Tuesday, March 11th, 2014
[ Today Chuck Eckenstahler looks back at the unfulfilled promises of Benton Harbor, MI being declared metropolitan – Aaron. ]
It’s called the “Benton Harbor Rule”, a hard fought change spearheaded by now Congressman Upton and local leaders to obtain metropolitan status in 1980.
Back in the mid-1970′s, Berrien County Michigan, local governments and the Twin Cities Chamber of Commerce (predecessor to Cornerstone Chamber Services) identified the value of being recognized as “being metropolitan rather than rural”.
They identified the immediate opportunity to access as much as $1.8 million (1970’s dollars) of new federal and state funding that could only be obtained by “being metropolitan” for road improvements, bus transit, health and other social services. They estimated the designation would yield a $12-14 million dollar impact to the local economy.
To access these potential funds, they undertook a multi-year effort to change Federal Office of Management and Budget policy prohibiting Berrien County from ever being considered metropolitan.
Successful lobbing changed the rules for the 1980 Census creating, 9 new Metropolitan Areas like Benton Harbor-St. Joseph lacking a central city of 25,000 population in a concentrated urban area having a population of 50,000 or more, in a county having a population of 100,000 or more. This change modified the minimum sized “single city” criteria for determination of a “demographic dominate central city” requirement for federal metropolitan designation purposes.
Economic Development Advantages Identified
In the 1970’s being “metropolitan” meant more than increased state and federal money, according to the supporters. “Metropolitan” meant growth – increasing population and prosperity.
Business seeking to locate understood “metropolitan” to be a better place for new investment – both industry needing workers and retailers needing customers for success.
On the contrary, being a rural area meant the area didn’t quite make the grade for certain businesses especially the rapid growth of emerging fast food franchises and location of regional shopping malls.
The recruitment of these new businesses was a major goal of Chamber of Commerce visionaries who sponsored a nonprofit owned industrial park as a place for new industry to locate and create jobs. Back then there were no regional shopping malls and residents did a lot of their shopping in Kalamazoo, South Bend and Michigan City. It was believed the “metropolitan” designation would contribute to the redevelopment of Benton Harbor and the growth of communities throughout the county”.
Anyway, it just didn’t make sense that the home of several national firms such as, Auto Specialties, Leco Corporation, Tyler Refrigeration, Clark Equipment and Whirlpool would not reside in a growing metropolitan location.
Measuring the Impact of Metropolitan Designation
Today many wonder – was this successful? Did the change in federal policy truly make a difference?
Three decades later one measurement – population growth – can be used to gauge whether the legacy of this effort achieved results.
The adjoining table contains data for 8 of the 9 new MSA’s designated in 1980 due to the “Benton Harbor Rule”. The other has been merged into a consolidated MSA, a newer federal designation describing larger population centers, eliminating decade-to-decade data comparison.
This data reveals population of the Benton Harbor/St. Joseph MSA did not grow to the same extent as other comparative MSA’s created in 1980 – being a population loss of 8.4% compared to a 35.2% growth in population over the past three decades.
Where the average total comparative metropolitan growth rate in each decade ranged between 7-17%, the Benton Harbor St. Joseph MSA lost population twice between 1980 and 1990 and again between 2000 and 2010. The MSA only had marginal 0.7% population growth between 1980 and 1990.
Obviously, the legacy of the authors of the Benton Harbor Rule, raises questions – why and what happened to the well intentioned efforts to stimulate growth.
The logical questions based on the data include – Why didn’t the Benton Harbor-St. Joseph MSA achieve similar growth? Shouldn’t the population have grown in a similar fashion as the other MSA’s – at least at the average rate? What social, political and economic impediments arose to limit population growth?
Many credit the demise of the auto industry, the off-shoring of manufacturing jobs and globalization of business as impediment to population growth. Others mention Michigan’s unfavorable business climate as a cause.
There certainly some truth in each statement. However closer to home, the more appropriate question might be – are there local impediments that hampered population growth?
Economic Geography and Realities of “Place”
The following offers a few thoughts on social and political barriers that might cause the lack of population growth:
The “Friday Night” social identity of Southwestern Michigan where small town high school sports define the community is a barrier to multi-community collaboration and cooperation. It limits the ability of local government and customer trade areas to form and strengthen economic clusters of businesses to maintain economic marketability necessary to sustain small local business that once supplied the small town community shopping experience.
Paralysis of Political Geography
In place of economic consideration which should inspire cooperation there is paralysis, the inability to shed “political boundary binders” that maintain the historic political geography that may, in some cases limit the scale of economics necessary for retail business sustainability and the delivery efficient government services.
