Image via Pew Stateline
Pew Charitable Trusts recently posted an analysis of population projections that show several states with stagnant to declining workforces.
This means that for nearly 20 states, it’s basically impossible to add jobs in the future. How can you add more jobs with fewer workers?
That doesn’t mean there won’t be cyclical ups or downs or that some slack in the system might be taken up with some growth, but overall, stagnation to decline in jobs is going to follow.
Pew’s article mentions states fighting to retain a high skill labor force, but this doesn’t seem very likely. Most of these places are in the north and northeast and have been stagnant for a long time.
What’s going to change the migration of population to the South and West? While change is always possible, it’s not obvious what might cause it.
Cities and states need to think hard about what this means for them. It seems to me is that one effect will be to fuel intrastate divergence, as success pools into islands in an era of overall shrinkage. You can argue we’re already seeing this.
For most localities who aren’t among the favored winners, the reality is that they need to do what I advocated for Buffalo, and find a new psychology of civic improvement that isn’t rooted in growth – in population, jobs, or building stock. (I should add, Buffalo is in a far better position than most and could enjoy a relatively bright future – but it probably won’t be a big growth story)
This won’t be easy.
One of the great assumptions of the American worldview is the equating growth with success in our communities. Communities that are adding people, adding jobs, building new things, etc. are seen to be succeeding, whereas shrinking or stagnant ones must be failing.
Everybody believes this. Even those who talk about “growth without growth” or tout increasing per capita income as the real measure of economic development invariably tout growth if there’s a figure that shows it.
Lots of urbanists like to pooh-pooh Texas growth, but when 60,000 people move into downtown Chicago, or transit ridership soars in New York, or tech jobs explode in the Bay Area, they immediately tout and trumpet those figures as signs of success.
And good for them. The point is that we all view growth as the measure of success.
What would a new psychology look like?
One example would be the boutique model. Rather than trying to be bigger, you become more exclusive. This isn’t a model that’s applicable to these stagnant places however.
More realistically, these places need to focus on healing from or managing their problems (including managing decline in some places like rural communities). Some areas of focus:
- Pension and debt issues
- Environmental remediation
- Segregation
- Raising educational attainment (to high school at least), even if that means the people subsequently leave
- Infrastructure
- Restructuring core services to be sustainable
Not easy, and realistically requiring outside financial and technical assistance.
What’s more, this is a to do list, not a psychology of success. How can one begin to articulate a positive, affirmational view of a place’s future that captures some program like this?
Perhaps there are other ways to think about this too. Please share thoughts in the comments if you have them.
The key is that with a shrinking working age population, there’s little prospect of job growth. So any governor in one of these places who has that as a long term economic objective is bound to be frustrated. This is a reality that will have to be faced.
We’re in the middle of this. Our city is a “high growth” (for our region) suburb of Detroit that has excellent schools, good location, and desirable demographics. We’re rebounding well from the economic downturn and property values are bouncing back to pre-recession levels in many parts of the city. But we’re in the middle of the Metro Detroit MSA which peaked in population in 1970. While the population levels for the region haven’t seen the precipitous decline that Detroit has experienced, relative to population centers in the south and west, the region is falling further and further behind on all the traditional metrics.
In the region, we’re seeing a micro version of the “island effect” you’re describing. People who want an urban experience are migrating to downtown Detroit (Gilbertville) or Ann Arbor or Birmingham, for those who want less grit and better services. Several of the suburbs continue to ride the new development wave cashing in on those who want new housing. But in between, there’s a large swath of Detroit that’s in serious decline and both inner-ring suburbs and rural areas that continue to experience population decline. In a region that is stagnant, the areas of growth are largely at the expense of everyone else.
But there’s still a lot of denial of the position we’re in both locally and in the region. Many people think that it’s Detroit that’s struggling and that everyone else is OK, as if the region can succeed without Detroit. Or they think that because our community is doing well today, that trend will never end. But when the new development cycle ends, what then (Ponzi scheme anyone)? How is our community positioned for the long-term when we can’t entice people with new subdivisions and new retail centers?
They seem to miss the fact that being #1 in a stagnant or declining region isn’t exactly a position of strength. We’re blessed in that we don’t have to deal with many of the ills that plague cities like Detroit and we’re not saddled with all the legacy costs that some of our neighboring cities have. But even cities like ours are going to have to figure out how to be relevant long-term and more so being located in a region that hasn’t figured out how to break out of it’s pattern of stagnation for the past 40 years.
While I don’t disagree with a lot your points here, Aaron, I do think it’s a little defeatist. These cities should be lobbying their states hard to make their regulatory and tax environments more competitive with high-growth states. And here’s another out-of-the-box thought: if you agree a good moral purpose is maximizing overall human flourishing, and you also agree that a lot of the world’s talent is languishing in countries under systems that doesn’t let that talent reach its full potential, then there’s an argument to be made for a special immigration program to bring international talent, energy, entrepreneurship, and – ultimately – an expanded tax base to these cities. Even 2nd and 3rd tier areas of America are far better environments than much of the world. And maybe individual cities can build relationships with specific countries to build a critical mass community of those country’s immigrants in their city? (all sending remunerations back to their home country families, I might add, so it’s a win-win) But they’d have to recognize their situation and group together to push anything through Congress – a tough road for sure.
I agree that immigration is probably what would save some US cities…and Social Security, for that matter. We need only look at Japan to see what happens when a relatively advanced industrial society ages without replacing worker-consumers.
I’ve got to take issue with the idea that there’s too much regulation and too-high taxes in the US, and that cutting them further will lead to some kind of economic miracle. People are still moving to California.
If low taxes and laissez-faire regulation really produced economic miracles, people would be (comparatively) flocking to Kansas and Indiana as much as to California and New York, and they’re not.
While Kansas and Indiana appear to be doing somewhat better than most of their Midwestern and Upper South/Border State neighbors, Minnesota is doing even better…with more progressive policies.
Chris: Being “in the field” I would still agree that a cold eye turned to (some) taxes and (some) regulations is always appropriate, but I agree with you.
I love Aaron’s work, but the Manhattan Institute ties mean that we will always get people who think that THE answer is always deregulation and cutting taxes. 🙂
Another issue is quality of workforce.
http://blogs.edweek.org/ edweek/top_performers/2016/01/ the_low-wage_strategy_ continues_in_the_south_is_it_ the_future_for_your_state.html
The Low-Wage Strategy in the South: Is It the Future for Your State?