Saturday, April 25th, 2009

Midwest Miscellany

The Christian Science Monitor running a piece on which cities will recover first from the recession (hat tip Return to Pittsburgh). Here is their map:

In tabular form, the cities I cover (by year of recovery, then alphabetic) and the year they are expected to reach their old peak employment levels:

  • 2009-2010 – Indianapolis
  • 2011 – Columbus
  • 2012 – Chicago
  • 2012 – Cincinnati
  • 2012 – Kansas City
  • 2012 – Twin Cities
  • 2013-2014 – Louisville
  • 2013-2014 – Milwaukee
  • 2013-2014 – St. Louis
  • Post 2014- Cleveland
  • Post 2014 – Detroit

Charlotte debates whether newcomers are a burden or boon. In the short run, the influx of newcomers has really driven up unemployment. In the long term, it is probably good. Here’s an interesting quote:

“Two years ago, James and Cynthia Kwolyk put their Connecticut home on the market. Their goal: Move to Charlotte with its milder weather and nearby relatives.

“Then their house sat, waiting for a buyer. The family still moved – even though the house didn’t sell for 11/2 years, and they had to drop the price $100,000.

“Charlotte owes much of its prosperity to newcomers willing to pull up stakes and gamble on opportunity here.”

Again, how many people do you know that have pulled up stakes and moved to a Midwest city in search of opportunity? That’s the aspiration they should have, however. Until your town is seen as an opportunity city, a place people will decide to plant their flag and seek their fortune without some pre-existing connection, then it isn’t truly a healthy or thriving place.

It looks like Flint, Michigan is signing on to the shrinkage program. Big coverage in the New York Times. Thanks to a reader for sending me this one. “Dozens of proposals have been floated over the years to slow this city’s endless decline. Now another idea is gaining support: speed it up. Instead of waiting for houses to become abandoned and then pulling them down, local leaders are talking about demolishing entire blocks and even whole neighborhoods.”

This is adopting the Youngstown strategy. This has to be part of the equation for a number of struggling manufacturing cities, including some big ones like Detroit. I would love to see the federal government put some money behind this. Shrinking your fixed cost base is incredibly difficult and painful. Scale works miracles on the way up – and on the way down. I think in return for abandoning the pretense of renewed growth and signing onto an aggressive shrinkage program to put a city back on a sustainable path, the feds should be willing to help fund the change program.

On a related note, Richard Longworth speaks in Muncie of how small Midwestern cities are dying.

The Wall Street Journal had a great article this week called “Spain’s Bullet Trains Change a Nation – and Fast“. It is must reading. I am no fan of boondoggles. There are any number of projects I’ve argued against on this blog, including, for example, light rail in smaller cities. But I think we ought to take a hard look at high speed in the Midwest. For my thoughts, please see my “High Speed Rail” posting.

Can high speed rail be justified purely on an income statement basis? No. There is no way it will ever pay its capital and operating costs. But you know what, I think it is debatable whether or not passenger rail ever made money in the US, even back in the 19th century. Heck, rail period often had major government backing, such as federal land concessions. Would we have been better off as a country without it? I don’t think so. I think there are opportunities in the Midwest to link smaller cities with Chicago to potentially enable some game changing applications. There’s no slam dunk on it, but it certainly warrants serious study.

President Obama has made HSR a signature element of his transportation program. However, I have a big fear that a Midwest “high speed” system will in fact be just warmed over conventional rail at 110MPH. Amtrak on steroids if you will. It is certainly not the system in Spain, which I have personally ridden and which is fantastic. I am very concerned that an inferior system labeled as “high speed” will only end up ruining the high speed rail in the United States.

Travel dip slams midsized airports. This affects a number of Midwest cities.

Richard Morrill over at New Geography does some interesting graphs of tax burden by state.

Richard Layman talks about transit and travel demand management.

Rem Koolhaas calls this the “end of a period“.

Congrats to Renee over at Feed Me Drink Me for her profile in the Indianapolis Star. She urges diners to demand excellence. Forget food for a minute, there’s a huge lesson in her prescription for the whole Midwest.

