Monday, January 24, 2011

Portland Struggling

What talent dividend? In Portland, per capita income is headed in the wrong direction. In terms of growth, Portland is well behind Rust Belt Cleveland and Pittsburgh. Wendell Cox provides the analysis:

However, perhaps the biggest surprise is the metropolitan area that slipped into the number two position between Baltimore and Washington. The Pittsburgh metropolitan area, which may have faced the most severe economic challenges of any major metropolitan area over the past 40 years, achieved per capita personal income growth of 8.2 percent. The Pittsburgh gain is all the more significant in view of the local financing difficulties which placed the city of Pittsburgh in the near equivalent of bankruptcy under Pennsylvania's Act 47. However, as is the case in on number of metropolitan areas, the central city has become much less dominant and no longer seals the fate of the larger metropolitan area. Today, the city of Pittsburgh accounts for only 15 percent of the metropolitan area population. ...

... All of the remaining bottom 10 positions were occupied by metropolitan areas that have developed a reputation for strong growth. Tampa St. Petersburg ranked 6th worst, with a per capita income loss of 3.3 percent. Portland (Oregon) ranked 7th worst with a personal income loss of 2.5 percent. Riverside San Bernardino, with the lowest per capita income ranking out of the 28 metropolitan areas, ranked 8th worst with a per capita income drop of 2.2 percent.

The numbers are surprising because we incorrectly associate metro success with population gains and inmigration. No doubt that Portland attracts talent. But the dividend is missing. What is wrong?


The connection between income, earning power and vitality on one hand and educational attainment on the other is one of the strongest relationships that we have to work with. Census data for 2006-08 show that nearly 80 percent of the variation in per capita income levels across the 50 largest metro areas is explained by differences in the share of adults with a bachelor's degree or higher. If other cities have higher incomes, it's because they have better educated populations.

Over the last few years, Portland has been a choice destination for college educated migrants. That suggests that the metro does a lousy job of educating its residents. Is Portland spending too much on cool urban amenities? At the very least, the declining per capita income casts a shadow on the Portland model. Staying weird is coming at a steep price.

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