Monday, August 27, 2012

Regional Economic Development Goals

Increasing population should not be a goal. Population is one of many metrics regions can use to see how they are doing. In and of itself, a rise in population is not necessarily a good thing. Thus, I'm disappointed when I read blurb such as the following in the news:

Businesses and nonprofit groups are mounting a renewed effort to restore Pittsburgh's luster as a magnet for immigrants, a move intended to increase population and make the region a more vibrant place.

I'm not sure if businesses and nonprofit groups are explicitly seeking a population increase and more vibrancy. Vibrancy is like population increases. It is an indicator, not a policy goal. Thomas Frank took, among others, Vibrant Pittsburgh to task:

Your hometown is probably vibrant, too. Every city is either vibrant these days or is working on a plan to attain vibrancy soon. The reason is simple: a city isn’t successful— isn’t even a city, really—unless it can lay claim to being “vibrant.” Vibrancy is so universally desirable, so totemic in its powers, that even though we aren’t sure what the word means, we know the quality it designates must be cultivated. The vibrant, we believe, is what makes certain cities flourish. The absence of vibrancy, by contrast, is what allows the diseases of depopulation and blight to set in.

Population increases and vibrancy have taken on normative qualities. Initiatives designed to stop the brain drain often state population increase as a goal. Such growth is an economic effect, not a cause. The same is true for vibrancy. More than anyone else, Richard Florida has popularized this backwards thinking. Be a cool city so your population goes up and downtown is more vibrant. Tolerance and diversity comprise a silver bullet. Chris Briem (Null Space) has a post about why such misperceptions matter:

I saw the story boards for the Border Guard Bob production being toured around and the projected ad buy I remember clearly as being touted was going to be ~$8mil and that was nearly 15 years ago.  Real money and the real cost was not the $$ but the self-defeating message it gave to ourselves... and let's not even ponder what fun the world might have had with it all.  It was a pre-sarcastic age (no Colbert) so it may not have been so bad. 

Population decline meant all the young people were leaving. This supposed exodus, simply not true statistically speaking, is the muse for Richard Florida's Creative Class enterprise:

Over the years, I have seen the community try just about everything possible to remake itself so as to attract and retain talented young people, and I was personally involved in many of these efforts. Pittsburgh has launched a multitude of programs to diversify the region's economy away from heavy industry into high technology. It has rebuilt its downtown virtually from scratch, invested in a new airport, and developed a massive new sports complex for the Pirates and the Steelers. But nothing, it seemed, could stem the tide of people and new companies leaving the region.

I asked the young man with the spiked hair why he was going to a smaller city in the middle of Texas, a place with a small airport and no professional sports teams, without a major symphony, ballet, opera, or art museum comparable to Pittsburgh's. The company is excellent, he told me. There are also terrific people and the work is challenging. But the clincher, he said, is that, "It's in Austin!" There are lots of young people, he went on to explain, and a tremendous amount to do: a thriving music scene, ethnic and cultural diversity, fabulous outdoor recreation, and great nightlife. Though he had several good job offers from Pittsburgh high-tech firms and knew the city well, he said he felt the city lacked the lifestyle options, cultural diversity, and tolerant attitude that would make it attractive to him. As he summed it up: "How would I fit in here?"

This young man and his lifestyle proclivities represent a profound new force in the economy and life of America. He is a member of what I call the creative class: a fast-growing, highly educated, and well-paid segment of the workforce on whose efforts corporate profits and economic growth increasingly depend. Members of the creative class do a wide variety of work in a wide variety of industries---from technology to entertainment, journalism to finance, high-end manufacturing to the arts. They do not consciously think of themselves as a class. Yet they share a common ethos that values creativity, individuality, difference, and merit.

Politicians still line up to gulp down this snake oil. Population decline! Brain drain! We must be more vibrant! A few anecdotes does not a trend make. Pittsburgh's young adults were not leaving for Austin in droves. There wasn't a Creative Class crisis. On the contrary, Pittsburgh was on the cusp of a boom. Florida couldn't see it. He was too busy preying upon local anxiety.


The Urbanophile said...

Well, when you are championing a city that's shrinking, naturally you pooh-pooh population growth, but I think cities that lack significant in-migration are broken in a fundamental way. At a minimum, if not population growth, some type of indication of dynamism (other than a decline in your median age driven by old people dying faster than babies are being born) is important. If you are running a "boomtown" with dirt cheap housing but nobody is moving there in the worst economy since the great depression, that certainly is curious.

Jim Russell said...

Well, when you are championing a city that's shrinking, naturally you pooh-pooh population growth, but I think cities that lack significant in-migration are broken in a fundamental way.

A city can have population growth and lack significant inmigration. If you are championing a city with robust population growth, of course you promote that narrative. Never mind that the total labor force is shrinking. Forget the dramatic increase in poverty (see "booming" Reading, PA). Declining educational attainment rates? No problem. More people means a better place.

I've made the case that the inmigration numbers are a better indicator to track than population. I'd go further and look at the geography of the sources of inmigration. But the population numbers in and of themselves are lousy indicators. Worse is making population increase a goal. That demonstrates a poor grasp of demographic data.

The Urbanophile said...


BrianTH said...

There is at least one way in which population growth actually matters, which is in how it affects the relevant markets' ability to attract long-term capital investment. A variety of capital investors look at population projections (usually among other things) when calculating the expected return on possible projects, and a shrinking population in the relevant market may make some possible projects uncompetitive.

I don't think there is any reason to get hysterical about this, and in fact I think there can be a serious problem on the other side of the spectrum, when population growth outstrips the local maximum rate for important capital projects of various sorts.

But I do think that you don't want to be too far for too long from the normal range of population growth among your peer/competitor economic units (e.g., in the case of Pittsburgh, slow but positive population growth would likely be adequate to keep it competitive among its peers for capital investments).

Jim Russell said...

My point isn't that population growth doesn't matter. It does matter. The issue is using population growth as a policy end game. Population growth to what end? Talent retention to what end?

Think about why having more people living downtown is a good thing. That's the policy end game. You might be able to achieve your goals in other ways, not just population growth.