Best Cities

The Next American Cities, a New Report from Urban Reform Insitute

Charles Blain — Fri, 14 Jan 2022 20:28:58 -0500

The urban form has shifted throughout history. This has been critical to its success. Today we are on the cusp of another transition, ushered in by new technologies and changing demographics, and accelerated by a devastating pandemic. Although these forces affect all geographies, the best chance of success and growth lies in what we define as The Next American City.

This newly released report from Urban Reform Institute examines the places that offer opportunity for a revitalized American Dream for more citizens. The introduction is excerpted below:

Can cities withstand the social, economic, and migratory challenges they face today, or will a new model prove to be the answer for Americans seeking better opportunities for their families? Cities will continue to thrive, but they seem politically and economically not well-suited for middle- and working-class families of all races.

The Next American City offers an answer to the problem plaguing those living in and around major cities. Offering a combination of affordability, amenities, and proximity to the large cities, but without the burdensome, heavy-handed regulations of local government or many of the social ills running rampant in our cities, these places – like the Woodlands and Bridgeland – are quickly shaping up to be the urban destinations of the future.

The locale of places of opportunity for new citizens and minorities have changed. The pandemic has led to people seeking more space which has driven the cost of housing. Couple that with the issues of crime, blight, cost of living, and standard of living in our large cities, it’s no surprise that the urban cores are beginning to dwindle and that homeownership rates in the suburbs far outpace that of the cities.

These Next American Cities provide opportunities that many families thought were long gone.

America needs a revitalization of what was the American Dream. The desires remain the same, opportunity, affordability, and safety. What we need are more communities that address that aspiration.

After visiting burgeoning communities across the country, interviewing industry experts and residents, and looking at data, we came up with the Next American City concept. Places that offer everything, and more, that our major cities do, but minimize the downsides. As Americans continue to seek out new, affordable, safe alternatives to the status quo, New American Cities could become centers of growth — if they do not fall prey to the policies and politics that have driven people away from urban cores.

View/download the full report here

Charles Blain, CEO of Urban Reform Institute, has focused on free market solutions to urban issues and creating opportunity for all in America's metropolitan areas. Charles has been published in The Wall Street Journal, the Houston Chronicle, The Hill, and Wired. Originally from New Jersey, he lives in Houston, and serves on the boards of Prison Entrepreneurship Program, Good Policy Society, and Texas Families First. In 2021, Charles was appointed to a 4-year term to the Texas State Committee to the U.S. Commission on Civil Rights.

Inclusive 'Placemaking' Leads to Civic Renewal

Cullum Clark — Fri, 30 Jul 2021 20:28:58 -0400

Cities across America are working to build more inclusive economies. A good way to start is by creating neighborhoods that are great places to live, work, and play, and are accessible, affordable, and welcoming to as many people as possible.

Principles of inclusive placemaking

The great urbanist Jane Jacobs articulated key principles of inclusive placemaking in her 1961 book The Death and Life of Great American Cities, which remains as timely today as it was 60 years ago.

Above all, Jacobs argued, cities should create neighborhoods where a range of residential, commercial, and civic functions coexist in close proximity, because they enjoy advantages over more homogeneous, single-use places. They are more innovative, because they create conditions in which diverse people and ideas are more likely to bump into one another and generate new ideas. They tend to be safer, as more people are out and around all times of the day. And they’re more interesting places to be.

Bringing together diverse activities in a place requires a range of building types. It also depends on having structures of varying ages, since some uses that strengthen neighborhoods -- independent bookstores, salons, or casual eateries -- may not be economically viable in new high-end buildings.

Inclusive placemaking demands walkable mixed-use centers where people can congregate throughout the day. Walkability makes a place more engaging and brings diverse people into face-to-face contact.

Another key principle is to create high-quality green space, integrated into surrounding neighborhoods. Parks, trails, waterfront spaces, and other outdoor amenities play vital roles in attracting people to neighborhoods, bringing people together, and encouraging exercise and well-being. They also spur much-needed development and reinvestment in nearby areas.

Cities should make mixed-use neighborhoods accessible to wide ranges of people by connecting existing places through multiple transportation modes and encouraging development of diverse land uses in and around historically disadvantaged concentrations of people. They should make mixed-use places welcoming by creating affordable spaces for local artisans and other small businesses, promoting cultural diversity (for instance, through diverse restaurant styles), and conveying inclusive messages to potential residents across ethnic and socioeconomic lines.

Inclusive places, finally, must be affordable for local residents and businesses. Cities should promote affordability through flexible land-use policies and streamlined development processes, so supply of housing and commercial property can keep up with demand. Cities should employ a toolkit of affordable housing policies, including voluntary inclusionary zoning that offers developers greater density in return for setting aside affordable units and novel vehicles like community land trusts in order to promote housing at a range of price points. And they should emphasize preservation and rehab of existing housing units in mixed-use areas since longtime homes contribute to neighborhood character and are the chief source of affordable housing for the future.

At the same time, inclusive placemaking doesn’t mean targeting density as an end in itself. Density is a natural consequence of rising wealth creation in a place, but forcing density is likely to end badly -- as cities have seen with disastrous public housing projects and moribund “central business districts.”

Inclusive placemaking also isn’t just about aesthetic judgments. Forgettable old structures can play a positive role when they’re restored and bustling with diverse activities, while eye-catching buildings can devolve into sterile places if they’re disconnected from their surrounding neighborhood.

Why inclusive placemaking?

Inclusive mixed-use neighborhoods advance opportunity through several channels:

First, high-skilled people with choices flock to them and employers follow, which creates opportunities for everyone nearby.

Second, they make economies more productive by stimulating agglomeration economies -- innovation benefits that arise when firms, people, and ideas come together in a concentrated place.

Read the rest of this piece at: BushCenter.org.

J.H. Cullum Clark is Director, Bush Institute-SMU Economic Growth Initiative and an Adjunct Professor of Economics at SMU. Within the Economic Growth Initiative, he leads the Bush Institute’s work on domestic economic policy and economic growth. Follow him on Twitter @cullumclark.

Photo: Pacific Park Plaza plan, via @ParksforDowntownDallas on Instagram.

Urban Reform Institute Releases Report on Upward Mobility

Charles Blain – Wendell Cox – Joel Kotkin — Fri, 23 Oct 2020 20:29:01 -0400

In a new report, Upward Mobility, Charles Blain, Wendell Cox and Joel Kotkin examine examine housing costs, patterns of domestic migration and how they affect upward mobility for middle and working-class citizens, especially historically disadvantage minorities. An excerpt from the report follows below:

“If a man doesn't have a job or an income, he has neither life nor liberty nor the possibility for the pursuit of happiness. He merely exists.”
Martin Luther King, Jr. — 1968

In today’s media, on our college campuses, and on the streets of our great cities, no cry is more pervasive than the demand for “social justice” for America’s minorities. While much attention is given to athletes, academic pundits, political activists, and media figures who signal their fealty to the cause of racial equality, there has been precious little attention paid to conditions experienced by minorities on the ground.

If rhetoric could magically change conditions, minorities in the most ‘woke’ metropolitan areas would be doing great. California Governor Gavin Newsom, for example, brags that his state is “the envy of the world,” and is not going to abandon its poor people: “We’re not that state.” He said, “Unlike the Washington plutocracy, California isn’t satisfied serving a powerful few on one side of the velvet rope. The California Dream is for all.”