Cognitive “Place” Realism
Without a doubt, economic markets of Berrien County today are different compared to 1975 when efforts to create a demographic dominate metropolitan central city composed of smaller individual communities was first initiated. Individual mental mapping of the actual area of influence of the Niles and Benton Harbor – St. Joseph shopping areas shows customers pay little attention in which local government the actual shopping is done. This mental cognitive mapping discloses three major retail markets, Benton Harbor – St. Joseph, Niles – connected to South Bend and Harbor Country – connected to Michigan City.
This pattern creates a rather isolated St. Joseph – Benton Harbor metropolitan market area surrounded by two (or three) market areas influenced by more dominate regional competitors having a population approximating 70,000 people with a somewhat lackluster future growth trend.
Ethnic and Cultural Diversity Polarization
Modern metropolitan community development theory has identified “social capital” as a key to economic prosperity in a global market. This is especially important for international businesses who recruit globally for management talent. Academic researchers have documented communities who richly embrace ethnic, cultural, religion and gender differences that increase social interaction among a wide spectrum of people tend to have increased population growth resulting in greater economic prosperity.
Academic research also discloses communities with “less tolerance for differences” lag behind both in community population growth and employment growth by firms serving global markets; leading to the question of adequacy of inclusionary and tolerance tendency of the metropolitan area.
Questionable Externally Communicated Metropolitan Identity
A metropolitan area identity, or its “good name”, is formed in people’s minds by repeated exposure – being the accumulated knowledge they acquire from varied sources (news media, marketing publicity, testimonials, etc.) and their personal experiences resulting in a positive, negative or neutral image. To often this image is one that leaders prefer not to address or address by issuing cheerleader statements or other auditory claims promising a personal experience that cannot be kept. A positive metropolitan identity and image is a message designed to attract attention and then follow with support services that fulfill the expected experiences.
The decision to visit or invest in a “place” is based on faith and trust because “customers” are purchasing an intangible personal asset. The logical question for any metropolitan area is – Do we offer a “good name” identity and image?
“Metropolitan” As a Determinant of Future Growth
Post-recession public policy has reinstated the importance of “metropolitan areas” in Michigan’s economic development policy.
Academics and political leaders extol the virtue of economic advantages of Michigan’s metropolitan areas. They are assembling new legislation and administrative policy to direct public and private investment to Michigan’s “core community” metropolitan areas.
From a public policy perspective this makes logical sense. Young people gravitate to metropolitan areas due to job opportunities metropolitan areas generate, the greatest number of new business formations occur in metropolitan areas, metropolitan areas tend to have higher per household incomes for their residents, and metropolitan areas attract higher value real estate investment that enhance the local government tax base.
A recent Brookings Institution analysis confirms this statement, where their research documents that in 47 of the 50 states, metropolitan areas generate the majority of the states’ gross economic output. They report in 2009, the St. Joseph – Benton Harbor Metropolitan area accounted for $5,620,000,000 (1.5%) of Michigan’s gross economic output (See: Brookings Institution Metropolitan Policy Program – Metropolitan Area and the Next Economy and New Economy State Profiles).
Brookings advocates a “metro-led vision” for the future since they have “distinct assets and market strength to grow quality jobs and provide statewide prosperity”. They also note that metropolitan areas have:
1. In 30 states (including Michigan) the most innovative and educated workers,
3. Generate the majority of internationally exported goods and services, and
4. Host 89% of the working-aged people with post-secondary degrees.
All in all, Michigan’s strategy to define and focus government economic development attention to metropolitan “core communities” areas having greatest economic development impact is a reasonable and prudent “statewide” public policy. Michigan’s future hinges on performance of its metropolitan urban “core communities” hosting innovative firms, educated workers and critical infrastructure.
The Importance of “Geographic Place Identity”
Michigan’s newly forming metropolitan focused economic development public policy direction again draws attention on the importance of “metropolitan” and its impact on future growth of the Niles – Benton Harbor – St. Joseph Metropolitan Statistical Area.
Future community growth success is about understanding residents and, in the case of southwestern Michigan, to a lesser extent, seasonal residents and the occasional visitor. Population growth, especially well-educated workers is paramount to participation in the next wave of U.S. economic growth.
They say history repeats itself and again today – the term “metropolitan” once again communicates a sense of vitality and future prosperity.
In the eyes of the world a “metropolitan geographic brand identifier trumps a rural territorial identifier”.
This post originally appeared in Chuck Eckenstahler’s blog on February 27, 2014.