York (8%). One key reason: While Texas has created over 180,000 generally well-paid energy jobs over the past decade, California, with abundant energy reserves, has generated barely one-tenth as many. New York, despite ample potential in impoverished upstate areas, largely has disdained developing its energy sector.

These realities contrast greatly with the conventional wisdom that with the rise of the information age, the application of “brains” to abstract concepts, images and media would come to trump the “brawn” of producers, a thesis advanced influentially in 1973 by Daniel Bell in The Coming of Post Industrial Society. More recently Thomas Friedman has cited the East Asian countries such as Taiwan and Japan as suggesting that a lack of natural resources actually sparks innovation and economic health, while too great a concentration generally hinders progress.

So how is it that the rubes, with their grease-stained hands, reeking of the smell of manure or chemical fertilizers, have outperformed the darlings of the information age? The answer lies largely in the forces that are reshaping the world. This includes, most portentously, rising demand for fuel, food and fiber in developing countries, notably in East Asia and Latin America.

In the past commodity-based economies suffered frequent cyclical recessions whenever a handful of wealthy consuming countries — the EU, Japan and North America — experienced a recession or slow growth. Now a set of new consumers are fuelling strong demand even when high-income countries tank; this is keeping prices up far more reliably than in the past. Of course, a major global economic catastrophe, or some new breakthrough in energy or agricultural technology, could bring prices down precipitously, but for the most part demographic trends seem likely to favor commodity producers over the coming decade or two.

Arguably the biggest surprise has been the United States’ strong advantages in the resource race. America has a far richer endowment of raw materials than its primary competitors, including the European Union, India, China and Japan. Only the Russian Federation is equally well-endowed: The Siberian periphery that was first conquered in the great period of Russian expansion between the 16th and mid-19th centuries remains one of the greatest resource regions on the planet and the base of that country’s economy.

Agriculture is perhaps the least appreciated of the new drivers of the U.S. economy. Farm exports have been surging; in 2011 the U.S. exported a record $135 billion worth of agricultural goods, with a net favorable balance of $47 billion, the highest in nominal dollars since the 1980s.What accounts for this boom? One key driver is China, which consumes almost 60% of the world’s soybean exports and 40% of its cotton.

Perhaps even more transformative has been the energy boom, largely sparked by new technologies such as fracking and deepwater drilling. This has transformed the Great Plains alone into the world’s 14th largest oil producer, roughly on a par with Nigeria and Norway. Unless stopped by regulatory constraints, this expansion may only be in its infancy. We can expect large increases in production not only in North Dakota; Texas’ Eagle Ford shale oil is expected to quintuple its daily production by 2014 . New finds in the Wattenberg Field north of Denver alone could contain more than a billion barrels of recoverable oil and natural gas, essentially matching the huge Eagle Ford or the Bakken Field in western North Dakota. Another find, the Green River formation in Wyoming, could contain an astounding 1.4 trillion barrels of oil shale.

The energy revolution already has been transformative in the material states. Between 2010 and 2011, according to an analysis by EMSI, all six of the fastest-growing job classifications were related to energy development. Since 2009 the industry, according to EMSI, has added some 430,000 jobs, with the largest share going to Texas, Oklahoma, and Pennsylvania.

Perhaps even more important, the expansion of the energy sector is galvanizing manufacturing, hitherto the weakest link in the material boy economy. The energy boom could create more than a million industrial jobs nationwide over the decade both to supply the industry and as a result of lower energy costs, according to a recent PricewaterhouseCoopers study.This new industrial economy is already evident in those parts of the country embracing the energy revolution, notably Texas, Oklahoma, Louisiana, Pennsylvania, and Ohio.

Some see the rise of the material boys as just another “bubble” soon to collapse. Derek Thompson at the Atlantic suggests that the North Dakota boom may have already crested. And to be sure, labor and infrastructure limits may slow the rate of growth compared to past years, but projections by JPMorgan Chase suggest that North Dakota will continue to enjoy GDP growth two to three times the national average for the next few years. And as for the labor shortages, help is also on the way; North Dakota now boasts the highest rate of domestic in-migration in the country.

