Heartland

Indianapolis: From Naptown to Super City

Aaron M. Renn — Sat, 04 Feb 2012 00:38:49 -0500

I have long touted the sports strategy that Indianapolis used to revitalize its downtown as a model for cities to follow in terms of strategy led economic and community development. I really think it sets the benchmark in terms of how to do it, and it has been very successful.

Indy is hosting the Super Bowl on Sunday, something that is locally seen as a sort of crowning achievement of the 40 year sports journey. As part of that, the Indianapolis Star and public TV station WFYI produced an hour long documentary on the journey called “Naptown to Super City.” I think it’s a must watch for anyone who is trying to figure out to revitalize their own downtown. An hour isn’t short, but given the billions of dollars cities pour into this, I think it’s worth doing some homework. It tells the story of how Indy went from a deserted downtown where local Jaycees were licensed to take their shotguns and kill pigeons to one where the Super Bowl is being hosted today.

I’ll talk more about the Indy strategy in a bit, but first the show. If you are in Google Reader this won’t display for you, so click here to watch.

One thing this brought home for me is the true magnitude of the change. Perhaps I’m being a bit uncharitable, but Indianapolis almost literally started with nothing. It was never a major, important American city. It had no brand in the market. And it had a downtown that was all but dead. Everything they have today was built almost from scratch.

Why do I think the Indy sports strategy was such a good one? Two reason: it was a good strategic area to go after, and it was backed up with very intelligent execution.

First, five reasons this was a good strategic goal to pursue:

It just fits the character of the city. Hoosiers love sports. The Indianapolis 500 and high school basketball were long established. It’s something they could behind in a way that they would never have gotten behind being the “vegetarian capital of the world” or something like there. It was authentic to the city. If you watch the video, you’ll note how locals embraced the events that were held that. That goes a long way towards explaining the success of the strategy. You have to be authentic to a place in your development efforts.
It was a whitespace opportunity where Indy could get first mover advantage. Today every city thinks they can make money off sports, but Indy really pioneered the notion that you could use sports as an economic development tool. There were a lot of firsts along the path, and that’s one reason Indy was able to take out a leadership position. Just as one example, Indy was first to do the “build it and they will come” model of building a stadium before having a team. As a result, they were able to grab the Colts, and do it in an era when you didn’t have to mortgage your whole city to make a team relocation happen.
Being America’s top city for sports events was a realistically achievable goal. I know this because the city achieved it. This is in great contrast to the umpteen cities who all claim they’ll be the “best cycling city in America” or some such.
There were huge collateral benefits to sports beyond the direct economic impact of the events and the jobs they support. They bring people to the city to show it off to people who might not otherwise come. They enliven downtown and create events that locals might actually want to attend. They also have been an amazing brand opportunity. Just think of the Colts. How many times a week during football season does the word “Indianapolis” get said on TV? Probably hundreds if not thousands. Imagine if the city had to pay advertising dollars for that exposure? Yes, sports is expensive, but I think it could be justified just as cost-efficient marketing alone. Think about how much companies pay just to put their name on the stadium. How much more is it worth to put your city’s name on the team or the event? Think about how much advertisers will be paying for a 30 second commercial in the Super Bowl? What’s it worth for all those mentions of your city during the Super Bowl again?
It was an initiative that had the possibility of being truly transformative for the city. Again, I know this is true because it was.

I’m not going to claim these were actually the thoughts going through people’s minds as the sports strategy developed or that it was this calculated. But all of these things were implicitly true all along, and I think clearly the people pushing sports must have gotten it on that at some level. So sports meets the first test of a great strategy in that it set out after a good strategic goal.

It was also something where there was a level of execution detail that far exceeded what most cities do. In business, it’s one thing to have an idea. It’s another thing to execute on it and achieve market leadership. It’s still another to generate sustainable competitive advantage that keeps you there over the long haul. Indianapolis has managed to do all of these with sports. I’ll highlight eight examples of how it did this:

It invested in world class facilities. A lot of these have remained top rated even long after they opened, like Conseco Fieldhouse, which is still ranked every year as the best arena in the United States.
Two, it laid out an entire district downtown around events hosting, with everything you need in close proximity – venues, the convention center, hotels, shopping, and entertainment. This is something that’s already been widely commented on by Super Bowl visitors who are amazed you don’t have to get shuttled around all over the place and that you can actually walk directly from the media hotel to the hotels where the teams are staying.
Three, because of this Indy is able to effectively “saturation rebrand” downtown for an event and otherwise cater to events in a way that few other cities can or will. In effect, the city has converted its downtown into a giant sound stage. Take a look at the pictures of the city. The whole downtown as been rebranded after the Super Bowl, including, for example, plastering a huge Lombardi Trophy images on the side of the city’s premier hotel. You can debate the value of this to the city, but there’s no denying its value to the NFL. How many cities are willing to do this to the extent Indianapolis is?
Indy created the Indiana Sports Corp. as the first ever non-profit management company for events. Today, everybody has adopted that model.
The city cultivated a large, experienced volunteer base for putting on events that is much more powerful than what others cities have.
Indy has been willing to take calculated risks in support of the strategy. Building the Hoosier Dome with no team to play in it – big risk.
It not only went after the events, it went after the sanctioning bodies that determined where the events would be held. The most important is of course the NCAA, but there are others too. This has resulted in Indy having a “cluster” of these organizations and direct access to the people making decisions that pays incalculable dividends. This is one area where the “face to face” discussions that occur in Indy gives the city a big leg up. It’s not just better for selling, it gives Indy critical advanced intelligence about how these organizations are conceiving of their future events needs.
Last but certainly not least, this has been a sustained, 35 year commitment. It wasn’t a party politics thing. It was a single project thing. It wasn’t a flash in the pan idea. It was something that has been relentlessly pursued over the long haul.

Add all this up and it is easy to see why still today, three or four decades after it first started and after pretty much every city decided to go after these types of events, Indianapolis is still the best place in America to host a sports event.

I hope this gives you a flavor why the Indy sports strategy was so good and so successful. It’s certainly something that’s not without its failures and downsides. The fact that sports has consumed disproportionate civic resources is one of them, and one highlighted by the documentary. But on the whole, most people seem very happy with the results.

Something the video highlights at the end is one essential attribute for success that you can’t plan for or make happen – luck. They ask questions like, what if the “Save the Pacers” telethon had failed back in the 70’s? What if the seats in the Hoosier Dome had been the originally planned variegated colors instead of the Colts blue and white colors when Bob Irsay walked in to check it out? There were many critical turning points where without a lucky break, who knows if the future of downtown Indy might have been radically different in some way. It should give us some humility about the limits of our ability to simply will things into being. On the other hand, it reminds us that if you aren’t in the game, if you aren’t swinging the bat, you don’t have any chance at all of hitting that home run. You have to play if you want to win.

This piece originally appeared at The Urbanophile.

Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile, and operates Telestrian, an online tool for economic and demographic data.

Photo of Lucas Oil Stadium courtesy of BigStockPhoto.com.

Making Room for the Old and the New Economies

Joel Kotkin — Mon, 30 Jan 2012 22:46:14 -0500

The announcements by Sens. Ben Nelson (D-Neb.) and Kent Conrad (D-N.D.) that they would not run for reelection reflects what may be the last gasps of the Great Plains Democrats, much as California’s 2010 Democratic landslide assured that Republicans are soon to become endangered species in places like Los Angeles and Silicon Valley.

The conventional explanation for these trends centers on culture or ideology, but the real cause may lie with an evolving conflict between two dueling political economies.

On one side lies the information or “creative” economy, centered in coastal big cities and university towns. On the other lies the larger “basic” economy, which produces tangible items like food, manufactured goods and fossil-fuel energy.

In the past, both political parties had liberals as well as conservatives and operated in both of these economies. Republicans thrived not only in the Heartland but also in information hubs like Silicon Valley, Southern California and even parts of Manhattan.

Similarly, Democrats were influential in large swaths of the resource and agriculture-dependent parts of the country, including the Great Plains.