The Atlantic Monthly runs an unflattering story about Kansas City’s new arena.

And here’s a hilarious fake sign (not in Chicago, but via the CTA Tattler):

Presumably a commentary on the MTA “doomsday” in New York.

More Midwest

Chicago
Stimulus money paying for Chicago subway repairs (Tribune)
Madigan out to kill RTA? (Greg Hinz @ Crain’s)

Cincinnati
Top CVG job vacant six months (Enquirer)

Columbus
No money, so work stops on I-71 (Dispatch)
Nobody Home (Dispatch)

Detroit
College of Creative Studies gambles $136 million on Argonaut Building (Detroit News)
Auto storms my sink Michigan (Nolan Finley @ Detroit News)

Indianapolis
Is inadequate management Indiana’s problem? (Morton Marcus)

Kansas City
Long time director at Nelson-Atkins Museum to retire (KC Star)

Louisville
No recession in Louisville (backstage.com)
Louisville plays waiting game for top retail stores (C-J)

Twin Cities
Block ‘E’ might stand for ‘emptier’ (Star-Tribune via a reader in Indianapolis)

12 Comments
Topics: Economic Development, Talent Attraction, Transportation

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12 Responses to “Midwest Miscellany”

  1. Alon Levy says:

    The CS Monitor article doesn’t say anything about where the estimates of when metro areas will recover come from, or why they are trustworthy. Right now economists are divided about when the US as a whole will recover – the more optimistic ones say it will return to growth later this year and recover to peak employment in 2010, the more pessimistic ones predict a long-term depression.

  2. Alon Levy says:

    Also re: the study, the article doesn’t make it clear whether it defines pre-recession employment based on absolute number of jobs, or based on employment rate. I strongly suspect it uses the former, judging by the fact that the fastest-growing metro areas are all projected to be back on their feet early, even those that were hit really hard by the recession, such as the Inland Empire and Las Vegas.

  3. Jefferey says:

    Good points by Alon. I was curious about how they defined peak employment, too.

  4. Deuteronomy says:

    As is always the case, your “Midwest Miscellany” offers myriad opportunities for insightful discussion, yet (no doubt to my own disadvantage) I continue to dwell on a single paragraph: the reference to Longworth and Muncie. I was unfamiliar with Longworth prior to your postings, and I wish I had time to write more, but this continued negative focus on the Midwest has become a bugaboo of mine, largely because it assumes a pessimistic and almost solipsistic view of the region as bearing the brunt of deindustrialization and associated decline. I’m hardly the most well-traveled individual (both domestic and internationally) but I’ve lived in New England, the Mid-Atlantic, the Midwest, and the Deep South within the past three years, and many of the second- and third-tier municipalities in these regions remain just as stagnant. Demographic and BLS studies only corroborate what empirical observations suggest.

    New England has a definitive capital in Boston much the way Chicago has retained a secure foothold as the capital of the Midwest. But where does that leave other cities in Massachusetts? Lawrence, New Bedford, Fall River, Lynn, and Brockton share much of the same malaise as Muncie–and all are within the Boston Combined Statistical Area. The state’s larger, second-tier cities, such as Springfield and Worcester, are faring no better (Springfield in particular is in bad shape). Connecticut and Rhode Island have there fair share of underperforming old mill towns as well. New Jersey, frequently the richest state in the country, does not have a single true city that is the economic engine for a vibrant region.

    The South continues to boast of its economic awakening, but for every Charlotte, Nashville, Raleigh, and Atlanta are a host of dying second- and third-tier cities. I wish Longworth would look at Alexandria or Monroe LA, Gadsden AL, Columbus Georgia, Pine Bluff AR, Greenville MS, Goldsboro and High Point NC–or even the bigger cities such as Memphis and Birmingham (or my current home of New Orleans) and continue to assert that the knowledge economy continues disproportionately to pass the Midwest by. The poorest second-tier cities in Indiana (such as Marion) have poverty levels on par with what is the status quo for a comparable Southern city. Even the younger, booming West has its economic laggards: cities such as Great Falls MT, Santa Cruz CA, or a host of third-tier cities in otherwise robust economy of Texas (Wichita Falls, Beaumont, Abilene).