To be sure, the material boys will face real challenges in the years ahead. The need to train skilled blue-collar workers — something the country has neglected for generations — presents a major challenge in places like Louisiana and Texas, where education levels remain below the national average, as well as the more literate but less populous Dakotas. Infrastructure needs like pipelines and electrical transmission lines will become more evident as production increases.

But even the most effete coastal denizens should appreciate what the rise of the “material boys” means for America’s future. The growth of basic industries also creates demand for high-end business services — everything from architects and investment bankers to data-miners, advertising, and public relations firms — concentrated in such places as San Francisco, Seattle, New York, and Boston.

But clearly the biggest beneficiaries will be the cities of the commodity belt, starting with Houston, the epicenter of the energy industry, as well as Oklahoma City, Dallas-Ft. Worth, Omaha, Salt Lake City and Denver. Rapid growth is even evident in smaller places in the Dakotas such as Sioux Falls, Bismarck, and Fargo.

Most importantly, the rise of the material boys expands the nation’s geography of opportunity in ways rarely imagined just a decade ago. It is a process that all Americans should appreciate and encourage.

This piece originally appeared in Forbes.

Welder photo by Bigstock.

America's Growth Corridors: The Key to a National Revival - A New Report

Joel Kotkin — Tue, 26 Feb 2013 09:48:02 -0500

In the wake of the 2012 presidential election, some political commentators have written political obituaries of the "red" or conservative-leaning states, envisioning a brave new world dominated by fashionably blue bastions in the Northeast or California. But political fortunes are notoriously fickle, while economic trends tend to be more enduring.

These trends point to a U.S. economic future dominated by four growth corridors that are generally less dense, more affordable, and markedly more conservative and pro-business: the Great Plains, the Intermountain West, the Third Coast (spanning the Gulf states from Texas to Florida), and the Southeastern industrial belt.

Read or download the full report from the Manhattan Institute.

Overall, these corridors account for 45% of the nation's land mass and 30% of its population. Between 2001 and 2011, job growth in the Great Plains, the Intermountain West and the Third Coast was between 7% and 8%—nearly 10 times the job growth rate for the rest of the country. Only the Southeastern industrial belt tracked close to the national average.

Historically, these regions were little more than resource colonies or low-wage labor sites for richer, more technically advanced areas. By promoting policies that encourage enterprise and spark economic growth, they're catching up.

Such policies have been pursued not only by Republicans but also by Democrats who don't share their national party's notion that business should serve as a cash cow to fund ever more expensive social-welfare, cultural or environmental programs. While California, Illinois, New York, Massachusetts and Minnesota have either enacted or pursued higher income taxes, many corridor states have no income taxes or are planning, like Kansas and Louisiana, to lower or even eliminate them.

The result is that corridor states took 11 of the top 15 spots in Chief Executive magazine's 2012 review of best state business climates. California, New York, Illinois and Massachusetts were at the bottom. The states of the old Confederacy boast 10 of the top 12 places for locating new plants, according to a recent 2012 study by Site Selection magazine.

Energy, manufacturing and agriculture are playing a major role in the corridor states' revival. The resurgence of fossil fuel–based energy, notably shale oil and natural gas, is especially important. Over the past decade, Texas alone has added 180,000 mostly high-paying energy-related jobs, Oklahoma another 40,000, and the Intermountain West well over 30,000. Energy-rich California, despite the nation's third-highest unemployment rate, has created a mere 20,000 such jobs. In New York, meanwhile, Gov. Andrew Cuomo is still delaying a decision on hydraulic fracturing.

Cheap U.S. natural gas has some envisioning the Mississippi River between New Orleans and Baton Rouge as an "American Ruhr." Much of this growth, notes Eric Smith, associate director of the Tulane Energy Institute, will be financed by German and other European firms that are reeling from electricity costs now three times higher than in places like Louisiana.