However, this is increasingly no longer true. Plains Democrats, like former Sen. Byron Dorgan of North Dakota, struggled to sell the state’s remarkable energy-driven recovery to an administration hostile to fossil fuels. Many in his state, and other energy centers like Texas, view the Obama administration’s resistance to oil and gas development as an assault on economies that, over the past decade, have had the highest rates of job creation and per capita income growth in the nation.

Dorgan, frustrated with Obama’s economic policy, chose not to run for reelection in 2010. But his House colleague, Earl Pomeroy, as well as Stephanie Herseth Sandlin (D-S.D.) were defeated. Nelson’s decision reflected a reaction to the strong GOP tide in the Plains. Registered Democrats in Nebraska have dropped from 38 percent to 33 percent just since 2008. The Republicans are at 48 percent.

This is a remarkable fall from grace. As recently as 2006, Democrats held four of the six Senate seats representing the 650 miles of plains from Nebraska north to the Canadian border. If, as expected, Nelson’s seat is taken by the GOP, there will be only one — Sen. Tim Johnson (D-S.D.), who is up for what might a difficult reelection battle in 2014.

Yet another energy-state Democrat, Sen. John Tester of Montana, is facing a tough reelection contest. If he is defeated, only a handful of Democrats from energy-producing states — Joe Manchin and Jay Rockefeller of West Virginia and Mary Landrieu of Louisiana — will be left in the Senate.

For the most part, these Democrats are not being chased from office by cultural brawls over issues like gay rights or abortion — particularly in the socially moderate northern Great Plains. More damaging is the perception that Obama Democrats have little regard, even contempt, for the fundamental economics of basic industries.

The battle over energy extends beyond the major oil-producing states. In places like eastern Ohio and western Pennsylvania, a nascent shale oil and gas boom is helping strengthen resurgence in industrial jobs lost decades ago. To many business people and workers in cities like Fort Wayne, Ind., looming Environmental Protection Agency regulations on mercury as well as carbon emissions could threaten this nascent revival. Reviving the Rust Belt, many believe, requires the cheap, reliable energy that, in the near future, can come only from fossil fuels.

Instead, the Obama team reflects an urban, information economy bias. In contrast to President Bill Clinton, who supported industrial and agricultural development back when he was governor of Arkansas, Barack Obama represents an odd admixture of faculty lounge and urban bloc machine. He never developed any links to the basic economy; his worldview appears largely divorced from the realities of production. “It’s MoveOn.org run by the Chicago machine,” according to the mayor of a California farming town, a longtime Democrat.

This tilt can also be seen in the widely touted strategy of conceding working-class white voters in states like Pennsylvania and Ohio in favor of what Democratic strategist Ruy Texeria calls “the mass upper middle class.”

Today barely half of white union members, says researcher Alan Abramowicz, tilt Democratic compared with nearly two-thirds who supported them in the 1960s, when Democrats still identified strongly with the industrial and energy sectors.

This trend may be further accelerated by the prospect of deep defense cuts. Many Plains and Southern states are dependent on defense-related expenditures. In the past, Plains Democrats and Southern Democrats, like retiring Sen. Jim Webb (D-Va.), were the product of or identified strongly with the military. But today, the Democratic Party’s hawkish traditions — extending from Harry S. Truman and Sen. Henry M. Jackson to Georgia’s Sam Nunn and Webb — is all but extinct.

A parallel development can be seen in the information hubs of the Northeast and West Coast. As recently as the 1990s, Republicans could muster considerable numbers both in Silicon Valley and throughout the Los Angeles Basin. Manhattan’s “silk stocking district” regularly sent Republicans to the House.

These exceptions barely exist today. Los Angeles County, home to nearly 10 million people, has only one Republican congressman. The Bay Area, which includes the district of House Minority Leader Nancy Pelosi (D-Calif.), and Manhattan each has none. The same pattern is evident at the state and local levels — where almost the entire delegation is now “progressive” Democrats.

As in the Great Plains, this shift parallels changes in the political economy. Over the past decade, the Bay Area experienced the single largest decline in manufacturing in the country, and New York ranked second. Now the information sector — as well as related finance, health and education sectors — dominate these economies. Even business people in these areas share little in common with business people in the manufacturing or energy economies.

With dense population and far less reliance on cheap energy like coal, greater metropolitan areas like New York or San Francisco find it easier to embrace the administration’s green (read expensive) energy agenda. Indeed, many companies, including Google and several investment banks, have invested in new renewable fuel and electric battery firms that have received large loans and other subsidies from Washington and sympathetic local governments, notably in California.

The information economy is also dependent on international markets, capital and, most particularly, brainpower. This makes them more sensitive to the nativist pandering that has been de rigueur in GOP national politics. Republican politicians, who now usually cater to their religious right by campaigning against gay marriage and abortion, turn off even libertarian voters in information hotbeds, where such views are anathema.

Sadly, these two economic visions exacerbate already existing cultural and political divisions. This also threatens the country’s ability to compete globally at a time of great opportunity. To overcome our competitors, particularly China, the United States needs a Washington that embraces both the information economy — where the United States still remains pre-eminent — and the basic economy — where we are seeing signs of a nascent renaissance.

Only when both economies are appreciated and supported in both parties can we find the common ground necessary to succeed in the coming decade.

This piece originally appeared in Politico.

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.

Photo from BigStockPhoto.com.

This Is America's Moment, If Washington Doesn't Blow It

Joel Kotkin — Thu, 19 Jan 2012 11:13:18 -0500

The vast majority of Americans believe the country is heading in the wrong direction, and, according to a 2011 Pew Survey, close to a majority feel that China has already surpassed the U.S. as an economic power.

These views echo those of the punditry, right and left, who see the U.S. on the road to inevitable decline. Yet the reality is quite different. A confluence of largely unnoticed economic, demographic and political trends has put the U.S. in a far more favorable position than its rivals. Rather than the end of preeminence, America may well be entering a renaissance.

Just survey the globe. The European Union’s prolonged crisis will likely end in further decline. Aging Japan has long passed its prime, its market share receding in everything from autos to high tech. China’s impressive economic juggernaut has slowed down, and the Middle Kingdom faces increased social instability, environmental degradation and a creaky one-party dictatorship.

While the U.S. has its challenges, it is positioned to achieve a more solid long-term trajectory than its European and Asian rivals. What it lacks, however, is a strong political leadership capable of seizing this opportunity.

Resources

Energy constitutes the biggest ace in the hole for the U.S. For almost half a century, an enormous fossil fuel bill that still accounts for 40% of the nation’s trade deficit has hampered economic growth. Now that situation is changing rapidly.

Due to vast new finds and improved technology to exploit them, the U.S. is now the world’s largest producer of natural gas and could emerge as the leading oil producer by 2017. Reserves of natural gas — a clean-burning fuel — are estimated at 100 years supply and could generate more than 1.5 million new jobs over the next two decades.

The U.S. agricultural sector is also booming, with exports reaching a record $135.5 billion in 2011. With global demand increasing, sustained growth will continue across America’s fertile agricultural regions.

Manufacturing

The other big game changer is manufacturing. As President Barack Obama recently acknowledged, this is America’s “moment” to seize the industrial initiative. U.S. manufacturers have expanded their payrolls for two straight years, and they have increased production while Japan, Germany, China and Brazil have scaled back.

A recent survey of manufacturing CEOs revealed that 85% believed production could shift soon from overseas. Both foreign and domestic manufacturers are alarmed about rising wages and labor unrest in China. Some important Japanese, German and Korean companies also have concerns about China’s policies that favor local firms and abscond with investor’s technology.

Foreign Investment

Rising foreign investment reflects the new American competitiveness. Since 2008 foreign direct investment to Germany, France, Japan and Korea has stagnated; in 2009 overall investment in the E.U. dropped 36%.

In contrast, in 2010 foreign investment in the U.S. rose 49%, mostly coming from Canada, Europe, and Japan. Industrial investment rose $30 billion just between 2009 and 2010, while investment in the energy sector more than tripled to $20 billion.

The Information Sector

In the information sector, American domination continues to mount, contrary to predictions of decline over the past two decades. Although high-tech manufacturing has shifted largely to Asia, Americans rule the increasingly strategic software sector. American-based companies, who constitute more than two-thirds of the world’s 500 largest software companies, including nine of the top ten.