Really? California, well known for its wealth, had the sixth highest median household income in the nation in 2019, yet has had the highest housing-cost-adjusted poverty rate among the states since data was first published in 2011.2 A net 2.4 million residents left California between 2000 and 2019, 7% of its 2000 population.

Similarly, during the same period New York lost 16% of its population to other states. Political leaders like New York’s Mayor Bill DeBlasio, who has set up a commission designed to uproot the city’s ’institutional’ racism, epitomizes the current fashion. If powerful rhetoric were an elixir, minorities in metropolitans like New York City, San Francisco, Los Angeles, and Chicago would be doing better than their counterparts in less ‘woke’ areas. But they do far worse in terms of actual measurements of progress: income, housing affordability, and education. New York and California also exhibit among the highest levels of inequality in the country, with poor outcomes for Blacks and Hispanics. Perhaps most intriguing are the domestic migration patterns that show where they are choosing to live.

Read or download the full report here

Charles Blain (@cjblain10) is the president of Urban Reform and Urban Reform Institute. He is based in Houston and writes on municipal finance, urban politics, and other issues.

Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He is a founding senior fellow at the Urban Reform Institute, Houston and a member of the Advisory Board of the Center for Demographics and Policy at Chapman University in Orange, California. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is co-author of the annual Demographia International Housing Affordability Survey and author of Demographia World Urban Areas.

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

The Wondrous, Magnificent Cities of the 21st Century

Ed Ring — Thu, 19 Mar 2020 17:43:39 -0400

The American Conservative recently laid an egg. They published a misanthropic, pessimistically aggressive Malthusian screed, written by James Howard Kunstler.

Kunstler’s “Why America’s Urban Dreams Went Wrong” attacks pretty much every urban amenity Americans have built since the invention of the automobile. And his reasoning, all of it, reflects a dismal lack of faith in human creativity and adaptability, paired with a certainty that the 21st century will be one of declining fortunes and devastating scarcity.

Kunstler is pushing what he calls “The Long Emergency” (also the title of a book he wrote in 2005), a “general contraction,” whereby “The urban metroplexes of the U.S. have assumed a scale and complexity of operation that cannot be sustained in the coming disposition of things. They will contract substantially.”

And what is this “coming disposition of things?” According to Kunstler, they include “population overshoot, the fossil-fuel quandary, competition over dwindling resources, an unsound banking system, climate uncertainty, and much more.”

When it comes to human habitations, especially in America, Kunstler doesn’t have a lot of nice things to say. He doesn’t like high rises, writing “Cities that are overburdened with skyscrapers and megastructures face an added degree of failure. These buildings will never be renovated in the coming era of resource and capital scarcity.” But he doesn’t spare the suburbs.

“Suburbia has poor prospects for adaptive re-purposing in the lean and stringent conditions ahead,” writes Kunstler, “Rather, it has three probable destinies: slums, salvage operations, and ruins, perhaps in that order. The suburbs will certainly lose their utility as mass motoring comes to an end. Their supporting infrastructures—great highways and road networks, water systems, electric distribution, waste disposal—will disintegrate from deferred maintenance.”

Why Are Malthusian Proto-Preppers Attractive to Conservatives?

It’s easy enough to pick apart additional snippets from Kunstler’s recent article in the American Conservative. But his perspective is transparent and easily grasped. He doesn’t believe American urban civilization is sustainable, and he believes we’d all better move to places where there’s easy access to farmland and rivers; as he puts it, “small towns and small cities that are scaled to the capital and resource realities of the future.”

If you want to get more of an impression of James Howard Kunstler, have a look at his 2004 TED talk, or visit his homepage. He’s made a living as a survivalist masquerading as an urban geographer.

Stepping back, Kunstler’s over-the-top act is sort of appealing, but the fact that doomsday merchants like him are gaining traction with some conservatives is not the least bit endearing. If you haven’t noticed the growing overlap between libertarian conservatives and environmentalist zealots, you aren’t paying attention.

Read the rest of this piece at California Policy Center.

Edward Ring is a co-founder of the California Policy Center and served as its first president.

Photo credit: xPhantomhive via Wikimedia under CC 4.0 License.

Spontaneity: The Missing Ingredient in Disney Parks

Samuel J Abrams — Wed, 11 Mar 2020 11:35:00 -0400

Feelings of frustration, exhaustion, and being overwhelmed may be some of the last words Disney “imagineers” – people who are part of the “creative engine that designs and builds all the Walt Disney Company theme parks” – want to hear when guests visit their various theme parks around the world. Sadly, these words describe my recent trip to Orlando and it turns out that many other families regularly feel the same way.

Like 21 million others, I recently had the opportunity to spend the day with my young son in Disney’s Magic Kingdom, a place dubbed “The Most Magical Place On Earth." For me, the theme park was anything but magical.

Rather than being able to stroll in the unique and heavily themed environment and enjoy my son’s whims and curiosities, all hallmarks of a great public space, the entire park experience had to be planned well in advance and this functionally eliminated whimsy, spontaneity which creates joy and meaningful experiences. So, when my son wanted to head in a particular direction or try a certain ride, we had to explain to him that it simply could not happen and the experience just not fun or pleasant.

More specifically, because of the large numbers of people present in the park even at non-peak times, the Disney Company now asks that you sign up for a limited number of “fast passes” in advance of your trip. While many people have learned how to game the system, the idea is that because the wait times are so intense, you can have three rides or shows with relatively short, reasonable wait times. After your limited number of 3 experiences are gone – you have to wait and all spontaneity ends. So, if you want join in on Peter Pan’s Flight, try It’s a Small World, or hop on a horse on the Prince Charming Regal Carrousel without a fast pass- all rides intended for young children - you and your party should be ready to stand in line for close to 2 hours all for a few minutes of “magic;” this kind of wait is very trying with a little one under 2 or for most children.

The problems go well beyond long ride lines; movement in the park itself regularly restricted and seating is severely limited and character interactions are heavily controlled and scripted making for an absolutely miserable experience. Gone are the days one could “run into” characters while walking around; now they are in controlled spaces where one waits for hours to snap a photo with mascots like Mickey Mouse or Tinkerbell.

While it is understandable that characters can no longer roam freely in the park for the delight of the younger guests due to safety concerns, many of the features that make spaces great and the thrill of random encounters are entirely gone. These developments would disappoint Walt Disney himself.

As originally conceived by Mr. Disney, the original park. located in Anaheim, south of Los Angeles, as “a place for people to find happiness…It will be a place for parents and children to share pleasant times in one another’s company” which all “…started from a daddy with two daughters wondering where he could take them where he could have a little fun with them, too.”

Disney may have had good intentions about sharing quality time together as family and the parks have been so successful in achieving his stated goal of having visitors “feel they’re in another world.” But now the parks today are so crowded, controlled and require meticulous advanced planning if one has the slightest hope of avoiding multiple hour long waits for rides, shows, and experiences which is simply impossible for many families with young children.

Given these norms in the parks, places like the Magic Kingdom become “dead spaces” and joyless. Noted urban theorist Richard Sennett deftly made this point in his 2002 book The Fall of Public Man and would describe these parks as lifeless because they have essentially eliminated meaningful chance encounters with others. Gone is the spontaneity, chaos, and even a bit of danger which collectively make help create spaces both authentic and joyous. The parks themselves are tidy and quite pleasant - there is music, landscaping, and attractive areas for congregating for staged events – but the range of genuine and unplanned engagement is minimal.