Korean and Japanese firms are already swarming into South Carolina, Alabama and Tennessee. What the Boston Consulting Group calls a "reallocation of global manufacturing" is shifting production away from expensive East Asia and Europe and toward these lower-cost locales. The arrival of auto, steel and petrochemical plants—and, increasingly, the aerospace industry—reflects a critical shift for the Southeast, which historically depended on lower-wage industries such as textiles and furniture.

Since 2000, the Intermountain West's population has grown by 20%, the Third Coast's by 14%, the long-depopulating Great Plains by over 14%, and the Southeast by 13%. Population in the rest of the U.S. has grown barely 7%. Last year, the largest net recipients of domestic migrants were Texas and Florida, which between them gained 150,000. The biggest losers? New York, New Jersey, Illinois and California.

As a result, the corridors are home to most of America's fastest-growing big cities, including Charlotte, Raleigh, Atlanta, Houston, Dallas, Salt Lake City, Oklahoma City and Denver. Critically for the economic and political future, the growth corridor seems particularly appealing to young families with children.

Cities such as Raleigh, Charlotte, Austin, Dallas and Houston enjoy among the country's fastest growth rates in the under-15 population. That demographic is on the wane in New York, Los Angeles, Chicago and San Francisco. Immigrants, too, flock to once-unfamiliar places like Nashville, Charlotte and Oklahoma City. Houston and Dallas already have more new immigrants per capita than Boston, Philadelphia, Seattle and Chicago.

Coastal-city boosters suggest that what they lose in numbers they make up for in "quality" migration. "The Feet are moving south and west while the Brains are moving toward coastal cities," Derek Thompson wrote a few years ago in The Atlantic. Yet over the past decade, the number of people with bachelor's degrees grew by a remarkable 50% in Austin and Charlotte and by over 30% in Tampa, Houston, Dallas and Atlanta—a far greater percentage growth rate than in San Francisco, Los Angeles, Chicago or New York.

Raleigh, Austin, Denver and Salt Lake City have all become high-tech hubs. Charlotte is now the country's second-largest financial center. Houston isn't only the world's energy capital but also boasts the world's largest medical center and, along with Dallas, has become a major corporate and global transportation hub.

The corridors' growing success is a testament to the resiliency and adaptability of the American economy. It also challenges the established coastal states and cities to reconsider their current high-tax, high-regulation climates if they would like to join the growth party.

Read or download the full report from the Manhattan Institute.

This piece first appeared in the Wall Street Journal.

State Components of Population Change: 2010-2012

Richard Morrill — Thu, 24 Jan 2013 00:38:20 -0500

What have the last two years of modest recovery meant to the growth and redistribution of population among the states? New data on the components of change for states are now available. In March county level data will permit a more detailed portrait.

For states I present four maps, overall population change, change from natural increase, immigration (net international migration) and internal migration between states.

Population Change

Not surprisingly, most of the states with larger absolute and percent gains continue trends from the last decade: the South Atlantic states from Florida to Delaware, in the South dominantly Texas (both amount and rate), along with Colorado and Washington State as centers of substantial Western growth. But North Dakota, due to rapid energy development, is the prime addition to the “winning” state for growth, with South Dakota following. The District of Columbia had the highest rate of growth,a beneficiary of expanding government growth, and perhaps more importantly, power.

Conversely, low rates of growth, even a loss for Rhode Island and possibly Michigan, characterize the northeast and the south central states.

Natural Increase

For most states, natural increase (the difference between births and deaths) is the largest component of growth. The rates and amounts are significant to overall growth across the west, California still leads in absolute growth, entirely due to natural increase. In contrast Utah and Idaho also stand out for high rates, in part from their Mormon population. Some slower growth northeastern states do have substantial natural increase, due to their size, including IL, MI, OH, and NY, while NC and SC and especially FL have lower rates of natural increase due to aging of their populations and migration of older people from the north.

Immigration

Total US population growth from 2010-2012 was 5.17 million, of which 3.32 million was from natural increase (8.9 million births and 5.6 million deaths), leaving a substantial part of growth from international migration of 1.85 million. Despite the flak about immigration, the pace has not slowed.

