Sunday, June 01, 2008

Post-Rust

In an attempt to shake the Rust Belt image, many shrinking cities are developing post-rust belt mythologies. Step 1 is pointing out the misconceptions of outsiders:

This is not your father's rust belt. Picture America's old urban economic heartland, and Milwaukee is one of those cities that spring to mind. Mention Milwaukee and, quick, what images appear? Maybe "Laverne and Shirley" and "Happy Days," frozen custard, sausage and beer. Residents themselves dredge these up, only they sigh at how hard it has been to shake off the clich├ęs. After all, even "Laverne and Shirley" moved to Southern California. Thankfully, frozen custard remains, but most of the breweries and food processors have long since disappeared. Although long earmarked for development, the Pabst Brewery is a lifeless hulk on top of a hill. SABMiller plc, which operates the last of the big breweries, is threatening to take its headquarters south on I-94 to Chicago after its merger with Molson Coors Brewing Co. closes later this year. Even Harley-Davidson Inc., another symbol of old Milwaukee, is laying off workers.

Step 2 is distancing your city from all the other economic failures, reinventing the image:

But Milwaukee is far from a badly aging artifact. This is no Detroit, or even Pittsburgh. Many neighborhoods are picturesque and inviting. Its downtown, if not exactly teeming, is blossoming. It's an easy place to maneuver, say residents, comfortable and a good place to raise kids, despite Wisconsin winters.

Step 3 is mining the mythology of the recent past, revealing the true character of your comeback city:

Inside a low-slung industrial building south of Milwaukee's airport, Jeffrey Kober points to a stack of yellowish-brown panels, each about the size of and thickness of a sheet of three-quarter-inch plywood. "This is our reason for existence," he declares. "It sounds like a simple thing. You'd think making this kind of flooring is no big deal, but it is."

Kober, 55, heads Milwaukee Composites Inc., which manufactures composite resin flooring used in mass transit. The product is about half the weight of traditional bus and train flooring and is waterproof and fire resistant.

Its clients include subway systems and trains not only in New York, New Jersey, Denver and Philadelphia, but in Beijing. In a world supposedly ruled by the migration of manufacturing to low-cost labor centers, Milwaukee Composites doesn't just successfully compete with China, it exports there.

This last bit deserves some explanation. That manufacturing would be at the heart of the Rust Belt renaissance is a commonly cited irony. However, manufacturing never really left the Postindustrial Heartland. Businesses restructured, doing more with much less labor. But the jobs remaining in the region demand greater education. Richard Longworth, in his book "Caught in the Middle," describes how manufacturing and agribusiness are now more knowledge economy than industrial relic.

My concern is that in an attempt to remake the image of shrinking cities, new life is breathed into the Rust Belt mythologies the mega-region is desperately trying to dispel. There is considerable disjuncture between the perception of what is going on in the Rust Belt and the actual baseline. And that's among insiders.

The best example of this phenomenon is brain drain anxiety. The exodus of human capital, like the collapse of low-skill industrial jobs, is yesterday's news. Yet the focus is still on who is leaving:

In the heyday of American manufacturing, Michigan, with its good-paying factory jobs, was at or near the top of states in personal income. That ended around 2000, [Lou Glazer (president and co-founder of the Michigan Future Inc.)] said. Hmm, didn't we have a recession starting about then? Or was that a tectonic shift in the state economy?

The wealthiest parts of the country now are those with the highest percentage of college graduates -- Connecticut, Massachusetts, New Jersey, New York.

"The places with the greatest concentration of talent win," Glazer said. "And smart people tend to be mobile. Watch where they go. Robust economic activity will follow."

Right now, Michigan is watching too many of them go away.

Some will always be leaving, no matter what shape the state economy. That's just what young people do, and it's the right time to do it.

Right now, Michigan isn't attracting enough of them. Young people can and do move, just not to the Rust Belt. Connecticut is also concerned about brain drain. Where do UConn graduates go? I doubt Michigan rates as a destination. If Michigan is starved for talent, as the article indicates, then promote the opportunities at other state universities. I suspect that this option isn't palatable because business doesn't want to pay the wages needed to attract recent graduates to cities outside of the usual destinations. Keeping someone instate who wants to stay is the cheaper option.

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