Outside the U.S., there are no significant equivalents of Apple, Google, Microsoft, Amazon and Facebook. Hollywood, for its part, rules the entertainment world, producing 40% of world’s audiovisual exports, a dominion that troubles China’s President Hu Jintao, who recently complained that the “cultural fields” represent “the focal area” for Western “infiltration”.

Demographics

The Great Recessionhas slowed population growth everywhere, but the U.S. maintains the youngest and most vibrant demographic profile of any advanced country. Between 1980 and 2010, the U.S population expanded by 75 million to over 300 million. In contrast many European countries, including Germany, have suffered stagnant growth, while in Russia and Japan populations have already started declining.

The disastrous fiscal implications of slow or negative population growth are evident in Greece, Spain and Italy, all of which suffer among the world’s lowest fertility rates. Rapid aging also will soon catch up with Germany. By 2030, Germany will have 48 retirees for every 100 workers — that’s barely two workers per retiree. The numbers are even worse in Japan: 53 retirees for every 100 workers by 2030.

Political Factors

Given the ineptitude of the last two administrations, enthusiasm about America’s political system is hard to justify. But our constitutional systems of laws and checks on central power remain a critical advantage. Immigration has declined with the recession, but the U.S. can expect to welcome religious and political exiles — such as Middle Eastern Christians displaced by the “Arab Spring” — as well as Greeks and Irish fleeing Europe’s economic decline.

Many from Russia and China are seeking to immigrate to the United States, Canada or Australia in order to protect property or just live a freer life. Indeed, among the 20,000 Chinese with incomes over 100 million Yuan ($15 million), 27% have already emigrated and another 47% have said they were considering it, according to a report by China Merchants Bank and U.S. consultants Bain & Co. published in April.

Needed from Washington: A New American Strategy

Sadly no leading politician or political party seems ready to embrace the country’s new strategic advantages. Many on the left may find the very notion distasteful, having swallowed declinism with their academic mother’s milk. The president himself dislikes the notion of American “exceptionalism.” Many key Obama backers like SEIU boss Andy Stern and former auto czar Steven Rattner, embrace the superiority of China’s authoritarian system. Others embrace Europe and even Japan as models for an aging superpower.

Worse still: Some Obama policies work against the well springs of national resurgence. Threats to raise income taxes on families making over $250,000 directly threatens the aspiring entrepreneurial class more than the real “rich” whose fortunes are protected by low capital gains taxes and family trusts. Most critical: The administration’s hostility to fossil fuel represents a direct threat to the country’s greatest new source of advantage and threatens to strangle America’s recovery in its infancy.

Not that the Republicans are any less clueless. Many reject the infrastructure needed by an expanding economy — ports, roads, bridges as well as worker training and support for basic research — as mere “pork.” Budget restraint and fiscal discipline are important, but preparing the country for more rapid economic growth requires an active, supportive government.

Republicans also tend to view immigration as something akin to a hostile invasion. Yet many key industries — notably manufacturing and high tech — rely heavily on immigrant entrepreneurship, intelligence and work values. Running against immigration constitutes an assault on the nation’s increasingly diverse demographics.

So this is where we now sit. With all the essential elements for a strong, sustained recovery place, the big question is whether we will find political leaders capable of tapping this country’s phenomenal potential.

This piece originally appeared at Forbes.com.

Photo from BigStockPhoto.com.

Population Change 2010-2011: Interesting Differences

Richard Morrill — Mon, 09 Jan 2012 00:56:44 -0500

The recently released estimates of population change and the natural increase and migration components of that change for 2010-2011 contain a few surprises, as well as much what has come to be expected. What we population freaks have been awaiting are estimates of the components of change for the whole 2000-2010 decade, but these are still being adjusted, in part because of the tremendous complexity of migration and immigration and, yes, estimating just who is in the country!

I provide four simple maps, one of population change, 2010-2011, one for the portion f that change due to natural increase (births less deaths), one for immigration and one for domestic or internal migration between the states. Overall the big news is a slowdown of growth, to only .92 %, the lowest since the 1940s. This was due to a fewer births, and thus of natural increase, because of folks not marrying or marrying later, and or postponing births because of the recession. It also has to do with a reduction in immigration, again because of the recession, and possibly because of anti-immigrant sentiment and policies.

The second big news is the somewhat surprising shift of some rapid growth to areas beyond the sunbelt and towards the northern tier. Still impressive absolutely, the pace of growth has slowed in states such as Florida and Georgia, more so in Arizona and even more in Nevada, from the housing collapse and lower immigration. The South Atlantic region remained strong, but the new locus of faster growth is the “northern tier” from Minnesota through the Dakotas to Oregon and Washington. The Dakotas’ growth, also affecting Montana and Wyoming, is energy related, while that of Washington, now the 6th fastest growing state, is a reflection of a young population, continuing immigration, both high tech and agricultural growth, and a relatively robust economy.

Natural increase. Natural increase is low in the states with the highest shares of the elderly, most obviously Florida, Pennsylvania, West Virginia and northern New England, in general regions and states from which young people have moved, e.g., MI, OH, KY, MO, AR, LA, MS, AL and IA, across the eastern heartland. But natural increase may have picked up a little in economically stronger states like NY, NJ, IL, IN and WI. Natural increase rates are higher, as might be expected, across the southwest and in Mormon states like Utah and Idaho. The bigger surprise once again is in the the upper Plains, including MN, ND, SD, and NE. Again Washington surprises, behaving like a sunbelt state, due more to an influx of a young population, than high fertility.

Immigration. Immigration overall has slowed, but was a relatively significant part of growth for much of the northeast, especially NY, NJ, MA, CT, RI, MD and DE, and remained important in FL, CA, NV, AZ, and WA (and yes Texas, but at a lower rate). The pace of immigration fell most in Nevada and Arizona.

Domestic migration. This map is the one that most closely reflects the perceived and/or actual attractiveness of the states in the recent past. The states with the highest rates of net out-migration are mainly in the old urban-industrial core, including IL, MI, OH, NY, NJ and even CT, KS in the Plains and now Nevada. Even Alaska, Hawaii and especially California lost through domestic migration. The biggest change is the shift from net out-migration to net gains for the District of Columbia, Louisiana (after years of loss), and especially North Dakota, which made strong gains for the first time in decades. Missouri, New Hampshire, Utah and especially Nevada shifted from net gain to net loss.

The gains of Texas and Florida, and at a lower rate, North and South Carolina and Tennessee, continue a pattern seen throughout the 2000-2010 decade. But Arizona, Georgia and Virginia have slowed down, and Nevada went from big gains to a loss. The biggest winners are South and especially North Dakota and Montana, in a dramatic turnaround, Colorado, now with the 4th highest rate, and Washington, with the 5th highest. Colorado appears especially popular with retiree migrants, particularly from California. DC and ND, losers for 2000-2009 had the two highest rates of gain for 2010-2011!

Warning: These trends are fascinating, but we should remember that economic conditions – and even perceived attractiveness of states for cultural or environmental reasons – are volatile and can change again and again.

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

The U.S. Economy: Regions To Watch In 2012

Joel Kotkin — Wed, 04 Jan 2012 13:02:28 -0500

In an election year, politics dominates the news, but economics continue to shape people’s lives. Looking ahead to 2012 and beyond, it is clear that the United States is essentially made up of many economies, each with distinctly different short- and long-term prospects. We have highlighted the five regions that are most poised to flourish and help boost the national economy.

Our list assumes that we will be living in a post-stimulus environment. Even if President Obama is re-elected, it will largely be the result of the unattractive nature of his opposition as opposed to his economic policies. And given it is unlikely the Democrats will regain the House — and they could still lose the Senate — we are unlikely to see anything like the massive spending associated with Obama’s first two years in office.

Clearly the stimulus helped prop up certain regions, such as New York City, Washington and various university towns, which benefited from the financial bailout, lax fiscal discipline and grants to research institutions. But in the foreseeable future, fundamental economic competitiveness will be more important. Global market forces will prove more decisive than grand academic visions.

With that in mind, here are our five regions to watch in 2012.