While immigration in the West (CA, WA, HI) of 277,000 remains significant, the dominant flow of immigrants went to the Atlantic seaboard states – how old-fashioned! – such as greater New York, Florida, and increasingly to GA and NC. New York gained 210,000 and Florida 212,000! Immigration was fairly modest to the interior of the country. This reflects largely the decreasing immigration from Mexico. Illinois (with a gain of 61,000 from immigration) and Texas are both are experiencing slowdowns. And note that AZ and NM immigration have become quite small.

The highest rate of immigration was to HI followed by NJ and FL.

Internal Migration

The volume of interstate migration was still lower than was typical in the 1960s through the 1990s, but still potent in explaining the growth differential among the states.

The pattern of absolute and relative gains and losses was essentially a continuation of trends over the last twenty years, with net in-migration to much, but not all of the South and to the West, except for California, which grows from natural increase and immigration but loses to the rest of the country.

Texas, with a net gain of 291,000, easily grew the most, followed by Florida (219,000), then North Carolina (72,000) and Colorado (62000). The highest rate was North Dakota, with net in-migration at 2.6% of the base population, followed by the District of Columbia (2.35%) and Colorado (1.24%). The North Dakota phenomenon is the most remarkable, since it marks an abrupt reversal from decades of loss, and of unknown duration. In the West, Colorado became the preferred destination, followed by Washington, with Arizona and Nevada less popular than a decade earlier. South Dakota also changed to a small gain due to its strong economy and low unemployment.

Out-migration characterized 28 states, encompassing the entire northeastern part of the country, from Minnesota to Maine, Kansas and Nebraska to Pennsylvania and New Jersey, and several states experienced high amounts and rates of loss, e.g. New York, -224,000; Illinois, -156,000; New Jersey, -103,000; and Michigan, -93,000; but the highest rates of loss were for Rhode Island, Illinois, New Jersey and New York. Outside the northeast, the biggest loss, as usual was for California: 104,000.

Differences in Components of Change From the 2000-2010 Decade
Population growth

Overall the rates of population growth, of natural increase, and of international immigration are remarkably unchanged. The perhaps surprising turnarounds towards much greater rates of growth occurred in DC, LA (recovery from Katrina), and the Dakotas. States whose growth slowed markedly were AZ, ID, NV, NM, and UT in the West (partly due to much lower migration from Mexico), and Georgia. Only RI shifted from growth to a loss.

AK, HI, LA and ND enjoyed increased immigration, while it fell for AZ, CO, NM and TX. Natural increase grew in ND and DC.

Internal migration

DC, LA and ND changed the most, changing from losses to gains, and CO and SD had increased rates. Twelve states had lower rates of in-migration: AL, AZ, AR, DE, GA, KY, NV, NC, OK, OR, SC, and even VA – presumably a recession effect. But it was worse for seven states which shifted from gains to losses: ID, ME, MO, NH, NM, PA and VT, and for 3 states with bigger losses: CT, IN and NJ. But then seven states reduced rates of loss: CA, HI, IA, MD, MA, NE, and NY. Obvious explanations for some of these changes do not spring quickly to mind.

What all this shows is that it is hard to make long term projections on the basis of seemingly robust trends over even fairly long periods. Preferences change, economic sectors rise and fall.

Political Implications

Analysis of the 2012 elections have shown that the Obama victory is a consequence of demographic change as the country shifts from a domination of white males to a rainbow coalition of yes, white liberals, mostly urban, but propelled largely by a strongly supportive minority population moving toward a majority. At first glance the maps seem to tell us that growing areas in the South and mountain states favor the Republicans while the declining Northeast was the stronghold of Democrats. Yet it is more complex, since states like Virginia, Florida, Colorado and even North Carolina – all with large and growing minority as well as white urban populations – vote increasingly Democratic.

Richard Morrill is Professor Emeritus of Geography and Environmental Studies, University of Washington. His research interests include: political geography (voting behavior, redistricting, local governance), population/demography/settlement/migration, urban geography and planning, urban transportation (i.e., old fashioned generalist).