In contrast, I have been able to travel with my son to other walkable areas around the country from Savannah to Fargo to San Francisco and the experiences there were filled with enjoyment because we were able to explore and make choices on a whim.

I hope I never forget my day walking in Savannah where my son and I started walking from Wright Square and we eventually wandered into an antique map shop which was in the basement of a townhome on Monterey Square, one of Savannah’s 22 squares throughout its historic center, and later found ourselves visiting the Book Lady bookstore off of Chippewa Square or the Planet Fun toy store on East Broughton street. We eventually found ourselves at the Savannah City Market for lunch where there were local food specialties on offer that are not prominent in my hometown of New York.

What made the day so special was not just what we found and did but that our walk was unplanned. To be sure, there were elements of danger due to some aggressive panhandling in a few areas, and my son and I were able to explore and genuinely engage with the place and people without lines and meticulous planning . Imbibing the spontaneity and randomness was truly fun in ways that the Disney parks sadly lack.

None of this is to suggest that people do not have wonderful experiences at the Disney parks or to argue that a truly spontaneous and fun experience must occur in an urban area with its own historical features. After all, most Americans, particularly those with families, live, unlike mine, in suburban, exurban or small town environments.

However, as I spent time in the park, I spoke with dozens of families who had the same concerns that being in parks without being able to make real choices. Dozens of online reports have expressed the same sentiments and it is clear that if the legacy of Walt Disney is to be genuinely exemplified by the company in the current day, the Walk Disney Company needs to pause and re-think how to better enable families to be impulsive in the parks and allow for unplanned fun.

Samuel J. Abrams is professor of politics at Sarah Lawrence College and a visiting scholar at the American Enterprise Institute.

Photo credit: B64 via Wikimedia under CC 3.0 License.

The Real Conflict Is Not Racial or Sexual, It's Between The Ascendant Rich Elites and The Rest Of Us

Joel Kotkin — Thu, 12 Sep 2019 21:29:59 -0400

Despite the media’s obsession on gender, race and sexual orientation, the real and determining divide in America and other advanced countries lies in the growing conflict between the ascendant upper class and the vast, and increasingly embattled, middle and working classes. We’ve seen this fight before. The current conflict fundamentally reprises the end of the French feudal era, where the Third Estate, made up of the commoners, challenged the hegemony of the First Estate and Second, made up of the church and aristocracy.

These dynamics are unsettling our politics to the core. Both the gentry left, funded largely by Wall Street and Silicon Valley, and the libertarian right, have been slow to recognize that they are, in de Tocqueville’s term, “sitting on a volcano ready to explode.” The middle class everywhere in the world, notes a recent OECD report , is under assault, and shrinking in most places while prospects for upward mobility for the working class also declines.

The anger of the Third Estate, both the growing property-less Serf class as well as the beleaguered Yeomanry, has produced the growth of populist, parties both right and left in Europe, and the election of Donald Trump in 2016. In the U.S., this includes not simply the gradual, and sometimes jarring, transformation of the GOP into a vehicle for populist rage, but also the rise on the Democratic side of politicians such as Sens. Bernie Sanders and Elizabeth Warren, each of whom have made class politics their signature issue.

The Rise of Neo-Feudalism

Today’s neo-feudalism recalls the social order that existed before the democratic revolutions of the 17th and 18th Century, with our two ascendant estates filling the roles of the former dominant classes. The First Estate, once the province of the Catholic Church, has morphed into what Samuel Coleridge in the 1830s called “the Clerisy,” a group that extends beyond organized religion to the universities, media, cultural tastemakers and upper echelons of the bureaucracy. The role of the Second Estate is now being played by a rising Oligarchy, notably in tech but also Wall Street, that is consolidating control of most of the economy.

Together these two classes have waxed while the Third Estate has declined. This essentially reversed the enormous gains made by the middle and even the working class over the past 50 years. The top 1% in America captured just 4.9 percent of total U.S. income growth in 1945-1973, but since then the country’s richest classes has gobbled up an astonishing 58.7% of all new wealth in the U.S., and 41.8 percent of total income growth during 2009-2015 alone.

In this period, the Oligarchy has benefited from the financialization of the economy and the refusal of the political class in both parties to maintain competitive markets. As a result, American industry has become increasingly concentrated. For example, the five largest banks now account for close to 50 percent of all banking assets, up from barely 30 percent just 20 years ago.

The concentration numbers in tech are even more frightening. Once a highly competitive industry, it is now among the most concentrated. Like the barbarian chieftains who seized land after the fall of Rome, a handful of companies — Facebook, Google, Apple, Microsoft and Amazon — have gained total control over a host of markets, from social media to search, the software operating systems, cloud computing and e-commerce. In many key markets such as search, these companies enjoy market shares reaching to eighty or ninety percent.

As they push into fields such as entertainment, space travel, finance and autonomous vehicles, they have become, as technology analyst Izabella Kaminska notes, the modern-day “free market” equivalents of the Soviet planners who operated Gosplan, allocating billions for their own subjective priorities. Libertarians might point out that these tech giants are still privately held firms but they actually represent, as one analyst put it, “a new form of monopoly power made possible by the ‘network effect’ of those platforms through which everyone must pass to conduct the business of life.”

The role of the Clerisy

The new feudalism, like the original, is not based simply around the force of arms, or in this case what Marx called “the cash nexus.” Like the church in Medieval times, the Clerisy sees itself as anointed to direct human society, a modern version of what historian Marc Bloch called the “oligarchy of priests and monks whose task it was to propitiate heaven.” This modern-day version of the old First Estate sets down the ideological tone in the schools, the mass media, culture and the arts. There’s also a Clerisy of sorts on the right, and what’s left of the center, but this remains largely, except for Fox, an insignificant remnant.

Like their predecessors, today’s Clerisy embraces an orthodoxy, albeit secular, on a host of issues from race and gender to the environment. Universities have become increasingly dogmatic in their worldview. One study of 51 top colleges found the proportion of liberals to conservatives as much as 70:1, and usually at least 8:1. At elite liberal arts schools like Wellesley, Swarthmore and Williams, the proportion reaches 120:1.

Similar attitudes can be seen in virtually all other culturally dominant institutions, starting with Hollywood. Over 99 percent of all major entertainment executives’ donations went to Democrats in 2018, even though roughly half the population would prefer they keep their politics more to themselves.

The increasing concentration of media in ever fewer centers — London, New York, Washington, San Francisco — and the decline of the local press has accentuated the elite Clerisy’s domination. With most reporters well on the left, journalism, as a 2019 Rand report reveals, is steadily moving from a fact-based model to one that is dominated by predictable opinion. This, Rand suggests has led to what they called “truth decay.”

The new geography of feudalism

The new feudalism increasingly defines geography not only in America but across much of the world. The great bastion of both the Oligarchy and high reaches of the Clerisy lies in the great cities, notably New York, London, Paris, Beijing, Shanghai, Tokyo, San Francisco, Los Angeles and Seattle. These are all among the most expensive places to live in the world and play a dominant role in the global media.

