A decade ago, urban economist Paul Gottlieb coined a term for this disconnect between population and economic growth. He called it "growth without growth," a construct former Ventura Mayor Bill Fulton has picked up on in recent writings. When Gottlieb compared population growth to growth in real per-capita income in the 100 largest U.S. metropolitan areas, he found a pattern similar to what we discovered for states. Like states, U.S. metros divided into four categories. Some -- like Atlanta, Austin, and Dallas -- were above the national average in both categories. Others, including many older Rustbelt metros, were below average in both. But it's the last two categories that were more interesting. Much as we found with states, half of the 100 largest metros divided into "population magnets" -- places where population grew but not income, and "wealth builders," where incomes rose much faster than population.
Rust Belt cities such as Pittsburgh build wealth while losing population. Yet we give the declining numbers all the headlines. That's a result of outdated economic development paradigms for a geography from long ago:
When Marja M. Winters was studying urban planning in graduate school, she learned the art and science of helping cities grow.Now Ms. Winters, a native of Detroit and the deputy director of the city’s planning and development department, finds herself in an utterly unexpected role, one that no school would have thought to prepare her for: she is sorting out how to help her hometown shrink, by working through difficult decisions that will determine which neighborhoods can be saved and which cannot.“It was always this notion that the population of the world continues to grow, and more and more people want to live in cities,” Ms. Winters, 33, said about her courses at the University of Michigan. “The reality is very different. Who knew?”
A city with a growing population is a winning city. This framework is killing Detroit. Little did we know that the urban core was already succeeding at attracting a very desirable demographic:
Even in Detroit, where the population shrank by 25% since 2000, downtown added 2,000 young and educated residents during that time, up 59% , according to analysis of Census data by Impresa Inc., an economic consulting firm.
The absolute numbers are small, but brain gain is brain gain. Our theories about economic development haven't kept up with the changing demographics:
The single largest increase was among Hispanics, whose birthrates are far above those of non-Hispanic whites, largely because the white population is aging and proportionally has fewer women in their child-bearing years. The median age of whites is 41, compared with 27 for Hispanics, the report said.
"Fewer women in their child-bearing years" defines just about any shrinking Rust Belt city. But that doesn't mean a neighborhood is doomed. Women with higher levels of education tend to have less children. They are also excellent wealth builders and could help stabilize a troubled city such as Detroit.
As you will find in Pittsburgh, the educational attainment rate of the workforce is going up along with the numbers of the total workforce. All this is happening while the population has been going down. As I wrote yesterday, Pittsburgh is projected to be an economic boomtown over the next 15-years. Do the population numbers even matter?
The same goes for the migration numbers. I'll return to my second favorite Bill Testa post to demonstrate what I mean:
A closer look below reveals that the Chicago metropolitan area has attracted both the highly educated and the less educated. The share of Chicago’s foreign born who hold a college degree is below the U.S. average. In contrast, in the remaining metropolitan areas of the Midwest, the foreign born population includes a greater share holding at least a bachelor’s degree in 2007. According to sample data from the U.S. Census Bureau, an incredible 50 percent of Pittsburgh’s working age population who were foreign born hold at least bachelor’s degree. Detroit, Cincinnati, St. Louis, and Columbus are not far behind.
While Pittsburgh would benefit from more immigrants, the current small flow has packed a powerful economic punch. Rust Belt cities don't need to boost inmigration so much as they need to strategically channel these existing flows to specified targets. Detroit's prescribed triage approach would dovetail well with this migration strategy, which is much more in line with the demographic realities of today.