1. The Energy Belt. Even if Europe falls into recession, demand from China and other developing countries, as well as threats from Iran to cut off the Persian Gulf, will keep energy prices high. While this is bad news for millions of consumers, it could be a great boon to a host of energy-rich regions, particularly in Texas, Oklahoma, the Dakotas, Montana, Louisiana and Wyoming. New technologies that allow for greater production require higher prices than more conventional methods — roughly $70 a barrel — and most experts expect prices to stay above $100 for the next year.

Goldman Sachs recently predicted that the U.S. will become the world’s largest oil producer by 2017. The bounty is so great that the key energy-producing states have consistently out-performed the national average in terms of job and income growth. Houston, the nation’s energy capital, has enjoyed the fastest growth in per-capita income in the past decade. No reason to expect this to slow down much this year.

Energy growth, notes Bill Gilmer, senior economist at the Federal Reserve Bank of Dallas, also sparks “upstream” expansion in a host of other industries, such as chemicals and plastics. Massive new expansions to serve the industry are being planned not only in Texas and Louisiana but in former rust belt states, including now gas-rich Ohio. The big exception is oil-rich California, which seems determined to keep its fossil fuels — and the growth they could drive — out of mind and underground.

2. The Agricultural Heartland. You don’t have to have oil or gas to enjoy a strong economy. Omaha, Neb., is not in the energy belt, but its strong agriculture-based economy keeps its unemployment rate well under 5%. Demand from developing countries — especially China, which is expected to supplant Canada as our No. 1 agricultural market — should boost the nation’s farm income to a record $341 billion.

Most of the increased product demand lies in commodities like soybeans, corn, barley, rice and cotton. Contrary to the assumptions of East Coast magazines such as The Atlantic, which paint a picture of a devastated and dumb rural America, places like Iowa are doing very well indeed and are likely to continue doing so. Urban economies like Des Moines are also benefiting and expanding into finance and other non-farm related activities. The once massive out-migration from the region has slowed to something like a balance, with increasingly strong in-migration from places like Illinois and California.

3. The New Foundry. The revival of Great Lakes manufacturing is one of the heartening stories of the past year, but the biggest beneficiaries of American manufacturing’s revival will likely be in the Southeast and along the Texas corridor connected to Mexico. Future big growth will not come from bailed-out General Motors or Chrysler, with their legacy costs and still-struggling quality issues, but from foreign makers — Japanese, German and increasingly Korean — that build highly rated, energy-efficient vehicles. These countries are not just investing in cars; they also have placed steel mills and aerospace facilities in the rising south-facing foundry.

Foreign companies have good reasons to look to an expanded U.S. base: aging domestic markets, diminishing workforces and a growing concern over China’s tendency to steal technology and favor state-owned firms. This shift from domestic production has been building for years, in large part due to familiar reasons of less unionization and lower business costs. Of the ten foreign auto assembly plants opened or announced between 1997 and 2008, eight were in Southern right-to-work states. As the recovery has taken hold, new expansions are being announced. In 2011 Toyota opened a new plant in the tiny hamlet of Blue Springs, Miss., just 17 miles from Elvis’ hometown of Tupelo, while Mercedes-Benz announced $350 million to add capacity to its plant just outside of Tuscaloosa.

4. The Technosphere. Silicon Valley, as well as the Boston area, has thrived under the stimulus, and worldwide demand for technology products will continue to spark some growth in those areas. Over the past year, San Jose-Silicon Valley, Boston and Seattle all stood in the top five in job creation among the country’s 32 largest metro areas. The coming IPO for Facebook and other Valley companies may heighten the tech sector’s already smug sense of well-being.

Unfortunately for the rest of California, and even more blue-collar Bay Area communities like San Jose and Oakland, high costs and an unfavorable regulatory environment will keep this bubble geographically constrained. Historic patterns, particularly over the past decade, suggest that as the core tech companies expand, they are likely to head to business-friendly places such as Salt Lake City, Raleigh and Columbus, Ohio, which have picked up both tech companies and educated migrants from California.

5. The Pacific Northwest. This is one blue region in the country with excellent prospects. For one thing, both Washington and Oregon enjoy considerable in-migration, in sharp contrast to New York, California and Illinois. They also have a more varied economy than Silicon Valley, with strong companies connected to retail (Amazon, Costco and Starbucks), aerospace (Boeing) and software (Microsoft).

The Seattle region, home to all these companies, is the real standout. It ranked first on our recent list of technology regions and third in industrial manufacturing, a trend likely to continue as Boeing expands production of its new 787 Dreamliner. The business climate and the housing costs are somewhat challenging, but more favorable than in California. The Bay Area and Los Angeles continue to send large numbers of migrants to the Puget Sound region. Over the long term, the area also benefits from possessing ample cheap renewable energy (mostly hydro) and water, which are both in short supply elsewhere.

These scenarios, of course, could be changed by either world events — such as an unexpected crash in the Chinese economy — or a stunning Democratic sweep in 2012 that would occasion another round of Obamaian stimulus and ever more heavy-handed regulation. Yet barring such developments, expect the back to basics economy to continue enriching these regions best positioned to take advantage of it.

This piece also appeared at Forbes.com.

Photo by BigStockPhoto.com.

The Shifting Landscape of Diversity in Metro America

Aaron M. Renn — Wed, 04 Jan 2012 00:38:58 -0500

Census 2010 gave the detail behind what we’ve known for some time: America is becoming an increasingly diverse place. Not only has the number of minorities simply grown nationally, but the distribution of them among America’s cities has changed. Not all of the growth was evenly spread or did it occur only in traditional ethnic hubs or large, historically diverse cities.

To illustrate this, I created maps of U.S. metro areas showing their change in location quotient. Location quotient (LQ) measures the concentration of something in a local area relative to its concentration nationally. This is commonly used for identifying economic clusters, such as by comparing the percentage of employment in a particular industry locally vs. its overall national percentage. In a location quotient, a value of 1.0 indicates a concentration exactly equal to the US average, a value greater than 1.0 indicates a concentration greater than the US average, and a value less than 1.0 indicates a concentration less than the US average.

While commonly used for economic analysis, the math works for many other things. It can be useful to measure how the concentration of particular values changes over time relative to the national average. In this case, we will examine the change in LQ for various ethnic groups between the 2000 and 2010 censuses for metro areas. Those metro areas with a positive change in LQ grew more concentrated in that ethnic group compared to the US average over the last decade. Those with a negative change in LQ grew less concentrated compared to the nation as a whole, even if they grew total population in that ethnic group.

To increase concentration level requires growing at a faster percentage than the US as a whole. This is obviously easier for places that start from a low base than those with a high base. In this light, places that have traditionally been ethnic hubs – such as west coast metros for Asians – can grow less concentrated relative to the nation as a whole even if they continue to add a particular ethnic group. Asian population, for example, can grow strongly in California, but at a slower rate than the rest of the country. This is indeed the case as groups like Hispanics and Asians have been de-concentrating from the west coast, and now are showing up in material numbers even in the Heartland.

Black Population

Black Only Population, Change in Location Quotient 2000-2010

The change in Black concentration is particularly revealing. Much has been written about the so-called reversing of the Great Migration. But contrary to media reports, there is no clear monolithic move from North to South. Instead, we see that the outflow has been disproportionately from America’s large tier one metros like New York, Chicago, and Los Angeles. In contrast, Northern cities like Indianapolis, Columbus, and even Minneapolis-St. Paul (home to a large African immigrant community) grew Black population strongly, and actually increased their Black concentrations. Similarly, there were clearly preferred metro destinations in South for Blacks, like Atlanta and Charlotte. Many other Southern metros , particularly those along the Atlantic coast of Georgia and the Carolinas continued to lose their appeal to Blacks, relatively speaking.

Hispanic Population

Hispanic Population (of any race), Change in Location Quotient 2000-2010

Here we see de-concentration clearly in action. The Mexican border regions retained high Hispanic population counts, but they are no longer as dominant as in the past. Places like Nashville, Oklahoma City, and Charlotte particularly stand out for increasing Hispanic population percentage. Again, large traditionally diverse tier one cities like New York and Chicago show declines on this measure as smaller cities are now more in on the diversity game.