    Conversely, every region has some municipalities that defy every odd. Here in the south, Tupelo MS is hanging on quite comfortably despite being the epicenter of a slumping furniture industry. I’ve never visited the city, but Dothan AL appears from my research to be managing quite well despite being far removed from any federal interstate system. In Indiana, we have Lafayette, Bloomington, and Columbus, each a boasting well-educated work force, as well as smaller cities such as Valparaiso and Warsaw which are doing quite well.

    I’m sure the regional scholarship in New York agonizes to determine how to improve the fortunes of upstate, just as I know Pennsylvania struggles to devise strategies so that even one of its metro areas is on par with national growth patterns. But Longworth exemplifies a pattern of dwelling on the Midwest as the epicenter of economic stagnancy, which I think is unfair to the region. (E.g., metro Muncie’s population loss in recent years has paled in comparison to Pine Bluff AR, Danville VA, Ocean City NJ, or large cities such as Buffalo and Pittsburgh.)

    What, then, if any, are the differences that allow Longworth to disproportionately denigrate the Midwest? Beyond rote repetition of demographics and statistics, what do the numbers mean? Midwest factory towns remain predominantly white, with a blue-collar workforce only trained for the industries that are hemorrhaging from the region. In New England and New Jersey, among the biggest differences is that housing costs are onerous in all but the dying mill towns, which end up receiving a preponderance of the unskilled (often Hispanic or Asian in MA; Hispanic and AfAm in NJ) immigrants, leaving them trapped in decaying urban pockets surrounding by affluence. In the South, the towns’ workforce was often unskilled even by blue-collar standards, leaving the poorest Southern third-tier cities (such as Greenville MS or Gadsden AL) with minority populations at 60% to 80% of the total and poverty rates 2x to 3x higher than those struggling cities in the Midwest.

    The most damning statistics I feel are those that show Indiana, Ohio and Michigan losing their footing as among the wealthier industrial northern states. Indiana’s median income is among the slowest growing in the country; Ohio’s is on par and Michigan’s is worse. Perhaps that is what Longworth is getting at, and his book ostensibly scrutinizes these phenomena at a broader, statewide level than this brief article targeting the Ball State community. But I still think the tenor of his argument smacks of a class condescension (i.e., the moribund economies of the Midwest are more shameful than those of the Northeast and South because these dying small cities are populated mostly by white people). Does Longworth believe Midwest cities like Muncie are more likely to devolve to “backwaters” because their population is predominantly white and native born? Is white poverty that much more distasteful and therefore unworthy of sympathy? I would love for him and his academic peers to expand their Weltanschauung beyond the Midwest to see that nearly all states are dealing with seemingly intractable problems in at least a handful of their cities.

  5. thundermutt says:

    Frankly, I’m tired of the oft-repeated canard that income growth in Indiana is below the national mean.

    So what? Our cost of living, on the same national basket of goods, is 85-90% of the national mean. Housing, the biggest chunk, is cheap.

    It’s not income, but what it buys that determines the consumption aspect of “quality of life”.

    The “slow wage growth” statistic could merely “prove” (in an economic argument) that our wages on a purchasing-power basis were probably too high for a long time in Indiana, and that we are regressing to the national mean.

  6. The Urbanophile says:

    Deuteronomy, Longworth can defend himself, but I’ll add a few words. If you haven’t read his book, I suggest you do so. It would add some important context.

    I don’t think he’d deny the struggle other regions are having. However, he argues that one difference is that places like New England, the South, etc. have a self-conscious region-wide identity and indeed regional institutions looking at their problems from a regional perspective. The Midwest, by contrast, really doesn’t have that identity. States and such struggle with problems, but don’t even know what’s going on in the next state, much less around the world. Plus, I think he’d say, and I’d agree with him, that many places are either in denial or lack full awareness of what is happening to them in the context of the global economy. He focuses on the Midwest because he is trying to foster the emergence of a common view of the problem region-wide, and to promote cross-regional collaboration to address them.

    thunder, I don’t agree with Morton Marcus on everything, but his data based arguments that Indiana is falling behind from an income perspective ring true to me. Indianapolis might be a different story, but I think the rest of the state has seen a significant erosion in even purchasing power based income.