New Geography's Most Popular Pieces of 2012

Mark Schill — Thu, 03 Jan 2013 00:24:08 -0500

Here’s a list of the most popular pieces from 2012 here at NewGeography, our fourth full calendar year. Thanks for reading and happy 2013.

10. The Cities Where a Paycheck Stretches the Furthest In this piece from July, Joel Kotkin looks at average pay in U.S. metropolitan areas adjusted for regional cost of living based on my analysis of data from EMSI and C2ER. Since it ran, the table at the end of the piece has been updated with 2012 data. This piece also ran in Forbes.

9. The Export Business of California (People and Jobs) Wendell Cox quantifies the outmigration from California and outlines a few reasons why residents might be leavings.

8. America’s Future is Taking Shape in the Suburbs The evidence suggests that it’s not time to write off the suburbs just yet, according to this July Joel Kotkin piece. This piece also appeared at Forbes.

7. The New Geography of Success in the U.S. and the Trap of the “New Normal” Joel Kotkin suggests that all of the public discussion about a “new normal” of U.S. mediocrity may not be the case due to a few of America’s inherent competitive advantages. “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.” This piece also appeared in Forbes.

6. Sex (or Not) and the Japanese Single Edward Morgan explores the issue of sex and fertility and how it may affect the future of Japan.

5. The Unseen Class War that Could Decide the Presidential Election In August Joel Kotkin pointed out that the issue of class is one of the most important facing American policymakers. He points out that the “clerisy” of both parties has ignored upward mobility and the needs of the “yeomanry.” This piece also appeared in Forbes.

4. After the November election, Joel Kotkin argued that the nation may be in for a future similar to the current state of California in the piece, “For a Preview of Obama’s America in 2016, Look at the Crack-up of California.” This piece also appeared in Forbes.

3. World Urban Areas Population and Density Wendell Cox’s summary of population data on the world’s urban areas has become a popular resource for readers looking for population data in search engines.

2. Is California the New Detroit? In August Robert Cristiano called out California political leaders about the state of the state: “The beaches are still beautiful. The mountains are still snow capped and the climate is still the envy of the world. Detroit never had that. But will California’s physical attributes be enough?”

1. Best Cities for Jobs 2012 Articles Our Best Cities Rankings measure short-, medium-, and long-term employment growth in the nation’s metropolitan areas and metropolitan divisions. We keep the measure simple on purpose: to offer an indicator of which regions are changing the fastest.

Mark Schill is a community strategist and analyst with Praxis Strategy Group and New Geography's Managing Editor.

America the Mostly Beautiful

Bill Steigerwald — Tue, 25 Dec 2012 12:38:39 -0500

In the fall of 2010, as part of a book project, ex-newspaperman Bill Steigerwald retraced the route John Steinbeck took in 1960 and turned into his classic “Travels With Charley.” Steigerwald drove 11,276 miles in 43 days from Long Island to the top of Maine to Seattle to San Francisco to New Orleans before heading back to his home in Pittsburgh. In “Dogging Steinbeck,” his new e-book about how he discovered “Charley” was not nonfiction but a highly fictionalized and dishonest account of Steinbeck’s real trip, Steigerwald describes the America he saw.

"Big."

"Empty."

"Rich."

"No change since 1960."

Long after the old farms and new forests of New England disappeared in my rearview mirror, I was still scrawling those words in the reporter’s notebook on my knee. Big, empty, rich and unchanged – that's a pretty boring scouting report for the America I “discovered” along the Steinbeck Highway. You can add a bunch of other boring but fitting words – “beautiful,” “safe,” “friendly,” “clean,” and “quiet.”

Like Steinbeck, I didn’t see the Real America or even a representative cross-section of America, neither of which exist anyway. Because I went almost exactly where Steinbeck went and stopped where he stopped, I saw a mostly White Anglo Saxon Protestant Republican America, not a “diverse and politically correct” Obama one. Mostly rural or open country, it included few impoverished or crime-tortured inner cities and no over-developed/underwater suburbs.