Asian Population

Asian Only Population, Change in Location Quotient 2000-2010

Again, we see here that America’s Asian population spread well beyond traditional west coast bastions. There were big increases in Asian population counts, with resulting LQ changes, in places like Atlanta, Indianapolis, Philadelphia, and Boston. Even New York (which now has over one million Asian residents within the city limits alone) and Chicago showed gains among Asians.

Children (Population Under Age 18)

As a bonus, here is a look at LQ change for metro areas for people under the age of 18.

Children (Population Under Age 18), Change in Location Quotient 2000-2010

Here we see that metros along America’s northern tier now have relatively fewer children than a decade ago, while metros like Denver, Dallas, and Nashville had more. Clearly, some places are increasingly seen as better – and perhaps also more affordable – locations for child rearing than others. Perhaps unsurprisingly many of the out of favor locales are either expensive, have poor economic prospects, and/or are excessively cold. Not surprisingly, for example, Atlanta, Houston and Florida’s west coast have gained in this demographic while much of the Northeast, particularly upstate New York, have lost out.

The overall key is while there are certain broad themes that emerge from the recent Census, such as America’s increasing diversity or signs of a reversing of the Great Migration, we need to take a more fine grained view to see which places are in fact benefitting and being hurt by these trends. What we see here is that traditional large urban bastions of black population and ethnic diversity are no longer the only game in town. Smaller places in the interior and the South are now emerging as diversity magnets in their own right, as well as magnets for families with children. This is the collection of places to watch to look for the next set of great American cities to emerge.

Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile. Telestrian was used to analyze data and to create maps for this piece.

Note: The original version of this piece included incorrect charts for the Asian, Hispanic, and child measures.

New Census Data Reaffirms Dominance of the South

Wendell Cox — Wed, 21 Dec 2011 14:03:49 -0500

The 2011 state population estimates released earlier today by the Census Bureau show that the South has retained its dominant position in both population and growth over the last year. Southern states accounted for more than one half of the nation's population growth between 2011 and 2000, despite having little more than one third of the population. Moreover, the South was the recipient of 95% of the inter-regional net domestic migration (people moving from one state to another), with the West accounting for the other 5%, with the losses split between the Northeast and the Midwest.

Overall, a net 533,000 people moved from one state to another, somewhat above the low of 503,000 in 2008 and below the 573,000 at the beginning of the previous decade (2001). The figure, however, remained less than one-half that of the mid 2000s peak.

The state data confirmed the "return to normalcy," that had been indicated by the 2010 American Community Survey data.

The South Rises Again

In 2011 (July 2010 to June 2011), seven of the top domestic migration gaining states were in the South. This is a restoration of the same dominance the South achieved in 2001 to 2006. Some of the states have changed, but the overall impact is little different.

Texas:Texas again led the nation in net domestic migration, adding 145,000 people from other states to its population. This was a slight increase from the 143,000 net domestic migrants in 2009 (Note 1) and was the highest for Texas since the artificially intense exodus from Louisiana in the year (2006) following hurricanes Katrina and Rita. Texas has led the nation in net domestic migration for six years and ranked second in the nation over the 2001 to 2009.

Florida: Most spectacularly, however, has been the performance of Florida. Florida had been a net domestic migration leader for years, and had been number one from 2001 through 2005. However, when its highly inflated house prices collapsed (New York Federal Reserve Bank research refers to Florida as one of the "four bubble" states, along with California, Arizona and Nevada), Florida lost domestic migrants for the first time in at least six decades, in both 2008 and 2009. That has been radically turned around. In 2011, Florida added 119,000 net domestic migrants, housing prices dropped to normal levels (Note 2). While this is less than one half the gains in 2004 and 2005, it exceeds the annual Texas increase in the previous decade by 20%.

North Carolina and South Carolina: North Carolina ranked third, adding 41,000 net domestic migrants. This is an improvement from a fourth-place ranking in the previous decade. Neighboring South Carolina added 22,000 net domestic migrants and ranked sixth. This is an improvement from the previous decade's ranking of seventh. The domestic migrants to North Carolina and South Carolina have been called "halfbacks," as some have suggested that many who had moved to Florida from the Northeast have subsequently moved to North Carolina and South Carolina, essentially one half of the way back to where they moved from originally.

Tennessee, Georgia and Virginia: Tennessee (7th), Georgia (8th) and Virginia (9th) rounded out the South's seven of the top 10 states. Tennessee improved from having been 8th in 2001 to 2009, while Georgia dropped from 5th and Virginia was a new entrant, having previously ranked 12th.

Western Runners-Up

While the West continued to show net domestic migration gains, this formerly fastest-growing area of the nation has fallen well behind.

Washington: Washington ranked fourth in 2011, an improvement from ninth between 2001 and 2009. Washington added 35,000 net domestic migrants.

Colorado: Colorado also improved its position, adding a net 31,000 domestic migrants and ranking fifth in 2011, which is up from its 10th ranking in 2001 through 2009.

Oregon:Oregon ranked 10th, adding 14,000 net domestic migrants and was a new entrant to the top 10, having placed 11th between 2001 and 2009.

Things Never Change: The Bottom 10

A similar restoration of normalcy is evident in the bottom 10 states. From 2001 to 2009, all of the bottom 10 net domestic migration states were in the Northeast or the Midwest, joined by California. This changed somewhat in 2011, with formerly fast-growing Nevada, edging out one of the former bottom 10. There was some movement at the very bottom of the list.

New York: New York recovered its last place position (51st), which it held overall between 2001 and 2009, but had yielded to California later in the decade. New York lost 114,000 net domestic migrants in 2011, which compares to the 1,650,000 loss between 2000 and 2009.

Illinois:Illinois had the second-highest net domestic migration loss, sending 79,000 of its residents to other states. Illinois had ranked 49th in net domestic migration in the previous decade, with a 615,000 loss. Unlike the other biggest losers, New York and California, the Illinois rate in the single year of 2011 exceeded its annual rate of net domestic migration loss between 2000 and 2009.

California:The bad news is that California continues to be among the most hemorrhaging states in net domestic migration. The 2000 to 2009 net domestic migration loss of 1,500,000 was more than the population of the cities (municipalities) of San Francisco and Sacramento combined. Perhaps it is good news that the net domestic migration loss dropped to 66,000 in 2011, less than half the annual rate in the previous decade. California ranked 49th in net domestic migration in 2011, an improvement from its 50th place position in 2001 through 2009.

Michigan: Michigan continued its heavy losses, losing a net 57,000 domestic migrants in 2011 and ranking 48th. In the previous decade, Michigan had also ranked 48th and had a net loss of more than 535,000 domestic migrants.

New Jersey, Ohio and Connecticut: New Jersey, Ohio and Connecticut occupied the next three higher positions in the bottom ten. The New Jersey and Ohio ranks of 47th and 46th were the same as in the previous decade. Connecticut ranked 45th in 2011 and had ranked 42nd, at the top of the bottom 10, in the previous decade. Each of these states experienced an acceleration of net domestic outmigration relative to their annual loss in the previous decade. In the previous decade, the New Jersey and Connecticut losses had been driven by the New York metropolitan area, which suffered the preponderance of the net domestic migration losses in the Northeast.

Missouri and Indiana: The Midwestern states of Missouri and Indiana were new entrants to the bottom 10. Missouri ranked 44th in net domestic migration in 2011, losing 12,000, a substantial deterioration from its 20th ranking in the previous decade when the state added 41,000 residents from other states. Indiana ranked 43rd compared to its 32nd place ranking in the previous decade.

Nevada: Nevada, which had ranked sixth in net domestic migration in the previous decade, occupied the top position in the bottom 10, at 42nd. Nevada lost 11,000 domestic migrants, compared to a gain of more than 360,000 in the previous decade. Like Florida, house prices had escalated sharply during the housing bubble and prices have since fallen back to normal levels. However, much of Nevada's economy is tied to that of California, which could be a hindrance to the restoration of its previous growth.

Other Notes

The other "bubble state," Arizona ranked 11th in net domestic migration, adding 13,000 new residents from other states. As in Florida, house prices had escalated sharply but have since fallen back to normal levels. However, despite its healthy domestic migration, Arizona's gain is far less than its annual rate in the previous decade.