Yet these cities are not the progressive, egalitarian places evoked by great urbanists like the late Jane Jacobs, but more closely resemble the “gated” cities of the Middle Ages, and their equivalents in places as diverse as China and Japan. American cities now have higher levels of inequality, notes one recent study, than Mexico. In fact, the largest gaps between the bottom and top quintiles of median incomes are in the heartland of progressive opinion, such as in the metropolitan areas of San Francisco, New York, San Jose, and Los Angeles.

In some of the most favored blue cities, such as Seattle, Portland and San Francisco, not only is the middle class disappearing, but there has been something equivalent of “ethnic cleansing” amidst rising high levels of inequality, homelessness and social disorder. Long-standing minority communities like the Albina neighborhood in Portland are disappearing as 10,000 of the 38,000 residents have been pushed out of the historic African-American section. In San Francisco, the black population has dropped from 18% in the 1970s to single digits and what remains, notes Harry Alford, National Black Chamber of Commerce president, “are predominantly living under the poverty level and is being pushed out to extinction.”

This exclusive and exclusionary urbanity contrasts with the historic role of cities. The initial rise of the Third Estate was tied intimately to the “freedom of the city.” But with the diminishing prospects for blue-collar industries, as well as high housing costs, many minorities and immigrants are increasingly migrating away from multi-culturally correct regions like Chicago, New York, Los Angeles and San Francisco for less regulated, generally less “woke” places like Phoenix, Dallas-Ft. Worth, Houston, Atlanta and Las Vegas.

Yet even as the middle-class populations flee, poverty remains deeply entrenched in our big cities, with a rate roughly twice that of the suburbs. The much-celebrated urban renaissance has been largely enjoyed by the upper echelons but not the working classes. In the city of Philadelphia, for example, the “center city” income rose, but citywide between 2000 and 2014, for every district that, like downtown, gained in income, two suffered income declines. Similarly, research shows that the number of high poverty (greater than 30 percent below the poverty line) neighborhoods in the U.S. has tripled since 1970 from 1,100 to 3,100.

Undermining the Third Estate

The impact of the rising Clerisy and Oligarchs poses a direct threat to the future of the Third Estate. On the economic side, relentless consolidation and financialization has devastated Main Street. In the great boom of the 1980s, small firms and start-ups powered the economy, but more recently the rates of entrepreneurship have dropped as mega-mergers, chains and on-line giants slowly reduced the scope of opportunities. Perhaps most disturbing of all has been the decline in new formations among younger people.

This phenomenon is most evident in the tech world. Today is not a great time to start a tech company unless you are in the charmed circle of elite firms with access to venture and private equity funds. The old garage start-up culture of Silicon Valley is slowly dying, as large firms gobble up or crush competitors. Indeed, since the rise of the tech economy in the 1990s, the overall degree of industry concentration has grown by 75 percent.

Like the peasant farmer or artisan in the feudal era, the entrepreneur not embraced by the big venture firms lives largely at the sufferance of the tech overlords. As one online publisher notes on his firm’s status with Google:

If you’re a Star Trek fan, you’ll understand the analogy. It’s a bit like being assimilated by the Borg. You get cool new powers. But having been assimilated, if your implants were ever removed, you’d certainly die. That basically captures our relationship to Google.

The Clerisy’s War on the Middle Class

For generations, the Clerisy has steadfastly opposed the growth of suburbia, driven in large part by the aesthetic concerns –the conviction that single-family homes are fundamentally anti-social– and, increasingly, by often dubious assertions on their environmental toxicity. In places like California, the United Kingdom, Australia and Canada, government policies discourage peripheral construction where home ownership rates tend to be higher, in favor of dense, largely rental housing.

This marks a dramatic turnaround. During the middle of the 20th Century, ownership rates in the United States leaped from 44 percent in 1940 to 63 percent in the late 1970s. Yet in the new generation this prospect is fading. In the United States, home ownership among post-college millennials (aged 25-34) has dropped from 45.4 percent in 2000 to 37.0 percent in 2016, a drop of 18 percent from the 1970s, according to Census Bureau data. In contrast, their parents and grandparents witnessed a dramatic rise of homeownership from 44 percent in 1940 to 63 percent 30 years later.

But the Clerisy’s war on middle- and working-class aspiration goes well beyond housing. Climate change policies already enacted in California and Germany have driven millions into “energy poverty.” If adopted, many of the latest proposals for such things as the Green New Deal all but guarantee the rapid reduction of millions of highly productive and often well-paying energy, aerospace, automobile and logistics jobs.

Political implications

The war of the Estates is likely to shape our political landscape for decades to come. Parts of the Third Estate –those working with their hands or operating small businesses– increasingly flock to the GOP, according to a recent CityLab report. Trump also has a case to make with these workers, as real wages for blue-collar workers are now rising for the first time in decades. Unemployment is near record lows not only for whites but also Latinos and African-Americans. Of course, if the economy weakens, he may lose some of this support.

But the emergence of neo-feudalism also lays the foundation for a larger, more potent and radicalized left. As opportunities for upward mobility shrink, a new generation, indoctrinated in leftist ideology sometimes from grade school and ever more predictably in undergraduate and graduate school, tilts heavily to the left, embracing what is essentially an updated socialist program of massive redistribution, central direction of the economy and racial redress.

In France’s most recent presidential election, the former Trotskyite Jean-Luc Melenchon won the under-24 vote, beating the “youthful” Emmanuel Macron by almost two to one. Similarly in the United Kingdom, the birthplace of modern capitalism, the Labour Party, under the neo- Marxist Jeremy Corbyn, won over 60 percent of the vote among voters under 40, compared to just 23 percent for the Conservatives. Similar trends can be seen across Europe, where the Red and Green Party enjoys wide youth support.

The shift to hard-left politics also extends to the United States– historically not a fertile area for Marxist thinking. In the 2016 primaries, the openly socialist Bernie Sanders easily outpolled Hillary Clinton and Donald Trump combined. A 2016 poll by the Communism Memorial Foundation found that 44 percent of American millennials favored socialism while another 14 percent chose fascism or communism. By 2024, these millennials will be by far the country’s biggest voting bloc.

In the current run-up to the Democratic nomination these young voters overwhelming tilt toward Sanders and his slightly less radical colleague Warren, while former Vice President Joe Biden retains the support of older Democrats. The common themes of the “new” Left, with such things as guaranteed annual incomes, rent control, housing subsidies, and free college might prove irresistible to a generation that has little hope of owning a home, could remain childless, and might never earn enough money to invest in much of anything.

At the end, the war of the estates raises the prospect of rising autocracy, even under formally democratic forms. In his assessment in “Democracy in America,” Alexis de Tocqueville suggests a new form of tyranny — in many ways more insidious than that of the monarchical state — that grants favors and entertainments to its citizens but expects little in obligation. Rather than expect people to become adults, he warns, a democratic state can be used to keep its members in “perpetual childhood” and “would degrade men rather than tormenting them.”

With the erosion of the middle class, and with it dreams of upward mobility, we already see more extreme, less liberally minded class politics. A nation of clerics, billionaires and serfs is not conducive to the democratic experiment; only by mobilizing the Third Estate can we hope that our republican institutions will survive intact even in the near future.

Mr. Kotkin is the Presidential Fellow in Urban Futures at Chapman University and the executive director of the Center for Opportunity Urbanism. His next book, “The Coming Of Neo-Feudalism,” will be out this spring.