  7. Alon Levy says:

    New England may have regional planning, but are its small towns faring better than those of the Midwest? Are the deindustrialized towns of Upstate New York, which are betting the farm on high-speed rail to New York City (essentially, the same development strategy as in Ohio), acting more rationally than those of the Midwest?

  8. Anonymous says:

    A cool graphic/timeline of metro job situation since 2004: http://tipstrategies.com/archive/geography-of-jobs/

  9. Deuteronomy says:

    Thanks for your responses, one and all.

    Alon Levy, I appreciate your rebuttal: having lived in New England, the South, and the Mid-Atlantic I can attest that they have plenty of second- and third-tier cities that are fairing no better than those in the Midwest. Massachusetts’ towns may be more racially diverse–thereby making them less “backwater” I guess–but they still suffer from intractable and largely isolated poverty with high unemployment levels. Pennsylvania’s second tier towns are just as homogeneous as Indiana’s, but they are much, much older. Nearly a third of Johnstown or Altoona consists of retired citizens. I’m not sure yet whether regional thinking is helping the New England towns, and Pennsylvania struggles to forge its identity–the origin of its nickname “The Keystone State”–as an uncomfortable bridge between the Midwest and the East Coast.

    That said, I also appreciate Thundermutt’s comment that income growth in Indiana being behind the national average is a canard; my concern that the defense of the state’s low standing (that our cost of living is low) could also be a canard. In the 1970s, Indiana was on par with the nation’s mean; was the state’s cost of living at that point also on par with the nation’s mean? If so, perhaps Thundermutt is right and Indiana has simply become a state where transaction costs have declined in relation to the nation as a whole. If however, Indiana was still a low-cost-of-living state 40 years ago, then these figures that show Indiana’s slow income growth would only suggest that the purchasing power of Hoosiers has declined–that while our cost of living has remained low, our incomes have remained even lower. It would seem as though no state would ever strive to be below-average in income growth. Iowa has recently experienced a surge in income growth (no doubt displacing Indiana’s ranking); has the cost of living in Iowa increased proportionately?

    I don’t know the answer to this, but perhaps someone more informed in these matters can correct me if I’m wrong.

    Perhaps I will need finally to crack open Longworth’s book–you’ve convinced me, Urbanophile.

  10. thundermutt says:

    My point on income: if you pick Indiana’s all-time high-water mark in wages OR purchasing power as your starting point, it’s a distorted picture.

    It’s distorted by the historically disproportionate power of the USW and UAW and other Big Labor 40-50 years ago. That power arose in that era, unchecked by significant competition for the big enterprises within the US.

    Then came Honda and Toyota.

    The world has changed, and the day of high manufacturing wages in Indiana (and Indianapolis) is gone. Except perhaps in auto racing and its support operations, the one thing we’re “world class” in.

  11. Jake formerly of the LP says:

    In the 2008 NSP plans the feds did set aside money where cities could use demolition and reprogramming as an option for abandoned and foreclosed housing (a version of the Youngstown idea).

    In another urban topic, the Wisconsin Joint Finance Committee just approved of a bill that would allow for a Milwaukee County Regional Transit Authority, as well as a separate authority for the Kenosha-Racine-Milwaukee commuter rail line.
    http://www.jsonline.com/news/statepolitics/44125027.html

    Given that the City of Milwaukee has no local income tax and no local sales tax (only 0.5% for the County and 0.1% for the Brewers stadium), this could be a very helpful revenue source in a city that sorely needs it.

    I was told about this blog last week, and it’s really good. I’ll chime in from the North with what’s going on here.

  12. The Urbanophile says:

    Jake, thanks for chiming in. I need to write more about Milwaukee. I’m planning to head up there one nice weekend this month or next and hopefully impose on some locals for a guided tour of some of the great in-town development.

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