Heartland Intelligence: America's New Rust Belt Demographics (20.2)

Feb 5

In this issue: welcome to the Rust Belt, America - high income households - educational divergence

Thanks to your positive responses, I’ve decided to more forward with rebooting my monthly newsletter as Heartland Intelligence. This will be a unique research briefing on the Heartland and beyond with key context you need to know during this critical election year in which the Heartland will decide the presidency.

I’ve moved to Substack as my publishing platform. All existing subscribers have been added to the free tier. In April, the main newsletter will become paid only at $5/month. If you previously pledged or want to subscribe, do so here.

A brief free version will continue to be available to everyone.

Highlights of my work last month:

My Atlantic op-ed on Columbus, Indiana and its patron J. Irwin Miller.
My Manhattan Institute study on superstar cities.
I was quoted in this great NYT article by Emily Badger: “Is South Bend a Prosperous College Town or a Struggling Rust Belt City?”
My review of Lee Bey’s fantastic book Southern Exposure: The Overlooked Architecture of Chicago’s South Side.

Heartland Studies

A Vital Midwest: The Path to a New Prosperity (John Austin from the Chicago Council on Global Affairs)
Between the Great Migration and a Growing Exodus: The Future of Black Chicago? (UIC Institute for Research on Race and Public Policy)
Greater Ohio Policy Center: From Akron to Zanesville, How Are Ohio’s Small and Mid-Sized Legacy Cities Faring? (see January 2020 update)

America’s Demographics Are Rust Belt Demographics

As America’s birth rate continues to fall, much of the country starts resembling the Rust Belt, with an aging population and structural demographic stagnation or decline. Richey Piiparinen in Crain’s Cleveland argues for new thinking about civic success:

Demographic decline is already creating a new normal in the U.S. A recent EIG report showed that 80% of American counties lost prime working age (25-54) adults from 2007 to 2017. Also, last year was the first time in the nation's history that its three largest metropolitan areas — Los Angeles, Chicago and New York — all lost population in the same year. So, America, welcome to the Rust Belt, a region that is arguably the first collection of big cities in America's short history that has "died." And by "die" I mean losing total population and doing so consistently, year after year. It's thus the first collection of cities that's had to do more with less, which helps explain the comparative trends elucidated above between the Sun Belt and the Rust Belt. This is not because of any superiority in values, per se, but rather a productivity play borne out of need. Any Rust Belt optimism has been burned into realism some time back. But — as noted by Colin Lloyd of the American Institute of Economic Research — demographic decline, while inevitable, "if approached as opportunity, can be a blessing rather than a curse." The future of growth, then, is exactly that. It will not be recreated by gluing back the vestiges of the 20th century. It will be principled on the production of well-being, not its consumption. On quality of life, not the quantity of lives.

Piiparinen makes a good case, but undersells the challenges of population decline. With many costs fixed, especially at the municipal level, and so much outside aid apportioned by population, decline produces fiscal distress in government and downward pressure on housing values that causes disinvestment and abandonment. See “The Economics of Population” in Pittsburgh Quarterly. These militate against improving quality of life. And, if quality of life becomes clearly superior in a particular locale, that will tend to attract people.

However, what do you do when growth is difficult or impossible? Cities like Cleveland and Pittsburgh have decline baked into the numbers from events of decades past. Chicago and Pittsburgh are both losing population, but this does not tell the complete story. Cities successfully transitioning past a demographic disruption may misleadingly measure poorly on traditional growth measures for quite some time.

Focusing on growth where growth is highly unlikely is not productive. Buffalo advocates want to add 100,000 new residents. That’s very unlikely. For places with severe economic and demographic challenges, focusing on the basics that improves quality of life for existing residents is a better option: fix the municipal finances, reform governance, and focus on improving public good and services.

Piiparinen is right that for much of America, traditional growth metrics are not the best ones to target in the near to medium term. A new vision of civic success not rooted in traditional quantitive growth is required.

High Income Households

The back to the city movement is happening at some level even in some traditional “rust belt” central cities. Here is a chart of the total number of households earning $200,000 or more per year in six of them.

And here is a chart of the share of households at that income level in those same cities.