This piece first appeared in Daily Caller.

Photo credit: cantfightthetendies via Flickr under CC 2.0 License

Move Over, San Francisco: Dallas Tops Our List Of The Best Cities For Jobs 2017

Joel Kotkin and Michael Shires — Wed, 17 May 2017 10:16:30 -0400

Dallas is called the Big D for a reason. Bigger, better, best: that’s the Dallas mindset. From the gigantic Cowboys stadium in Arlington to the burgeoning northern suburbs to the posh arts district downtown, Dallasites are reinventing their metropolis almost daily. The proposed urban park along the Trinity River, my Dallas friends remind me, will be 11 times bigger than New York’s Central Park.

Here’s something else for them to boast about: the Dallas-Plano-Irving metropolitan area ranks first this year on our list of the Best Cities For Jobs.

2017 Best Cities Rankings Lists

It’s a region that in many ways is the polar opposite of the San Francisco and San Jose metropolitan areas, which have dominated our ranking for the last few years. (They still place second and eighth this year, respectively, among the largest 70 metropolitan areas, though San Jose is down sharply from second place last year.)

Unlike the tech-driven Bay Area, Dallas’ economy has multiple points of strength, including aerospace and defense, insurance, financial services, life sciences, data processing and transportation. Employment in the metro area has expanded 20.3% over the past five years and 4.2% last year, with robust job creation in professional and business services, as well as in a host of lower-paid sectors like retail, wholesale trade and hospitality.

According to Southern Methodist University’s Klaus Desmet and Collin Clark, Dallas’s success stems in part from the fact that it isn’t looking to appeal to the elite “creative class,” but to middle-class workers and the companies and executives who employ them. Dallas attracts both foreign and domestic migrants, particularly from places like California, where housing is, on an income-adjusted basis, often three times as expensive. This has had much to do with the relocation to the area of such companies as Jacobs Engineering, Toyota, Liberty Mutual and State Farm.

Methodology

Our rankings are based on short-, medium- and long-term job creation, going back to 2005, and factor in momentum — whether growth is slowing or accelerating. We have compiled separate rankings for America’s 70 largest metropolitan statistical areas (those with nonfarm employment over 450,000), which are our focus this week, as well as medium-size metro areas (between 150,000 and 450,000 nonfarm jobs) and small ones (less than 150,000 nonfarm jobs) in order to make the comparisons more relevant to each category. (For a detailed description of our methodology, click here.)

The Rise of Low-Cost Meccas

Dallas is far bigger (particularly if you add the neighboring 28th-ranked Ft. Worth-Arlington area to the mix) than any of the other metro areas that have prospered by offering cheaper alternatives to coastal cities, with lower taxes and generally more friendly business climates. Among them is No. 3 Nashville-Davidson-Murfreesboro-Franklin, Tenn.

The metro area has seen rapid job growth, nearly 20.6% since 2011. Last year job growth was across the board, including a 4.1% expansion in manufacturing employment, 5.2% in business professional services, and 2.9% in the information sector.

Like Dallas, Nashville has become a mecca for companies looking to relocate operations. Some, like UBS, are fleeing the high cost of places like New York or London. Others, like Lyft, are escaping high costs in coastal California. CKE Restaurants, owner of Carl’s Junior and Hardees, is moving operations from coastal California and St. Louis to set up shop in Nashville. All are bringing a diverse new range of jobs to the Music City.

Other low-cost migration meccas include fourth-place Charlotte-Concord, Gastonia, No. 5 Orlando-Kissimmee-Sanford, and No. 6 Salt Lake City. All boast growing tech centers with rapidly expanding STEM employment, as well as business and professional service growth.

Boom Towns Get Pricier

Some thriving metro areas on our list are becoming increasingly expensive, but they still don’t pack the tax and housing punch associated with blue state economies. No. 7 Austin-Round Rock, No. 9 Seattle-Bellevue-Everett and No. 11 Denver-Aurora-Lakewood have been big beneficiaries of the tech boom, and continue to attract migrants from areas like the Bay Area, where housing prices are still twice as high.

It’s possible for older large cities with strongholds in key industries to generate strong job growth. New York’s population growth in 2016 may be half of what was in 2010, but financial sector job growth and associated professional service firms enable the Big Apple to rank a respectable 25th. Another high-cost area, Boston-Cambridge-Quincy, with its unparalleled concentration of elite colleges, ranks 30th.

The picture is not so pretty in Los Angeles-Long Beach-Glendale, a region whose housing costs are almost as high as the Bay Area, with the same onerous state regulatory and tax burdens. It ranks 40th this year, with anemic 1.2% job growth in professional and business services over the past three years and 4% in financial services. The L.A. area continues to bleed manufacturing jobs, down 2.1% in the last year and 4.6% since 2013. Even retail and wholesale trade showed weakness in 2016, growing at a lowly 0.7% and 1.7% rate, respectively. The Information sector, highlighted by Snapchat’s splashy IPO, made the best showing for Tinseltown, with employment rising 4.2% in the last year. The sector, which includes entertainment, has seen employment expand an impressive 20.9% since the bottom of the recession in 2011.

As has been the case almost every year in this millennium, the super-sized metro area doing worst is Chicago. It ranks 51st this year, down four places. Since the Great Recession, Chicago has managed modest job growth of 8.3%, and only a weak 0.7% expansion in 2016. Despite an uptick in financial services jobs over the past two years, and some ballyhooed relocations of corporate headquarters, the metro area has been losing jobs in information, manufacturing, and wholesale trade. Business services was up a scant 0.5% in the last year.

Demographic Change and Changing Momentum

The resurgence of expensive areas -- notably New York and the San Francisco area -- has been propelled largely by demographic trends, notably the movement of highly educated millennials to these areas. Yet as millennials begin to enter their 30s, and seek to buy homes and raise families, the momentum may be turning decisively to regions that are both less expensive but still have considerable appeal to educated workers. Most of the big gainers this year – Dallas, Orlando, Salt Lake, Raleigh, and No. 24 Indianapolis – have developed better inner-city amenities in recent years while keeping housing costs low.

This shift is being driven in large part by unsustainable housing costs. In the Bay Area, techies are increasingly looking for jobs outside the tech hub, and some companies are even offering cash bonuses for those willing to leave. A recent poll indicated that 46% of Millennials want to leave the San Francisco Bay Area.

It seems that some areas located in pro-business, low-tax states are increasingly attracting the educated millennials that we usually associate with places like San Francisco, Brooklyn or West L.A. Since 2010, among educated millennials, the fastest growth in migration has been to such lower-cost regions as Atlanta, Orlando, New Orleans, Houston, Dallas-Fort Worth.

Over time, this migration could restructure the geography of job growth. As the middle class, particularly those of child-bearing age, continue moving out of states like California and into states like Texas. Utah or The Carolinas, the geography of skills changes. New families, a critical engine of job growth, are far more likely to form in Salt Lake City, the four large Texas metropolitan areas, or Atlanta, than in the bluest metropolitan areas like New York, Seattle, Los Angeles or San Francisco, where the number of school-age children trend well below the national average.