There are nothing but surprises in the balance of the top 15. Oklahoma, which has long exported people, especially to the West, ranked 12th in net domestic migration, an improvement from 19 in the previous decade. The District of Columbia ranked 13th, which is a strong improvement from its previous ranking of 37th. Louisiana continued its recovery, ranking 14th, which is an improvement from 45th in the previous decade. North Dakota, whose 2000 population was less than that of 1920, ranked 15th, which is an improvement from 31th in the previous decade.

No Matter How Much Things Change They Stay the Same

Both over the last decade and in 2011, the South accounted for 53% of the nation's growth, the West 32%, with the Midwest rising from 8% to 9% and the Northeast falling from 7% to 6%. And, as indicated above, net domestic migration results were similar. The conclusion from the new census estimates is consistent with the old adage that "no matter how much things change, they stay the same."

Net Domestic Migration by State:
2001-2009 and 2011
By 2011 Rank
State	2011	2011 Rank	2001-2009	2001-2009 Rank
Texas	145,315	1	838,126	2
Florida	118,756	2	1,154,213	1
North Carolina	41,033	3	663,892	4
Washington	35,166	4	239,037	9
Colorado	31,195	5	202,735	10
South Carolina	22,013	6	306,045	7
Tennessee	20,328	7	259,711	8
Georgia	17,726	8	550,369	5
Virginia	15,538	9	164,930	12
Oregon	13,636	10	177,375	11
Arizona	13,150	11	696,793	3
Oklahoma	8,933	12	42,284	19
District of Columbia	8,334	13	(39,814)	37
Louisiana	7,085	14	(311,368)	45
North Dakota	6,368	15	(18,071)	31
Kentucky	5,761	16	81,711	15
Arkansas	5,724	17	75,163	16
Montana	3,888	18	39,853	21
West Virginia	2,814	19	17,727	26
South Dakota	2,610	20	7,182	27
Delaware	2,347	21	45,424	18
New Mexico	2,202	22	26,383	24
Alabama	1,974	23	87,199	14
Alaska	740	24	(7,360)	29
Wyoming	(149)	25	22,883	25
Idaho	(256)	26	110,279	13
Utah	(826)	27	53,390	17
Vermont	(841)	28	(1,505)	28
Nebraska	(977)	29	(39,275)	36
Maine	(1,000)	30	29,260	23
Pennsylvania	(1,121)	31	(33,119)	34
Iowa	(1,361)	32	(49,589)	40
Hawaii	(2,320)	33	(29,022)	33
Maryland	(2,994)	34	(95,775)	43
New Hampshire	(3,645)	35	32,588	22
Rhode Island	(6,273)	36	(45,159)	38
Mississippi	(6,672)	37	(36,061)	35
Kansas	(7,928)	38	(67,762)	41
Minnesota	(8,073)	39	(46,635)	39
Massachusetts	(10,886)	40	(274,722)	44
Wisconsin	(10,990)	41	(11,981)	30
Nevada	(11,113)	42	361,512	6
Indiana	(11,412)	43	(21,467)	32
Missouri	(11,831)	44	41,278	20
Connecticut	(16,848)	45	(94,376)	42
Ohio	(44,868)	46	(361,038)	46
New Jersey	(54,098)	47	(451,407)	47
Michigan	(57,234)	48	(537,471)	48
California	(65,705)	49	(1,490,105)	50
Illinois	(79,458)	50	(614,616)	49
New York	(113,757)	51	(1,649,644)	51

Data from US Bureau of the Census

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Note 1: The Census Bureau did not produce domestic migration data for 2010 (2009-2010). Any reference to 2010 in this article is based upon an interpolation of the 2010 estimate from 2009 and 2011 Census Bureau estimates.

Note 2: By 2010, housing affordability in all of Florida's four major metropolitan areas with the exception of Miami had been returned to a Median Multiple (median house price divided by median household income) of approximately 3.0 or less, which is the historical norm (See: 7th Annual Demographia International Housing Affordability Survey). During the housing bubble of the early to middle 2000s, the Median Multiple had risen to above 5.0 in all of the major metropolitan areas except Jacksonville.

Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life”

Iowa: Not Just the Elderly Waiting to Die

Jacob Langenfeld — Fri, 16 Dec 2011 12:07:58 -0500

Stephen Bloom, a journalism professor at the University of Iowa, created quite a stir in Iowa this week with a piece in The Atlantic describing his unique observations on rural Iowa as evidence that it doesn’t deserve its decidedly powerful hand in the vote for the president. After the article appeared last Friday both his colleagues and the massive student body of the state he so harshly criticizes are returning the favor.

Mr. Bloom’s writing is not offensive because it contains no truths, but because has over-generalized our collective character as unfalteringly Christian, complacent, ignorant, and uncultured. He continually describes a sense of delusion that is rampant in the Iowa populace. And, of course, since we’re from Iowa we must have met a meth head before, right?

When I was a four year old, my parents picked up everything they had and transplanted their lives from Phoenix all the way to Northwest Iowa. I was young, but I can still remember the farm that we originally settled in-- it was the kind of farm you see in a painting: a one-level home, a big red barn, two silos for storage, a small thicket grove with a number of deer, and even a fenced-in area for hogs. I was living the rural Iowa dream.

Eventually, when I was around seven, our next settlement of choice was a (very) small town only a couple of miles from the farmhouse. The city’s population had around 200 people, the vast majority of them at least 50 years old, and a main street littered with old buildings and storefronts of yesterday that had been abandoned over the years since their mid-century inceptions. People didn’t move to this town; instead those living in it would die from old age, or, in my case, move away in hopes of seeing something bigger.

I’m well aware of the stereotypes of Iowans: we’re wannabe hicks, we’re uncultured, we hunt, we tend to our rolling hills of corn and beans, we all drive Ford trucks because they “ride better” than anything else. I’ve grown up with people that fulfill these stereotypes here and there and I am no stranger to small town life, but not every soul that I have met in this state fits the profile as Professor Bloom posits. Far from it.

Expectedly, Bloom’s portrayal of Iowans hasn’t exactly had a warm reception. On Tuesday, the Daily Iowan’s front page had perhaps the most outrageous quote that Bloom’s article included, labeling rural Iowans as nothing more than “the elderly waiting to die, those too timid (or lacking in educated [sic]) to peer around the bend for better opportunities, an assortment of waste-toids and meth addicts with pale skin and rotted teeth, or those who quixotically believe, like Little Orphan Annie, that ‘The sun'll come out tomorrow.’”

Yesterday, Sally Mason, the president of the University of Iowa, sent out a campus-wide letter reminding the students that she “disagrees strongly with and was offended by Professor Bloom’s portrayal of Iowa and Iowans”. She reminds us of the generosity that Iowans famously possess and of our “pragmatic and balanced” lifestyles. She also goes on to speak about Dubuque’s recent revitalization, the kinds of companies Iowa has attracted (namely Rockwell Collins in Cedar Rapids and Google in Council Bluffs), and the fact that Iowa City, at times called the “Athens of the Midwest”, is designated as the only “City of Literature” in the United States. It seems like Bloom forgot to take any of this into account.

He even goes so far as to berate and categorize Iowa’s Mississippi River cities as “some of the skuzziest cities” that he’s ever visited. Cities such as Burlington, Keokuk, Muscatine, and Davenport all seem to be more degraded, violent, and worse-off than some of the cities he’s used to having seen growing up in New Jersey, a place with cities that are labeled time and time again for their overall “skuzziness.” Has he ever driven to Newark?

It seems that Bloom’s laughable interpretation of his years in Iowa have a few rings of truth that I’ve definitely witnessed, but to completely overgeneralize a people into one category assuming it’s only an “Iowa thing” is inappropriate and crude. Is he correct about anything at all? The numbers show that he is off base about the state as a whole.

The Mississippi River cities’ so-called blight is similar to many other hard hit industrial cities in the Midwest, perhaps on a similar scale to areas in Michigan (which was the only state in the past Census to actually lose population) where Bloom has holed up most recently as a visiting professor for the University of Michigan. Even so, Iowa has the 11th lowest household poverty rate in the nation. So much for widespread blight.