Note the clustering of these cities into two groups. Pittsburgh, Cincinnati, and St. Louis are clearly outperforming Milwaukee, Cleveland, and Detroit. The latter city has seen far less of a high income influx than generally perceived. Pittsburgh, by contrast, has data backing its reputation as a resurgent city.

Note: Gap in data availability between 2000 and 2006.

Where Are the Highly Educated Going?

A revealing graphic (click if it does not display for you) from Purdue University on the geographic divergence in college degree attainment

Related: Frederick Guy compares concentrations of high wage job in 1980:

Versus 2016:

Note: These are cartogram maps of commuting zones scaled by population.

Heartland Culture

Patti Waldmeir/Financial Times: I Heart the Heartlands

But for journalists like me, there is still the problem of portraying the Midwest without either romanticizing or belittling it. When I tried to capture the color of a county fair in Wisconsin recently, by writing about its deep-fried Oreos and pulled-pork ‘sundaes’, more than one reader thought I was sneering. In fact, I adore all the improbable foods that can be bought deep-fried at a Midwest fair, and would gorge myself on them happily were I not diabetic. It’s hard always to get the tone right.

Buffalo News: 2020s will be the Buffalo Decade in Food, after last 10 years set the stage

Chicago Mag: When Ron May Ruled Chicago’s Tech Scene

WBEZ: Are Chicagoans True Midwesterners? - Some Chicagoans deeply desire to disassociate their city from its region. Impossible and reflective of local denials of reality that inhibit needed adapations.

Belt: The legacy of a multiracial community on Indianapolis’s south side

NYT: Kansas City Confusion: We’re Not in Kansas Anymore. Or Are We?

Daniel Hertz observes of St. Louis: “STL has this very peculiar combination of a) eastern materials and stylistic vocabulary, b) very Chicago-ish tightly detached spacing, and c) very non-Chicago but very midwestern inclined front lawns”

NYT: Is South Bend a Prosperous College Town or a Struggling Rust Belt City?

Joseph Molnar of South Bend says, “Growing up in the shadow of failed glory, being told - by everyone - that the past was better than the present, implants something on your psyche.”

City Lab: When Memphis Fell for a Pyramid Scheme

Heartland Economy and News

Axios: J.D. Vance launches VC fund for startups beyond Silicon Valley. But see in the FT: Venture capital for the ‘forgotten’. Vance, as a perceived future GOP star (possible US Senator), was able to raise capital and should find it easy to participate in hot Series A deals other regional VC firms might be frozen out of.

NYT: What the Rebirth of This Old Steel Center Means for Trump - “The Lehigh Valley rebuilt its economy after foreign competition wiped out its mills. Now good times and bad memories may both help the president.”

Charles McElwee: The Lehigh Valley Became A Bellwether For Trump

NYT: The Graying of the American Economy Is On Display in Iowa

Iowa is now one of 27 where the population under 60 is declining while the population over 60 is growing. Like elsewhere in the nation, Iowa’s aging population poses an economic headwind. The wave of retirees saps savings, shifting spending to health services and shrinking the labor force. The young people who remain in the state are increasingly concentrated in a handful of cities. In the Des Moines metropolitan area, the population is growing at all age levels.

Richard Longworth: Two Midwests, the old and new

NYT: How Private Equity Buried Payless - “It didn’t matter how great you were in your field or what other stuff you had done, it was, ‘You live in Kansas, so you’re an idiot.’”

ProPublica: They Were Promised Broadband and High-Tech Jobs. They’re Still Waiting - “Kentucky’s plan to bring broadband to remote parts of the state has sputtered and its future looks increasingly bleak. State leaders told rural residents it would create better business opportunities. But instead, they keep getting left behind.”

Heartland Cities

Akron Beacon Journal: Horrigan asks for patience in second term as Akron mayor

Belt: How Did Alleged Ukrainian Money Launderers Buy Up Downtown Cleveland?

Neo Trans: Cleveland ended the decade with a boom, and it's showing

Kevin Williams: I Don’t Love Columbus Because I Can’t Participate In It

Pete Saunders: Segregation: One Of Detroit’s Biggest Imports

Curbed Detroit: How the Morouns became Detroit’s least trustworthy billionaire family

NYT: Detroit’s Revival Is Anchored in Its Train Station

Detroit News: Detroit homeowners overtaxed $600 million

Detroit News: Detroiters pay too much for economic development deals

Detroit News: GM picks Lordstown, Ohio site for $2.3 billion battery plant

Indy Star: Indianapolis housing market is 'weird' and 'strange.' Prices also are surging.