Ultimately, we may be on the cusp of a new economic era in which the cost of housing and living becomes once again a key determinant in regional growth. This trend has been developing for years, but both demographics, notably the aging of millennials, and out of control costs could accelerate it. Many areas may wish to somehow emerge as “the new Silicon Valley,” just as they wished once to be the next “Wall Street” or “Hollywood.” Yet these iconic economies are difficult, to impossible, to duplicate. It might make more sense instead to look the success of places like Dallas --- where lower costs are luring companies and talent at a level unrivaled in the nation.

This piece originally appeared on Forbes.

Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book is The Human City: Urbanism for the rest of us. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

Dr. Michael Shires primary areas of teaching and research include state, regional and local policy; technology and democracy; higher education policy; strategic, political and organizational issues in public policy; and quantitative analysis. He often serves as a consultant to local and state government on issues related to finance, education policy and governance. Dr. Shires has been quoted as an expert in various publications including USA Today, Newsweek, The Economist, The Sacramento Bee, San Francisco Chronicle, and LA Times. He has also appeared as a guest commentator on CNN, KTLA and KCAL to name a few.

Photo by Diann Bayes, obtained via Flickr using a CC License.

Finding the Good in This Bad Time

Wed, 28 Apr 2010 01:11:08 -0400

This year's best places rankings held few great surprises. In a nation that shed nearly 6.7 million jobs since 2007, the winners were places that maintained or had limited employment declines. These places typically had high levels of government spending (including major military installation or large blocs of federal jobs) or major educational institutions. Nor was the continued importance of the energy economy surprising in a nation where a gallon of gas is still about $3 a gallon.

Even including part of 2010, only 13 cities (out of 397) showed growth, reflecting the breadth and depth of the downturn. In an economy where the most promising statistic is a “limited” decline in the number of new job losses from month to month, where is the proverbial silver lining?

It is found in two places: (1) areas that show some resilience in this dour economy; and (2) a newly retooled American economy positioned to compete more strongly in the future.

Read how we pick the best cities.

Regions of Current Hope
With disaster as a backdrop, the early signs of buoyancy in the economies of the Intermountain West, the Great Plains, and even parts of the Midwest are quite impressive. Many predicted these areas would mirror the collapse of their larger, high-growth counterparts in California, Florida, Arizona and Nevada. To the contrary, these relatively rural locations are emerging as beacons of hope.

In the big cities, there have been across-the-board declines in most sectors led by the collapse of construction and financial services. Thousands of small businesses have disappeared in addition to huge layoffs by large employers. You see many “For lease” signs now at what were once your favorite shops and watering holes.

In a business climate like this, a lot can be said for slow and steady. Comparatively, slower-growing cities across the middle parts of the country are recovering more easily and more quickly.

Perhaps the most important lesson is that the economies of the future are not all about the "knowledge class" and that “too-good-to-be-true” high wage jobs may be just that. As seen in the dot-com bubble and in this real estate bubble, those fancy, high-wage finance and tech jobs are highly vulnerable to swings in the economy and high-paying construction jobs are only as good as the housing market.

This is simply because markets eventually adjust. In the case of overheated stock and real estate markets, the losses are felt by the knowledge class, financiers and construction workers. In the case of manufacturing, as the price is bid up through labor costs, other places become more competitive.

During volatile times, places with the broad-based growth strategies -- like Texas and Utah -- do best. Cities that are heavily dependent on a narrow set of industries leave themselves vulnerable, paying back the gains of good years in poor years.

Part of the success of Texas is not just energy (as the modest performance of Midland and Odessa shows), but rather to the state’s adjustments to a past crisis, the savings and loan crisis of the 1980s. The state instituted new laws that imposed a range of disciplines on financial markets -- such as limiting home equity lines -- thereby minimizing the damage to the state’s economy as those markets went topsy-turvy.

Regions of Future Hope
There remains hope for the future in the story of this recession. One of the defining aspects of this recession was not just that certain sectors were hit hard, but that it was also broadly distributed across the economy. This pervasiveness extended deeply enough to cause every enterprise in America to seriously reconsider their business model and re-engineer how they served their customers.

Consequently, the American economy is leaner and cleaner than it was three years ago. Businesses are more in touch with what makes them successful. While growth will be slower, it will be focused on areas that will bring about quick increases in productivity across the economy and bring new, real wealth to the local economies.

Where will this happen most quickly? In those places where businesses survived best. Expect the Intermountain West and smaller manufacturing hubs across the United States to lead the charge (because of their lower costs), but large metros like Los Angeles, Chicago, Houston, Minneapolis, and Dallas, with their deep inventories of manufacturers and large labor pools, should see these returns before too long.

Similar stories can be told for nearly every sector although the beneficiaries will be different. Much of the growth in information sector, for example, will continue to take place outside Silicon Valley. Business services will grow most rapidly where there is growth in business overall, initially outside the core hubs. Midsized and small communities will lead this recovery, and the big cities will eventually follow.

Economies open to a wide array of occupations will do better than those that are less diversified. Places like Portland and Atlanta, so deeply focused on attracting high-wage, knowledge-based jobs are likely to miss out on the “basic” job growth that will fuel the first stage of the American recovery. Venture capital is still tight across the nation and capital markets are uncertain, especially with new government regulations up in the air. Consequently, high-end, white collar, and high tech jobs, with their insatiable need for investment capital, will develop more slowly. Even among the high-tech superstars, high profits will not lead to huge surges in hiring.

Why Government Holds the Key
Government’s actions over the next six to 12 months will define potential and the pace of this recovery. With an election looming, all sides will be jockeying for electoral advantages in November. They will cater legislation to many competing constituencies, fostering tremendous uncertainty in the private sector.

One thing is certain, however. The current pace of government spending is unsustainable. Not even the US economy can support ongoing deficits in excess of $1.5 trillion per year. Either government spending must slow or someone must pay a lot more. The only alternative -- high inflation -- will have its own negative effect. One way or another some combination of the three MUST happen.

Additionally, current regulatory initiatives will change the dynamics and employment patterns within some important sectors. Whether it is the complete restructuring of the health care industry (part of one of the only bright spots in the current economy), or the prospective new regulation in the financial services sector, potentially destabilizing change is coming.

And the feds are not the only destabilizing government actors. California’s aggressive climate legislation, for example, and the mixed signals it is sending businesses across the state’s 28 MSAs will certainly shape their near and midterm economic futures.

So what should the federal and state governments be doing at this time? Most importantly, they need to ensure stability: stable capital and lending markets, a consistent and stable tax code, focusing interventions on broad-based, low-shock actions, and developing a plan for moderating and containing the national deficits and mounting national debt. The key to continued prosperity in these times is a growing private job base, not a growing government sector.

Moreover, government needs to learn the lessons of the private sector. Even as private firms retrench, governments at all levels need to reduce their cost structures. This is happening in many localities, at least on a temporary basis, as even unionized local employees are accepting wage and benefit reductions to retain jobs. Localities and states must recognize the true cost of the services they provide. They must either find consistent ways of providing funding for them, or eliminate them to preserve more critical services.

Finally, public and private sectors alike must learn that this has been a transformational recession. Unlike downturns in the past, business and government cannot expect things will return to the way they were. Markets and banks will not be printing imaginary value increases in real property for consumers to spend any time soon and capital markets are cautious about financial good news,,preferring the old tried and true winners to novelties.