The state’s brain drain is always a topic of discussion. There has been a very noticeable population shift of rural to urban in the past half-century which was especially fueled by the farming crisis in the 80s, but this trend holds out empirically for all Midwestern states. The problem is that a look at the numbers doesn’t confirm major outmigration. Iowa saw a net gain from other states according to IRS tax return data from 2008-2010. In fact, the net gain from the top 12 source states – states like Illinois, California, and Michigan – in the last three years is 40% higher than the net loss to the top destinations. If Iowans are “fleeing” anywhere, it’s to places like Texas, the largest gainer, and second placed South Dakota which the professor would no doubt like even less.

Iowa does have high concentrations of people over age 70, but that group makes up about 10% of the total population, not enough to skew the other age groups much from the national average. Iowa has an average number of children, and it lags the most in 35-44 year olds: about 10%. This older group skews the state’s educational attainment numbers as well. Iowa’s young workforce is well educated, ranking 11th of all states in residents with at least an associate’s degree. Bloom’s claim that the state is uneducated is simply not true.

The median age of those living in rural areas is 41.2 while urbanites are relatively young at 35.8. To further add to these negative trends, rural areas have a job growth rate of -6% in the past three years, these numbers mainly fueled by the recession. But overall state jobs are is down 2.8% since January 2008, better than 35 other states. Clearly Iowans are not lazy and giving up.

Four Iowa cities were even included on CNN Money’s Best Cities to Live in 2011. (This includes the Mississippi River city of Bettendorf.) The state and its cities are also a great place to do business, according to Forbes. In 2010, Des Moines was ranked first, with Cedar Rapids at 13th beating out even a few Texan heavyweights, including Houston, Dallas, and Fort Worth that have been lauded for having a plethora of jobs. The 2011 list puts Des Moines in second place and Cedar Rapids in 11th. It seems Iowa isn’t as economically distraught as Bloom leads us to believe.

Bloom comes off as nothing more than an ignorant, smug “city-slicker” (a word that Iowans apparently use to describe Obama) who sees the state through an apparently very blurry window. He claims to have seen all 99 counties of Iowa, but how can he possibly paint a portrait of the state that is so absurdly misguided after living here for so long? If this is what they teach in journalism school, perhaps our skepticism of the media may be better placed than even we suspect.

Jacob Langenfeld is a senior undergraduate at the University of Iowa studying economics and geography.

Mark Schill contributed demographic analysis to this piece.

Des Moines photo courtesty of BigStockPhoto.com.

HELP WANTED: The North Dakota Boom

Debora Dragseth — Wed, 26 Oct 2011 01:38:35 -0400

The nation’s unemployment rate has been hovering at nearly nine percent since 2009. But not every state is suffering an employment crisis. In the remote, windswept state of North Dakota, job fairs often bustle with more recruiters than potential workers. The North Dakota unemployment rate hasn’t risen above five percent since 1987. In the state's oil country, unemployment hovers at around two percent, and pretty much everyone who wants a job—as long as they are old enough and not incarcerated—is employed. North Dakota has either tied for or had the lowest unemployment in the country since 2008.

The job base of the state (population 672,500) has grown five percent in the past two years. Even more astonishing, there are over 16,000 unfilled jobs, and projections indicate that 45,000 more workers will be needed in the next two years. Of those jobs, one out of three will be in oil and gas.

The Booming West

If you are willing to endure the blazing hot summers and bitterly cold winters, come to western North Dakota, young (or not) man (or woman) and you can get a job. Michael Ziesch has worked with Job Service of North Dakota for the past 15 years and is currently a manager in the Labor Market Information Center. “The average wage in oil and gas is $80,000 plus overtime, and there will likely be plenty of that,” said Ziesch. Development of the massive Bakken oil field in the western part of the state has tapped out the local workforce.

If you are not interested in an energy job, consider retail. Employers are paying $15 an hour for convenience store employees and fast food workers. Drive through any community in the area and you will be hard pressed to find a store front devoid of a sign shouting “Help Wanted, Now!” It seems that everything in the state these days ends with an exclamation mark, and for a state filled with unassuming, hardworking, family-centered kind of folks, it’s a little disconcerting.

New North Dakotans

Job seekers from outside the state are flocking to Williston, the unofficial capital of the oil boom, located in the remote northwestern corner of North Dakota. The population here has grown from 12,500 to an estimated 22,000 in the past five years.

Williston is home to 350 oil service companies. Willistonlife.com, an employment and informational website built with the objective of attracting workers to the area, boasts that at any given time, over 1,200 job openings are available in the Williston area alone. On its home page, the website beckons to the nation’s unemployed in large white letters brightly juxtaposed against a black background, “Make Your Move!”

The wildcat oil culture that the newly arrived encounter, though, is distinctly different than the risk-averse culture of the state. One “New North Dakotan” noted that although long-time residents of the state are pleasant (we smile a lot), helpful (there’s no better place to have a flat tire), kind (we’ll bring you a hot dish if you are sick), and polite (we almost always hold the door open for the person behind us), we are not quite “friendly.” We are a little guarded with folks we didn’t grow up with. Ethnic to us means Norwegian or German. We’re not used to accents other than our own. (And, no, we don’t talk like the actors in the movie Fargo.) One more thing — and this is important — we talk about the weather a lot.

What should you know before you throw your last $100 in your gas tank and head up to Williston to make cold calls for jobs? Don’t come without a housing plan, or you may find yourself among the hundreds of parking lot denizens, living out of your car.

New North Dakotans need places to live, creating an enormous construction boom. Williston formerly saw about five new homes a year. So far this year, 2,000 new homes have sprouted up. In 2012, the expectation is for 4,000 more along with apartments, hotels and, outside of town, dormitory-style housing facilities known as 'man camps'. According to the Williston Herald, since the boom began, the market price of rental housing in Williston has jumped from $300 to $2,000 per month for a modest apartment. Hotels are full and booked for months, charging $170 to $200 a night.

Service is hard to come by. Waits of 45 minutes or more are not uncommon at fast-food restaurants. The Dairy Queen closes at 5:00 pm because they can’t retain enough staff to stay open any later, and many small businesses have simply closed their doors for lack of employees. The town’s Wal-Mart doesn’t have enough employees to stock the shelves, so boxes are simply laid open in the middle of the aisles for customers to grab what they need. Locals have discovered a “secret route” into the store to avoid the worst of the incoming traffic, and even the local Luddites have managed to learn how to use the self-checkout lanes as a matter of self-preservation. A professor at Williston State College complained recently that she had to text her husband with a request to pick up clothes hangers while he was out of town visiting relatives because local stores were completely sold out. It’s not only hangers; long lines and low inventory have made running everyday errands a vexing challenge. “It sounds crazy,” this same professor says, “but I order laundry detergent online and have it delivered by UPS to my front door.”

At Williston State College, faculty often take out their own garbage to help out the strapped maintenance staff. The school is seeing lower enrollments as students are drawn away from post-secondary education by the lure of instant cash.

The law of supply and demand has kicked in across all sectors of the community. A severe shortage of contractors, plumbers and electricians means that homeowners wait weeks or even months for simple home projects. The local community college is putting out a second bid for a parking lot because, the first time, they didn’t get any bids at all.

Even more disturbing in Williston are rumors of impending electricity shortages. Worried about brownouts and blackouts during the long North Dakota winter, many townspeople have picked up generators in Fargo, where they sell for $700, compared to the “sale” price of $1300 in Williston.

Officials are quick to point out that the state’s larger cities, Bismarck and Fargo, are also thriving. In the Governor’s most recent State of the State address, he posited his explanation of 'The North Dakota Miracle': “It is about an educated workforce, low taxation, a friendly regulatory climate.” And if your state happens to be sitting atop 400 billion barrels of oil … hey, it can’t hurt.

Energy Economics: Boom and Bust

Oilmen have known for fifty years that beneath North Dakota's surface lay billions of barrels of oil, perhaps as much as 4 million barrels per square mile.