Public Source Pittsburgh: When better isn’t good enough - Why I tell my Google co-workers and industry peers to avoid Pittsburgh

TAC: Why Pittsburgh Is A Planner’s Dream And Nightmare

Pittsburgh City Paper: Pittsburgh has a lot of flipped homes recently. What does that mean for the region?

Pittsburgh City Paper: A Monessen Elegy - “The political struggles and controversy of managing a declining Rust Belt town”

NYT: This Town Is Known For Opioids: Can It Escape That Image? - Portsmouth, Ohio

St. Louis Mag: This is where St. Louis City went wrong after the 1930 census

Heartland Transportation and Infrastructure

Curbed Chicago: Visionary plan to cap the Kennedy Expressway with a park might still happen

Cleveland Plain Dealer: Red Line Greenway trail shows great promise, despite ugly duckling start

City Lab: Turning a Vast, Post-Industrial Wilderness Into a Park in Pittsburgh

Click On Detroit: Metro Detroit regional transit initiative announced for 2020

Before we move beyond the heartland, don’t forgot to sign up as a paid subscriber if you haven’t already:

Culture

NYT: Who Signs Up to Fight? Makeup of U.S. Recruits Shows Glaring Disparity - “More and more, new recruits come from the same small number of counties and are the children of old recruits.” It’s not healthy if our military becomes populated by a hereditary caste.

London Review of Books: A global history of mescaline

Economy

Bloomberg: Behind Amazon’s HQ2 Fiasco: Jeff Bezos Was Jealous of Elon Musk

When Elon Musk secured $1.3 billion from Nevada in 2014 to open a gigantic battery plant, Jeff Bezos noticed. In meetings, the Amazon.com Inc. chief expressed envy for how Musk had pitted five Western states against one another in a bidding war for thousands of manufacturing jobs; he wondered why Amazon was okay with accepting comparatively trifling incentives. It was a theme Bezos returned to often, according to four people privy to his thinking. Then in 2017, an Amazon executive sent around a congratulatory email lauding his team for landing $40 million in government incentives to build a $1.5 billion air hub near Cincinnati. The paltry sum irked Bezos, the people say, and made him even more determined to try something new.

The Atlantic: Silicon Valley Abandons the Culture That Made It the Envy of the World - “Once upon a time, in the notorious start-up cradle, small was beautiful.”

Lyman Stone: The Demographic Hurricane Makes Landfall

NYT: A Maine Paper Mill’s Unexpected Savior: China

International

The New Yorker: The Future of America’s Contest with China

FT: Berlin rent freeze shakes foundations of city's construction sector - “Landlords have stopped all major building work, plunging tradesmen such as bricklayers, plumbers and electricians into crisis. ‘They’ve basically stopped doing everything but emergency repairs,’ she said. ‘You’re seeing the first cancellations, with investments originally planned for this year declining dramatically . . . and order backlogs shrinking fast.’”

Urbanism

Neal Peirce, who essentially invented modern urban journalism, passed away at the end of December. William Fulton shares his reflections. I was fortunate to meet Peirce in person once, but we didn’t have much interaction. My impression is that the younger generation of urbanist writers did not necessarily know him or his work all that much. But in essence he created the market in which all of them worked.

In another major loss to urban journalism, the Guardian Cities project, which I was honored to have been a contributor to, has closed after six years.

Nature Human Behavior: Complex economic activities concentrate in large cities

Tyler Cowen: Urban Growth and Its Implications

City Lab: What ‘Livability’ Looks Like for Black Women

Plough: Cities for Children

NYT: The Myth of the Urban Boomer

City Lab: In the 1980s, Every City Needed a Science Center

Denver Infill: 2010s Decade Residential Development Summary

NYRB: How New York Is Zoning Out the Human-Scale City

The Guardian: Abandoned stores, empty homes: why San Francisco's economic boom looks like a crisis

FT: Silicon Valley reinvents Victorianism (free article)