America the Beautiful was hurting in the fall of 2010, thanks to the bums and crooks in Washington and on Wall Street who co-produced the Great Recession. It still had the usual ills that make libertarians crazy and may never be cured: too many government wars overseas and at home, too many laws, politicians, cops, lawyers, do-gooders and preachers.

But America was not dead, dying or decaying. There were no signs of becoming a liberal or conservative dystopia. The U.S. of A., as always, was blessed with a diverse population of productive, affluent, generous, decent people and a continent of gorgeous natural resources.

Everyday of my trip I was surrounded by undeniable evidence of America’s underlying health and incredible prosperity. Everywhere I went people were living in good homes, driving new cars and monster pickup trucks and playing with powerboats, motorcycles and snowmobiles. Roads and bridges and parks and main streets were well maintained. Litter and trash were scarce. Specific towns and regions were hurting, and too many people were out of work, but it was still the same country I knew.

I didn’t seek out poverty or misery or pollution on my journey, and I encountered little of it. The destitute and jobless, not to mention the increasing millions on food stamps, on welfare or buried in debt, were especially hard to spot in a generous country where taking care of the less fortunate is a huge public-private industry – where even the poor have homes, cars, wide-screen TVs and smart phones.

I saw the familiar permanent American socioeconomic eyesores – homeless men sleeping on the sidewalks of downtown San Francisco at noon, the sun-bleached ruins of abandoned gas-stations on Route 66, ratty trailer homes parked in beautiful locations surrounded by decades of family junk. I saw Butte’s post-industrial carcass, New Orleans’ struggling Upper Ninth Ward and towns that could desperately use a Japanese car plant.

But the country as a whole was not crippled or even limping. In the fall of 2010, nine in 10 Americans who said they wanted jobs still had them. The one in 10 who were jobless had 99 weeks of extended unemployment benefits and more than 90 percent of homeowners were still making their mortgage payments.

Most of the states I shot through – including Maine, northern New Hampshire and Vermont, upstate New York, Wisconsin, Minnesota, North Dakota, Montana – had unemployment and foreclosure rates well below the national averages.

I didn't visit the abandoned neighborhoods of poor Detroit. I didn’t see battered Las Vegas, where 14.5 percent of the people were unemployed and one in nine houses – five times the national average – had received some kind of default notice in 2010. But I spent almost two weeks in the Great Train Wreck State of California, where jobless and foreclosure rates were higher than the national average and municipal bankruptcies loomed.

America had 140 million more people than it did in 1960, but from coast to coast it was noticeably quiet – as if half the population had disappeared. Despite perfect fall weather, public and private golf courses were deserted. Ball fields were vacant. Parks and highway rest stops and ocean beaches were barely populated. Except for metropolises like Manhattan and San Francisco and jumping college towns like Missoula and Northampton, people in throngs simply did not exist. I went through lots of 30-mph towns that looked like they’d been evacuated a year earlier.

As I drove what’s left of the Old Steinbeck Highway – U.S. routes 5, 2, 1, 11, 20, 12, 10, 101 and 66 – it was obvious many important changes had occurred along it since 1960. Industrial Age powerhouses like Rochester, Buffalo and Gary had seen their founding industries and the humans they employed swept away by the destructive winds of technology and global capitalism. Small towns like Calais in northeastern Maine had lost people and jobs, and vice versa.

New Orleans had shrunk by half, and not just because of Katrina. The metro areas of Seattle, San Francisco and Albuquerque had exploded and prospered in the digital age. The populations of the West Coast and the Sunbelt had expanded since 1960. The South had shed its shameful system of apartheid and its overt racism, as well as much of its deep-rooted poverty and ignorance. The Northeast had bled people, manufacturing industries and its once overweening role in determining the nation’s political and cultural life.

Change is inevitable, un-stoppable, pervasive. Nevertheless, it was clear that a great deal of what I saw out my car windows had hardly changed at all since Steinbeck and his French poodle Charley raced by.

He saw more farmland and fewer forests than I did, especially in the East. But in many places I passed through almost nothing was newly built. Many farms and crossroads and small towns and churches were frozen in the same place and time they were eons ago, particularly in the East and Midwest.