Government and government employees are behind the curve understanding this transformation. Wage and benefit concessions given up during this recession are not likely to reappear. The concepts of furlough and unpaid time off are here to stay. Even as the private sector has been forced to reconsider its baseline practices, so, too, the political pressure now will be on government to retain savings obtained during the recession.

Michael Shires, Ph.D. is a professor at Pepperdine University School of Public Policy.

The Worst Cities For Jobs

Joel Kotkin — Tue, 27 Apr 2010 11:54:12 -0400

In this least good year in decades, someone has to sit at the bottom. For the most part, the denizens are made up of "usual suspects" from the long-devastated rust belt region around the Great Lakes. But as in last year's survey, there's also a fair-sized contingent of former hot spots that now seem to resemble something closer to black holes.

Two sectors have particularly suffered worst from the recession, according to a recent study by the New America Foundation: construction, where employment has dropped by nearly 25%, and manufacturing, which has suffered a 15% decline. The decline in construction jobs has hit the Sunbelt states hardest; the manufacturing rollback has pummeled industrial areas such as the Great Lakes as well as large swaths of the more recently industrialized parts of the Southeast.

Read how we pick the best cities.

Then there is California, a state that should be doing much better given its natural advantages and vast human capital but whose regions--with the exception of government-rich Hanford--share various degrees of distress. The bursting of the real estate bubble has hit the Golden State hard, but seeing so many poor performances in my adopted home state is distressing and points to much deeper problems. Rankings author Michael Shires, pointing to the looming prospect of high taxes and expanding regulation, notes that "While California's economy has come roaring back many times before, a resurgence this time will be slowed by the state's increasing willingness to aggressively tax and regulate those who will make it happen."

Rust Belt Ruins

The traditional manufacturing heartland long has suffered, and in this recession industrial jobs have declined rapidly and only now seem to be slowly expanding. Ever since we started these surveys back in the early 2000s, cities and towns along the rust belt have inhabited the bottom rungs.

Starting up from the last place finisher, No. 397 Warren-Troy, Mich., these old industrial cities dominate the nether regions; of the bottom ten finishers overall, six come from the Wolverine State, including long-suffering Detroit, which ranks 394th overall and 65th on the list of large metros (next to its neighbor, Flint, in last place). Other rust belt bottom-dwellers include No. 395 Elkhart and No. 392 Kokomo in nearby Indiana.

Perhaps more disturbingly, many of those at the bottom come from what used to be called "the new South," cities that industrialized late and often benefited from the flow of jobs from the old rust belt. Places such as No. 396 Morristown, Tenn., No. 390 Dalton, Ga., and No. 389 Hickory-Lenoir-Morganton, N.C., have suffered from a recession that has either forced companies to shut down or move overseas.

Sun Belt Busts

Ever since the collapse of the housing bubble in 2007, we have seen a remarkable turnaround in many Sunbelt regions. Traditionally, these led the list as emerging boomtowns. Now many appear more like bust-towns.

Take a look at the rapid decline of such hot spots as Las Vegas, which now ranks 57th out of the 66 largest metros in the country; Phoenix, now lurking at No. 51; and No. 61 West Palm Beach, No. 56 Fort Lauderdale, No. 54 Tampa and No. 45 Miami, all in Florida. Many of these cities stood proudly near the top of the list as recently as three years ago. Perhaps nothing illustrates the reversal of fortunes than the fall of Reno, once our fastest-growing mid-size region, now No. 92 in the same category.

California: The Great Disaster

No state has suffered a greater reversal of fortunes than California. Five or six years ago California regions generally inhabited the top half or third of our lists. Today they generally have fallen even faster than the other Sunbelt states, even though the state's economy boasts many assets beyond merely real estate speculation.

California now accounts for a remarkable 7 of the bottom 20 regions on our big metro list. The diversity of the disaster spans both the urban centers and the exurbs--witness exurban Riverside-San Bernardino at No. 63 and the city of Oakland at No. 62. Historic high-flyers No. 59 Los Angeles and neighboring Santa Ana-Anaheim Irvine, which checks in at an abysmal No. 60, didn't fare much better.

Perhaps more shocking is the poor performance handed in by the state capital, Sacramento, a former high-flyer now mired at No. 54, and San Diego, a high-tech haven with a near-perfect climate, that resides at No. 48. Even No. 47 San Jose/Silicon Valley has done poorly, despite all the consistent hype about the world class tech center. The likes of Steve Jobs of Apple and Eric Schmidt at Google may be minting money, but the region, paced by declines in construction, manufacturing and business services, now has 130,000 fewer jobs than a decade ago. San Francisco does not do much better, clocking in No. 42, just ahead of its equally celebrated alter-ego Portland, Ore.

Prognosis From the Emergency Room

If this list tells us the current occupants of intensive care, what then are the prognoses for recovery? It seems the story differs for each of our three basic categories. For the rust belt cities, relief will only come when the country decides to reprioritize industry, while allowing for the restructuring of firms and contracts. On the bright side is the recovery of Ford and the potential for a second life for a greatly reduced General Motors and even Chrysler. A modest surge in production of these firms and related industries, such as steel and electronics, could help some selected regions rise up from the bottom.

The recovery of the Sunbelt economies seems likely to take hold first. Despite the giddy predictions of East Coast pundits that places like Las Vegas, Phoenix, Orlando and Tampa are doomed to what Leon Trotsky allegedly described as the "dustbin of history," this is not the first time these areas have suffered a setback. They have still not shown much life yet, but I would not count them out for the long term. There is a lot to be said for a sunny climate, greatly enhanced affordability and what many see as a high quality of life.

Ultimately, notes Rob Lang, director of Brookings Mountain West and professor of sociology at the University of Nevada-Las Vegas, the assets of these regions have either not changed--pro-business administrations and warm weather--or, in the case of housing affordability, have become more attractive. "Phoenix and Las Vegas will be fine," Lang predicts, noting that Las Vegas is working to reinvent itself beyond gaming to becoming a "convening capital" for the world economy. Similar dynamics could also boost cities in Florida, particularly if they begin focusing beyond tourism and housing.

And then there is California, which by all rights should be leading, not lagging, the current recovery. Statewide unemployment, already 12.6%, has been rising while most states have experienced a slight drop. Silicon Valley companies, Hollywood and the basic agricultural base of the state remain world-beaters. But the problem lies largely in an extremely complex regulatory regime that leads companies to shift much of their new production and staffing to other states as well as foreign countries. The constant prospect of a state bankruptcy, in large part due to soaring public employee pension obligations, does not do much to inspire confidence among either local entrepreneurs or investors.

Hopefully this will be the year when Californians decide that it needs an economy that provides opportunities to people other than software billionaires, movie moguls and their servants. It will have to include much more than the endlessly hyped, highly subsidized "green jobs." More than anything, it will take rolling back some of the draconian regulations--particularly around climate-change legislation--that force companies, and jobs, to go to places that, while not as intrinsically attractive, are friendlier to job-creating businesses.

This article originally appeared at Forbes.com.

Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.

Photo: JSFauxtaugraphy

The Best Cities For Jobs

Joel Kotkin — Tue, 20 Apr 2010 11:30:05 -0400

This year's "best places for jobs" list is easily the most depressing since we began compiling our annual rankings almost a decade ago. In the past--even in bad years--there were always stalwart areas creating lots of new jobs. In 2007's survey 283 out of 393 metros areas showed job growth, and those at the top were often growing employment by at least 5% to 6%. Last year the number dropped to 63. This year's survey, measuring growth from January 2009 to January 2010, found only 13 metros with any growth.