In 1952, The Wall Street Journal reported that Williston was receiving a “cornucopia of riches.” Banks were setting new deposit records weekly, and the population had jumped from 7,500 to 10,000. In the early 1980s, oil prices skyrocketed and the region again became an exploration target as its vast deposits became economically feasible to drill. When prices began to slip, hitting a low of $9 a barrel by 1986, the boom faltered and, even more quickly than it began, it was over. The state spent the later part of the 1990s trying to recover from a brutal bust.

Today, a perfect storm of two 21st century technologies, hydraulic fracturing and horizontal drilling, along with high prices and unprecedented demand, have come together to make drilling profitable, triggering a new boom that some experts say will be the biggest and longest lasting in the cycle of boom and bust. Conventional wisdom is that this time around the oil boom will be steadier and longer, because oil prices are no longer being defined by the cartels that once controlled the world’s oil prices and, therefore, the economics of energy. In the meantime, the oil pump jacks that dot the skyline are nodding their heads in greeting. Welcome to North Dakota.

Debora Dragseth, Ph.D. is professor of business at Dickinson State University in Dickinson, North Dakota.

Photo of Williston, ND traffic jam courtesy of Williston Department of Economic Development.

A Decade in College Degree Attainment

Aaron M. Renn — Sat, 01 Oct 2011 01:38:05 -0400

This week the Census Bureau released its 2010 data from the American Community Survey. The ACS is what contains many of the core demographic characteristics that are frequently opined upon, such as college degree attainment, commute times, etc.

It used to be that the Census Bureau collected this information during the decennial census using the so-called “long form” that went to one out of every ten households. But that was discontinued as of this census and has been replaced with with the ACS. The ACS reports data more frequently (annually for geographies larger than a certain size), but has a smaller sample size and so there’s lot of statistical noise that I don’t think we are used to dealing with yet. For example, in 2008 the Indianapolis metro area ranked #3 in the US for growth in college degree attainment over the course of the decade to date among metros greater than one million people. But in the 2010 data Indy ranked #28 on the same measure. There are fluctuations year to year and the margin of error needs to be accounted for in serious statistical analysis. Nevertheless, this is what we have to work with.

Metro area college degree attainment, 2010

I’m going to roll out a series of posts covering the highlights of some of this data. I’ll start with educational attainment, since that is something that is so key to upward social mobility and urban economic success.

But first I’ll put in a brief plug for my Telestrian tool. The Census Bureau site for distributing this data is a disaster. As one Brookings senior fellow put it, “Lots of Census data yesterday, today. Lots of angles, stories, conclusions. One shared sentiment: new American Factfinder is AWFUL” and “New Factfinder making mainframe punchcards look appealing.” Telestrian is designed for very rapid basic analysis and comparative benchmarking moreso than simple fact lookups (though it can do that do). In fact, I generated every table, graph and map in this post in ten total minutes with it. Even if you aren’t in the market for a commercial product, there’s a no credit card required free trial period, so if you are interested in perusing the ACS data and don’t want to beat your head against the wall with the Census Factfinder, I encourage you to check it out. Telestrian doesn’t have every data element, but it has a lot of interesting stuff.

College Degree Attainment

College degree attainment (the percentage of adults with a bachelors degree or higher), is one of the most critical factors in urban success. If you’d like to know more, just check out all the great research on it under the heading of “talent dividend” over at CEOs for Cities.

The map at the top of the post is 2010 college degree attainment for metro areas. Here are the top ten, among those with a population greater than one million, showing total number of people with degrees and the attainment percentage:

Row	Metro Area	2010
1	Washington-Arlington-Alexandria, DC-VA-MD-WV	1,758,297 (46.8%)
2	San Jose-Sunnyvale-Santa Clara, CA	558,519 (45.3%)
3	San Francisco-Oakland-Fremont, CA	1,317,354 (43.4%)
4	Boston-Cambridge-Quincy, MA-NH	1,335,276 (43.0%)
5	Raleigh-Cary, NC	301,012 (41.0%)
6	Austin-Round Rock-San Marcos, TX	429,163 (39.4%)
7	Denver-Aurora-Broomfield, CO	651,661 (38.2%)
8	Minneapolis-St. Paul-Bloomington, MN-WI	822,321 (37.9%)
9	Seattle-Tacoma-Bellevue, WA	867,193 (37.0%)
10	New York-Northern New Jersey-Long Island, NY-NJ-PA	4,613,445 (36.0%)

And here’s the bottom ten:

Row	Metro Area	2010
1	Riverside-San Bernardino-Ontario, CA	499,663 (19.5%)
2	Las Vegas-Paradise, NV	278,387 (21.6%)
3	Memphis, TN-MS-AR	209,987 (25.1%)
4	San Antonio-New Braunfels, TX	344,247 (25.4%)
5	Louisville/Jefferson County, KY-IN	224,392 (25.8%)
6	Tampa-St. Petersburg-Clearwater, FL	513,182 (26.2%)
7	Birmingham-Hoover, AL	198,856 (26.3%)
8	New Orleans-Metairie-Kenner, LA	209,916 (26.8%)
9	Jacksonville, FL	241,801 (26.9%)
10	Phoenix-Mesa-Glendale, AZ	731,643 (27.2%)

While we are on the topic, here is a map of college degree attainment by state:

State college degree attainment, 2010

And here is county level college degree attainment for those counties covered by the 1-year ACS:

County college degree attainment, 2010

Changes in College Degree Attainment

Beyond just the raw 2010 numbers, it’s interesting to look at which places are growing their college degree attainment the most. That is, which places are growing their talent base. So here’s a look at metros by their change in college degree attainment over the last decade:

Change in percentage of adults with college degrees, 2000-2010.

Some places already have very high college degree attainment, which can make it tougher to grow even higher. Speaking of which, the US as a whole raised its college degree attainment as well. To some extent, this is purely a function of demographics. Older generations have lower educational levels than younger ones. (None of my grandparents had a college degree, and my father’s parents never even finished high school. I don’t think that was atypical for their day).

What might be more interesting to look at is whether places are increasing their college degree attainment faster or slower than the US overall. There’s a measure that does capture that. It’s called location quotient, and is used in economic analysis to measure the concentration of industries in certain locations.

An economist told me once that he likes to look at this for all sorts of things, not just industry clusters. The formula works for other stuff. I really haven’t seen this used before, so caveat emptor, but here’s a look at shifts in location quotient for metro areas over the course of the decade:

Metro area change in location quotient for college degree attainment, 2000-2010. Increase in LQ in blue, decrease in red.

The blue metro areas had a higher concentration of college degrees relative to the nation as a whole in 2010 than they did in 2000. The red ones a lower concentration. This is certainly an interesting area for further exploration.

While I’m on the topic, here’s the same chart, only limited to graduate and professional degrees. There’s some interesting variability here.

Metro area change in location quotient for graduate and professional degree attainment, 2000-2010. Increase in LQ in blue, decrease in red.

A Closer Look at Indianapolis

Just as one more granular example, I wanted to take a look at the Indianapolis vertical. Here’s 2010 college degree attainment for the city, metro, state, and America as a whole:

College degree attainment, 2010

As we know, urban regions tend to be more highly educated. Here we see that while Indiana is one of the lowest states in terms of college degree attainment, the Indy metro area actually beats the US average. However, the city of Indianapolis falls short of the US average. Because Indy is a consolidated city-county government that includes a lot of inner ring suburban areas, it’s hard to draw conclusions about the true urban core, but it does seem clear that the center is less educated than the periphery of the metro.

Now lets look at the change in attainment for the decade:

Change in the percentage of adults with a college degree, 2000-2010.

Here we see that the rich get richer, as Indy metro not only started out on a higher base, but had the best showing in attainment growth as well. OTOH, going back to our LQ measure, Indiana actually boosted its LQ while the Indy region was stagnant. That’s because this is a percentage point change, not a percentage change, and growing from a low base makes it easier to boost LQ. It’s one of the quirks of that formula.

The poor showing of the city of Indianapolis is something that should definitely be worrying. It would be interesting to do a similar analysis for other metros, but alas that’s all for today.

Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile, where this piece originally appeared. Telestrian was used to analyze data and to create charts for this piece.