By Lydia DePillis
Joel Kotkin, the California-based Houston booster whose Center for Opportunity Urbanism sings the praises of sprawly cities, is out with a manifesto on the New Heartland, capital H: The belt of states running north from Minnesota and Ohio south to Texas and Florida. Everything, that is, besides the West, the Northeast, and the Mid-Atlantic.
The reason? Those states are historically America’s manufacturing, agricultural, and energy production centers. “While every region contributes to American prosperity, the New American Heartland has the potential to play an outsized role in powering economic growth in the twenty-first century,” reads the introduction to the report, co-authored by Michael Lind, a scholar at the New America think tank.
It’s a well-written argument, full of maps and statistics, and certainly will appeal to the sector of the population accustomed to railing against “coastal elites.” But it mischaracterizes the nation’s more important economic divide: Not between the the coast and the “heartland,” but rather between urban and rural areas. Whether in New York or Texas, metropolitan areas are pulling ahead of the vast exurban country that surrounds them.
As Kotkin’s report points out, places like Cleveland, Nashville, Kansas City, and of course Houston have attracted oodles of new companies and educated young people in recent years, rivaling the growth rates of tech boomtowns such as Seattle and San Francisco. But between all those hubs, in Wisconsin and Washington state alike, lie tiny towns where industry has left and agriculture no longer requires the large workforce it once did, as the Wall Street Journal recently explored at some length.
Economic development policy, therefore, would be better focused on bringing economic opportunity to those sparsely-populated areas — and helping people move to where it already exists.
Now, Kotkin is not wrong to advocate for a greater focus on what economists call the “traded” sector: production of goods for export. The Brookings Institution, a Washington think tank, has spent a lot of time researching advanced manufacturing, which incorporates enough technology to compete with countries where wages are lower. But for that very reason, it won’t be enough to rebuild the middle class, either in urban areas or across the rural expanse.
“With the coming waves of automation and productivity technology, not to mention continued right-to-work and the use of staffing companies, I worry about where broad, traded-sector prosperity will come from in these states,” says Mark Muro, policy director of Brookings’ Metropolitan Policy Program, after reviewing Kotkin’s report. “We need it badly, but even the most successful advanced manufacturing growth isn’t going to deliver a ton of jobs.”
Even energy production, which has generated thousands of well-paid jobs, is likely to require fewer people in the future, as companies devise ways to do the work without the inconvenience of constantly staffing up and down. (Which is why Kotkin is also unwise to take swipes at climate regulations, which could fuel new jobs in clean energy even as they slow the growth of fossil fuels.)
Where is economic growth going to come from?
Nobody has quite solved the mystery of where the jobs of the future will come from. In the face of that uncertainty, you could argue that the more important focus is making sure wherever new jobs come from, that they be stable and well-paid, rather than insecure and intermittent.
Meanwhile, Kotkin is also not wrong in his conclusion that the best way to foster growth is to invest in education and infrastructure, from airports to highways, rather than chasing new companies with tax breaks and subsidies. Offering incentives might lead to a few new factories, which could employ a few people in far-flung areas.
But better education and infrastructure — perhaps more focused on transit and renewable-friendly electricity grids — could be just as powerful in urban areas, which have already taken on natural momentum from coast to coast. Dynamic cities like New York and Seattle, currently choked by high housing prices, should open themselves up with faster construction and stronger policies to support affordable housing.
That way everybody can have access to a middle class life — wherever they consider the Heartland to be.
Lydia DePillis covers the economics of everything in Texas. Previously, she was a business reporter at the Washington Post, a tech reporter at The New Republic, and a real estate reporter at the Washington City Paper. She’s from Seattle.
This article first appeared in Houston Chronicle