Mike Shires at the Pepperdine School of Public Policy, who develops the survey, calls it "an awful year." Making it even worse, the source of new jobs in almost all areas were either government employment or highly tax payer-funded sectors like education and health. This year's best-performing regions were those that suffered the smallest losses in the private economy while bulking up on government steroids.

So far the recovery has favored the government-dominated apparat and those places where public workers congregate.After all, besides Wall Street, public-financed workers have been the big beneficiaries of the stimulus, with state and local governments receiving more than one-third of all funds. Public employment grew by nearly 2% over the past three years, while private employment has dropped by 7%.

Read how we pick the best cities.

Private sector workers have also seen their wages decline, while those working for the various levels of government have held their own. Federal workers now enjoy an average salary roughly 10% higher than their private sector counterparts, while their health, pension and other benefits are as much as four times higher.

Not surprisingly government workers, according to a recent survey, are more likely to see the economy improving than those engaged in the private sector. It's not so pretty a picture on Main Street; personal bankruptcy filings rose 23% in the year ending in March.

Small Is Still Beautiful

Despite these differences, some patterns from previous years still persist. The most prominent is the almost total domination of the top overall rankings by smaller communities. With the exception of Austin, Texas, all the top 10 growers--and all the net gainers--were small communities. Americans have been moving to smaller towns and cities for much of the past decade, as well as jobs, and this recession may end up accelerating the trend.

At the top of the list stands No. 1 Jacksonville, N.C., whose economy grew 1.4%, paced by 3.3% growth in government jobs. Fast growth, however, is not a stranger to this Southern community, whose employment base has grown 22.8% since 1998. The area includes the massive Marine Base at Camp Lejeune, a beehive of activity since the U.S. started waging two wars in Afghanistan and Iraq. Fort Hood-Temple-Fort Hood in Texas came in fourth place overall with Fayetteville, N.C., home to the Army's Fort Bragg, placing sixth and Lawton, Okla., home of Fort Sill, close behind at No. 7. Similar explanations can apply to war economy hot spots Fort Stewart (No. 20 overall) and Warner Robbins (No. 26), both in Georgia.

But perhaps nothing captures the current zeitgeist more than the presence, at No. 23, of Hanford-Corcoran, Calif. A large Air Force base and a state prison have bolstered Hanford-Corcoran's economy, which shows that even in the Golden State--an economic basket case whose unemployment keeps rising--a large concentration of government jobs still guarantees some degree of growth.

Not all our top-ranked small stars got their stimulus from Uncle Sam. Energy-related growth explains strong performances from Bismarck and ag-rich Fargo, N.D., at Nos. 2 and 8, respectively. You can also credit some energy-related growth to the high standing of Morgantown, W.Va., (No. 17) and Anchorage, Alaska, (No. 18), which have benefited from consistently high prices of oil and other sources of energy.

Texas at the Top of Big Cities

Our list of best places among big cities is dominated this year, as last, by Texas, with the Lone Star State producing fully half of our top 10. This year, like last, the No. 1 big city (those with a more than 450,000 non-farm jobs) was Austin, Texas, which enjoys the benefits of being both the state capital and the home to the University of Texas, as well as a large, and growing, tech sector.

But the Texas story also includes places that do not enjoy Austin's often overwrought "hip and cool" image. Broad-based economies, partly in energy, have paced the growth of No. 2 San Antonio, No. 3 Houston, No. 5 Dallas and No. 7 Fort Worth. Other consistent big-city Southern performers include No. 8 big metro Raleigh-Cary, N.C., as well as two ascendant Great Plains metropolises, No. 9 Omaha and No. 11 Oklahoma City. None of these places were too hard-hit by the mortgage meltdown, and they all have retained reputations as business-friendly areas.

The other big winner among the large areas is an obvious one: No. 6 ranked greater Washington, D.C. While most American communities suffer, our putative Moscow on the Potomac has emerged as the big winner under Barack Obama and the congressional centralizers. Remarkably, federal employment in the area has grown at a smart pace throughout the recession. One partial result: Washington office space is now--for the first time ever--more expensive than that in Manhattan. Northern Virginia, home to many beltway bandit companies, ranks No. 4 on our list.

The Eds and Meds Economy

With the productive economy outside energy only now getting its footing, the biggest relative winners have been what could be called the "eds and meds" economies. This includes de-industrialized places such as Pittsburgh (ranked a surprising No. 13), Rochester, N.Y., (ranked No. 17) and Buffalo, N.Y. (No. 20). If you have few more factory jobs to lose, little in-migration and a huge collection of institutions relatively immune to the economic turndown, you have a better chance to look good in bad times. The stimulus tilted more toward education and health than to construction and infrastructure, something that has worked to the favor of these cities.

We can see this in New York City, whose huge and growing concentration of colleges and hospitals helped propel it to No. 10 among the big regions, its best ranking ever, despite losing almost 130,000 jobs. This is all the more remarkable since the Big Apple was the epicenter of the financial collapse, although that also made it the prime beneficiary of the federal bailout and Wall Street's boom. Soaring salaries for hedge fund managers and new hires at financial firms could be pacing new growth in the city's elaborate service industry, from toenail painters, restaurateurs and psychologists to dog walkers and yoga instructors.

The health of the eds and meds economy, however, has even been enough to lift some traditional bottom-dwelling sad sacks, such as No. 14's Philadelphia, to unfamiliar, if rather relative, heights. With private-sector growth weak everywhere, cities with lots of big hospitals, universities and nonprofit foundations look better for the time being than they have in a generation.

The Road Ahead

We expect our list to change next year, but how it will do so will depend as much on politics as economics. The current policy approaches--with healthy increases in government employment and strong support for education--have worked relatively well for taxpayer-financed economies including those with a strong "eds and meds" sectors. State universities, now confronted with the real pain of the recession felt by state taxpayers, are already crying for heavy increases in federal support.

But if Congress takes a turn to the center, or even right, after November, the advantageous position of the favored government-supported sectors may erode. Particularly vulnerable will be state workers, whose current federally sanctioned reprieve could be terminated if voters force legislators to start addressing concerns over the huge governmental deficits both locally and nationally. Given D.C.'s unique ability to print money, Washington and its environs will likely continue to expand, as they did under the spendthrift Bush regime, but many state and local governments may be forced onto a stringent diet.

On the other hand, a welcome return to basic growth in overall economy would further boost those relatively low-cost areas--notably in Texas, the Great Plains and the Intermountain West--that have in recent years enjoyed the strongest trajectory in the non-government related sectors, including natural resource-based industries . These places have pro-business regulatory and tax regimes, lots of available land and affordable housing, which will attract new businesses and workers to their areas.

This change could also benefit some places, such as Silicon Valley, parts of Southern California and the Pacific Northwest, which despite high costs still retain globally competitive, tech-related sectors. A resurgent job market in these areas would erase the current apparent advantage enjoyed by "eds and meds" based economies in favor of those places that will serve as the real incubators for a revived private sector economy. With the resumption growth, hopefully, our economy next year will begin resembling the more capitalist, competitive one we have enjoyed in the past.

This article originally appeared at Forbes.com.

Photo: kiril106