In Maine the busy fishing village of Stonington was as picturesque as the day Steinbeck left it. He’d recognize the tidy farms of the Corn Belt and the raw beauty of Redwood Country and the buildings if not the people of the Upper Ninth Ward. And at 70 mph whole states – North Dakota and Montana – would look the same to him except for the cell towers and Pilot signs staked out at the interstate exits.

Steinbeck didn’t like a lot of things about Eisenhower America – sprawl, pollution, the rings of junked cars and rubbish he saw around cities. And he lamented – not in “Charley” but in letters to pals like Adlai Stevenson – that he thought America was a rotting corpse and its people had become too soft and contented to keep their country great and strong.

But Steinbeck had America’s future wrong by 178 degrees. Fifty years later, despite being stuck in an economic ditch, the country was far wealthier, healthier, smarter and more globally powerful and influential than he could have imagined. Its air, water and landscapes were far less polluted. And, most important, despite the exponential growth of the federal government’s size and scope and its nanny reach, America in 2010 was also a much freer place for most of its 310 million citizens, especially for women, blacks, Latinos and gays.

You don’t have to be a libertarian to know America is not as free as it should be. But there’s no denying that today our society is freer and more open than ever to entrepreneurs, new forms of media, alternative lifestyles and ordinary people who want to school their own kids, medicate their own bodies or simply choose Fed Ex instead of the U.S. Post Office.

As for the stereotypical complaints about America being despoiled by overpopulation, overdevelopment and commercial homogenization, forget it. Anyone who drives 50 miles in any direction in an empty state like Maine or North Dakota – or even in north-central Ohio or Upstate New York – can see America’s problem is not overpopulation. More often it’s under-population. Cities like Butte and Buffalo and Gary have been virtually abandoned. Huge hunks of America on both sides of the Mississippi have never been settled.

From Calais, Me., to Pelahatchie, Miss., I passed down the main streets of comatose small towns whose mayors would have been thrilled to have to deal with the problems of population growth and sprawl. If anyone thinks rural Minnesota, northwestern Montana, the Oregon Coast, the Texas Panhandle or New Orleans’s Upper Ninth Ward have been homogenized, taken over by chains or destroyed by too much commercial development, it’s because they haven’t been there.

The America I traveled was unchained from sea to sea. I had no problem eating breakfast, sleeping or shopping for road snacks at mom & pop establishments in every state. The motels along the Oregon and Maine coasts are virtually all independents that have been there for decades. You can go the length of old Route 66 and never sleep or eat in a chain unless you choose to.

Steinbeck, like many others have since, lamented the loss of regional customs. (I don’t think he meant the local “customs” of the Jim Crow South or the marital mores of the Jerry Lee Lewis clan.) I didn’t go looking for Native Americans, Amish, Iraqis in Detroit, Peruvians in northern New Jersey or the French-Canadians who have colonized the top edge of Maine. But I had no trouble spotting local flavor in Wisconsin’s dairy lands, in fishing towns along Oregon’s coast, in the redwood-marijuana belt of Northern California, in San Francisco’s Chinatown or the cattle country of Texas.

Not to generalize, but the New York-Hollywood elites believe the average Flyover Person lives in a double-wide or a Plasticville suburb, eats only at McDonald’s, votes only Republican, shops only at Wal-Mart and the Dollar Store, hates anyone not whiter than they are, speaks in tongues on Sunday and worships pickup trucks, guns and NASCAR the rest of the week.

Those stereotypes and caricatures are alive and well in Flyover Country. But though I held radical beliefs about government, immigration and drugs that could have gotten me lynched in many places, I never felt I was in a country I didn’t like or didn’t belong in. Maybe I just didn’t go to enough sports bars, churches and political rallies, but for 11,276 miles I always felt at home.

Bill Steigerwald, born and raised in Pittsburgh, is a former L.A. Times copy editor and free-lancer who also worked as a docudrama researcher for CBS-TV in Hollywood before becoming a reporter for The Pittsburgh Post-Gazette and a columnist for The Pittsburgh Tribune-Review. He recently retired from daily newspaper journalism.