Tuesday, January 03, 2012

Zero-Sum Regionalism

Looming on Pittsburgh's horizon is a migration boom. The bulk of Southwestern Pennsylvania's gain will be Washington, DC's loss. More on that in a bit. Projecting migration is a lot like economic forecasting. Past is prologue:

Still, the application of economic theory should be able to help us avoid the commonplace error of simply assuming that the future will be like the past, that after 18 months of sluggish growth we’re due for sluggish growth to continue. The conventional wisdom is that the relatively strong growth in the fourth quarter was a false dawn, and the economy is destined to stall out. This is mistaken. Some tragic unforeseen disaster could hit us, but if it doesn’t we should be in for a string of increasingly strong quarters and accelerating growth that put us back on the path to full employment.

There is an economic theory of migration, as Chris Briem (Null Space) often reminds us. The pressure is to move from a region of high unemployment to one of low unemployment. With that in mind, we would expect people in Detroit to move to Pittsburgh. But there are other metros competing for the economically distressed. Why go to Pittsburgh instead of Dallas? A number of places are doing relatively better than Detroit. Given past patterns, somewhere in the Sun Belt would seem to be a more likely destination.

I think about how the dominant migration patterns might change and what that might mean for Rust Belt cities, typically domestic migration losers. If there is already a strong link between Detroit and Dallas, then Pittsburgh doesn't stand to gain much from its stronger job market. We go where we know.

When Pittsburgh natives leave home, you can be reasonably sure that DC is at or near the top of the list for preferred destinations. The two regions are strongly linked. For at least a few decades, Greater Washington has been doing much better than Southwestern PA. The end is nigh:

It’s been a wonderful ride, not just for the past 10 years but the past 20, and it has helped make ours one of the richest regions in the country. Which makes it all the more painful to have to inform you that it’s about to come to an end.

Any reasonable scenario for the future would surely project federal spending on salaries and procurement to grow very little, if at all. Given the region’s lopsided reliance on those types of federal spending, it’s a pretty good bet that the regional Washington economy will grow slower than the rest of the country for an extended period of time.

The reversal is unlikely to begin this year or even next — there’s a lot of built-in momentum to federal contracting and employment. Nor will we really know the extent of the federal pullback until several months after the coming election. Even the anticipation of a slowdown, however, is bound to have a self-fulfilling impact. It’s time — indeed, it’s past time — for the Washington region to begin thinking about its next act.

Emphasis added. The next act for the Washington region is Pittsburgh. While the regional Washington economy grows slower than the rest of the country, pressure will build up to leave. We go where we know and a large number of people living in Greater Washington know Pittsburgh. The trickle from Detroit is a tsunami from Northern Virginia.

I've learned from Texas that inmigration is a stimulus for economic growth. If the numbers are strong enough, a positive feedback loop is started and a temporary relocation becomes an established migration pattern. Pittsburgh will boom. That's my bet.

What's up with the title of this blog post? ("Zero-Sum Regionalism") I contend that Pittsburgh-DC is a functioning megapolitan region. The talent migration between the two metros is much more important for Pittsburgh than the churn with Cleveland. The "Steel Corridor" is merely the happenstance of sprawl. Look at this map published today at The Atlantic Cities. There's a significant gap between the Steel Corridor and the "Chesapeake" part of the East Coast megalopolis. Thar be mountains getting in the way of an urban corridor.

That Cumberland gap isn't as significant as it looks. I'll let Richard Florida explain:

Part of Washington DC’s resurgence is not just that it’s a government town and has AOL high-tech. DC in a very real way has become a suburb of New York. And a lot of the media and broadcast — NPR functions that are there, XM Radio, many of the documentary film producers, many of the writers for The New York Times — have actually relocated [to DC] because of the affordability and connectivity.

Emphasis added. As DC is to NYC, Pittsburgh is to Greater Washington. The distance is deceptive. The more important variable is connectivity. That's how I would define a megapolitan, metros linked by talent. And the balance of the talent trade doesn't matter. DC's resurgence is Pittsburgh's resurgence.

Regionalism is defined by its ability to solve a zero-sum thinking problem. Suburbs boom while the urban core busts. What if we merged the two into one region? But the issues holding back a city do not magically disappear. You might abate a fiscal crisis by reshuffling the burden. The fundamental weaknesses remain.

Don't fret about those parochial burbs, Pittsburgh. Focus on your connectivity with DC. Let the brain drain work its magic.

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