Thursday, May 27, 2010

How Reason Doomed Cleveland

Perhaps you have heard. Cleveland's City Council has invited libertarian evangelists Drew Carey and Nick Gillespie to come make a pitch about economically revitalizing the region. An honest outsider's look at Rust Belt troubles should be welcome. But Gillespie doesn't understand why former manufacturing giants are now struggling:

From 1990 to 1993, I lived in Buffalo, a city eerily similar to Cleveland, differing chiefly in scale. (It’s about half the size.) As I packed up to leave Buffalo for Los Angeles, there was a mayoral debate in which a Republican candidate, a Democratic candidate, and an independent candidate outlined their plans for revitalization. The first respondent (I forget which, but it hardly matters) said he would go to the state capital and fight for the city’s fair share of tax money. The second one said he would go to Albany and also Washington, D.C., and fight for the city’s fair share of tax money. The third candidate, the eventual winner, upped the ante by saying he’d go to Albany and Washington and fight for more than the city’s fair share of tax money. Is it any wonder that during the 1990s, a decade in which many cities turned around years of population declines, Buffalo was one of only two entire major metropolitan areas that lost people? (The other was Pittsburgh, a long-slumping town inaccurately but repeatedly praised for a comeback that is suspiciously devoid of economic or population growth.)

I'll admit that the jab at the Pittsburgh hype got my attention. One shouldn't dismiss praise because the population numbers look bad. However, I will concede the point about sluggish economic growth and add that Gillespie should put that observation in its proper context. The bone I have to pick concerns the suggested cause of population decline.

Analysts make too much of population numbers. Does Gillespie really think suckling at the public teat has anything to do with demographic replacement rates? Even if he does observe a link, policy changes will take a long time to show results.

The point of contention is migration. Immigration is a red herring. Plenty of unReasonable places attract a lot of immigrants:

The foreign-born share of Michigan’s population rose from 3.8 percent in 1990 to 5.3 percent in 2000, to 6.1 percent in 2007, according to the U.S. Census Bureau. In 2007, Michigan was home to more than 600,000 immigrants. And roughly 47 percent of them are naturalized U.S. citizens who are eligible to vote, notes the Immigration Policy Center in its September 2009 report, “New Immigrants in the Great Lakes State.”

Latinos, Asians and Arab Americans account for a large and growing share of the economy and electorate of Michigan. Census data reveal that 6.4 percent of Michiganders are Latino or Asian. The Latino share of Michigan’s population grew 4 percent in 2007. The Asian share grew 2.4 percent the same year.

Michigan also has the highest proportion of Arab Americans in the nation and is home to some of the world’s largest populations of Albanian, Macedonian, Lebanese, Iraqi and Yemeni immigrants.

Shrinking government and liberalizing tax regimes won't attract more immigrants. That's not to say that Cleveland shouldn't seek to grow the foreign-born population. Just the folks at Reason don't offer a way forward.

That leaves domestic migration and the "vote with your feet" narrative for Cleveland to consider. The population boom of the 1990s that Gillespie references is deceiving. Among the top-25 largest cities, the biggest losers during that decade in order:

  1. New York City
  2. Los Angeles
  3. Chicago
  4. Philadelphia
  5. Detroit
  6. San Francisco
  7. Boston
  8. San Diego
  9. Washington, DC
  10. Cleveland
  11. Pittsburgh
  12. St. Louis
  13. Baltimore

More than half of the largest cities shrank in terms of domestic migration. People have "vamoosed" from many cities that Reason thinks are doing much better than Cleveland. Gillespie fails to distinguish net outmigration from population decline. He plays fast and loose with the facts and gains a forum with Cleveland City Council. It's both a sham and a shame. Thanks for nothing, Drew Carey. Cleveland doesn't need another brain drain boondoggle. However, local politicians will welcome the distraction.


Stephen Gross said...

It occurs to me: maybe policymakers jump on board with pseudo-science brain drain narrative because they *personally* cannot understand why someone would emigrate from their region. That is, their inability to understand emigrants' motives makes them easy prey for over-simplistic brain drain policies.

Jim Russell said...

Actually, the libertarian narrative argues that big government and too much taxation pushes out talent. The biggest brain drain boondoggles tend to come from Republicans.

Stephen Gross said...

Well, Republicans are nothing if not ideological thinkers. They have reached their conclusion ("Smaller government! Lower taxes!") and they fashion their policy arguments to support that conclusion regardless of the policy subject of interest.

However, my point is that urban policymakers cannot imagine why anyone would ever want to leave their Dear City. As a result, they can't objectively evaluate policies that claim to affect in- and out-migration.

John Morris said...

I have to agree that the four part Reason piece on Cleveland was just not a serious effort at building a real debate and believe me, I think they have points to make.

If Drew and Reason want to open up a study center in Cleveland and spend lots of time and effort there, it would go a long way.

Jim Russell said...

However, my point is that urban policymakers cannot imagine why anyone would ever want to leave their Dear City.

I think most policymakers overestimate talent outmigration. The fear is that everyone is leaving. There's an irrational attachment to native sons and daughters. I find policymakers to be self-conscious about their Dear City. Everything must be wrong. Downtown isn't cool enough. Graduates don't know enough about opportunities. There aren't enough jobs.

But for some young adults, the grass is always greener no matter how much money you pay Next Generation Consulting or Reason.

Stephen Gross said...

Ok, this makes sense. If I may paraphrase, your point is this: "Migration is a fact of life. Rather than focusing on why people leave, ask why people move in". Have I got it right?

In that case, the psychological challenge that policymakers face is rather steep: They have to imagine why an *outsider* would pick their city over others. That requires imagining and understanding the point of view of outsiders.

Jim Russell said...

Yes, you have it right. For example, consider Boston and Pittsburgh. Both deal with talent outmigration. But Boston has much better talent inmigration. What about all those young adults around the country looking for greener grass? Boston is on the map. Pittsburgh isn't.

Stephen Gross said...

So why do people pick one relocation place over another?

Well, if we're talking about the generic "recent college grads" category, I think the reasons are usually well-understood:

* Lively cultural scene
* Good jobs prospects
* Existing social network
* Easy transportation network

Note that I did not include:
* Municipal tax structure
* Housing affordability

What am I forgetting? (I guess you could write several tomes on the subject!)


Jim Russell said...

Jobs will attract people from beyond the pale. The federal government labs in and around Boulder brought in a lot of talent that otherwise wouldn't have had the first clue about the Front Range of Colorado. Universities and colleges also work in a similar fashion, but attract the wrong demographic cohort (those least likely to stay). The rest can be explained as [social] network migration.

Unknown said...

Jim, you make a great point about Boston. I went to school in Boston (well, not in Boston, but nearby. No, not Tufts), and I don't ever remember hearing lamentations about how college graduates were leaving the city in droves, even though every year, they were. Now, in Pittsburgh, it seems to be a common complaint, particularly from older folks - about how the city can't support its graduates, about how they all move out of state, etc., even though 90% of CMU undergrads are from outside of PA.

Jim Russell said...

Speaking of Boston, a good story about brain drain there. The comments from the graduates are hilarious. Also, check out Alicia Sasser's research on New England talent migration.