The West Is In the Midst of a Migration and Identity Crisis

Excerpted from an article that first appeared at The Orange County Register.

As the economy has improved, popular concern, both here and abroad, has shifted to issues of migration and identity. Just last year, immigration, according to Gallup, was seen as the most important issue by barely 5 percent of the population, while the economy was cited by more than four times as many. But now, immigration and undocumented aliens is now the biggest concern to 15 percent of the population, equal to that of the economy.

You can blame Donald Trump, and his focus on that issue, for some of this. But Trump did not create the long mounting migration pressures — including 200,000 unaccompanied children during President Obama’s last term. Nor is he responsible for growing opposition — almost three-to-one — to mass migration among Europeans.

Unrestricted EU migration helped drive Brexit in the U.K., upended Italian politics and sent many traditionally centrist voters elsewhere flocking to anti-immigrant parties, including some on the extreme, quasi-fascist right. The move towards what the Guardian ominously calls “fortress Europe” could even dethrone the current queen of the EU, the much praised “great humanist,” Angela Merkel.

Read the entire piece at The Orange County Register.


Joel Kotkin 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, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He is executive director of NewGeography.com and lives in Orange County, CA.

Photo: Elekes Andor [CC BY-SA 4.0 ], from Wikimedia Commons

Patriarchy or No, it’s Good to Have Dad Around on Father’s Day

Excerpted from an article that first appeared at The Orange County Register

This Father’s Day takes place amid growing assault on what is widely called “patriarchy.” In the era of #MeToo-inspired militant feminism, it’s become increasingly fashionable to reject maleness and castigate fatherhood, as largely irrelevant and even damaging. Read more

The Fight For Our Future Belongs to the ‘Burbs

This piece first appeared on The Daily Beast.

Look away from President Trump and it’s easier to see how three long-term demographic and geographic trends are reshaping American politics. Read more

The Cities Creating The Most White-Collar Jobs, 2018

by Joel Kotkin and Dr. Michael Shires

Professional and business services have long been identified with the downtowns of cities like New York, Chicago and San Francisco, where lawyers, accountants and architects are thick on the ground. However, in recent years there’s been a clear shift in the geography of this vital sector, with some of the strongest job generation emerging far from the high-rise canyons. Read more

Where U.S. Manufacturing is Thriving, 2018

by Joel Kotkin and Dr. Michael Shires

The ‘80s futurist John Naisbitt once called manufacturing a “a declining sport,” and to be sure the share of Americans working in factories has fallen far from the 1950 peak of 30% to roughly 8.5% last year.

Yet, manufacturing’s contributions to the economy are far out of proportion to its shrinking share of employment. Read more

Growth in America is Tilting Toward Smaller Cities

Excerpted from an article that first appeared at Forbes.com

We are often told that America’s future lies in our big cities. That may no longer be entirely true. Some of the strongest job creation and population growth is now occurring in cities of 1 million people or less. Read more

Finance Flies West, and South

This article first appeared at City Journal.

The recently announced departure of New York City-based Alliance Bernstein for Nashville, taking more than 1,000 jobs with it, suggests a potential loosening of New York’s iron grip on the financial-services industry. Yet the move reflects a longer evolution that has seen financial firms leave not only New York but also other traditional centers—what one historian calls the “Yankee Empire”—that for two centuries dominated banking, insurance, and investment capital.

This process is driven, in large part, by cost considerations. The cost of living in Nashville is just 58 percent that of New York, an important differential for younger workers looking to buy houses and start families, and one likely to widen with the new federal limits on state and local tax deductions. In addition, pension-driven fiscal realities may force states like New York, Illinois, and California to keep raising revenues.

Other forces are at work, too, notably demographic shifts to Sunbelt states and the growing influence of technology companies on finance. Jobs in industries like information technology and business and professional services are fleeing the old centers outside of New York, which is holding its own better than the rest. But the stagnation, and even decline, of financial-services jobs, at a time of high profits, represents a serious threat to regions losing out on job creation in these other sectors as well.

Alliance-Bernstein notwithstanding, New York is not close to losing its hegemony over finance. With 472,000 employees in that industry, the city dwarfs all its competitors, including runner-up Chicago, where finance employs 264,000. Finance jobs in New York, according to Pepperdine University’s Michael Shires, have grown at a respectable 11 percent since 2009, though the pace has slowed more recently, last year increasing by only 1.6 percent. New York might be losing ground and market share, but the industry as a whole is not shrinking, at least for now. And New York’s traditional rivals in this sector—Chicago, Boston, and Los Angeles—have been struggling. Since 2009, Chicago’s financial job growth has been barely 5 percent, less than half of New York’s. Los Angeles, home to the fourth-largest agglomeration of finance workers, also did poorly, while Boston did even worse, actually losing finance jobs last year.

The big winners—as Alliance-Bernstein’s move demonstrated—have been overwhelmingly in the low-cost, low-density Sunbelt. With reasonable taxes, more affordable home prices, and expanding residential populations, these areas are becoming financial-industry giants, even if they lack large, locally based companies. Among the global financial firms relocating operations to these less costly locales are UBS, Deutsche Bank, Morgan Stanley, and Goldman Sachs.

The next potential financial superstar is the Dallas area, now boasting the country’s third-largest concentration of financial workers and likely to supplant Chicago from second place in the near future. Last year, the Dallas Morning News suggested that “Y’all Street” may soon replace Wall Street as the U.S. financial capital. That’s a bit of a stretch, but between 2009 and 2017, Dallas did expand financial employment by 30 percent—three times New York’s rate and more than six times that of Chicago or Los Angeles. With rapid population growth, low taxes, moderate housing prices, and a premier strategic location between the coasts, Dallas has much going for it. Last year, Texas overtook New York for the most banking and insurance jobs among the states; in 2005, New York had led by almost 100,000 jobs.

Dallas is not alone. Since 2009, Nashville, San Antonio, and Phoenix—winner of new jobs from employers like USAA, State Farm, and Charles Schwab—have experienced financial-services growth rates greater than 30 percent. Charleston, Charlotte, Durham-Chapel Hill, Raleigh, and Greenville have all seen their financial workforces expand by more than 20 percent. Florida, which shares a time zone and many cultural ties with New York, is a financial-services hotbed, with Jacksonville, Miami, Tampa, and Orlando all experiencing growth rates two times that of Gotham.

The other region clearly capitalizing on the outbound trend is the Intermountain West. The epicenter here is Utah, notably St. George, Provo, and especially Salt Lake City. All enjoyed 25 percent growth since 2009, with Salt Lake City emerging as a growing center for international banking, in large part due to the area’s language capabilities, an outgrowth of Mormon missionary activity. Salt Lake City has become Goldman Sachs’s fourth-largest global hub; the firm now employs more people there than in any U.S. location outside New York. All indications are that the financial-services presence in Utah will continue growing.

With the Internet reducing the need for close communication for many transactions, and powerful migration trends among millennials to Sunbelt and Intermountain West locales, the expensive, heavily regulated, high-tax financial bastions in New York and elsewhere can expect mounting competititon. Nor is this just a matter of low-paying back-office jobs; investment banks like Alliance-Bernstein, Morgan Stanley, and Goldman Sachs are moving well-paid professional personnel into their new outposts. In places like Charlotte, veterans of large concerns like Bank of America are setting up boutique investment banks of their own. We can expect more of this kind of activity in places like Dallas, Nashville, and Salt Lake City as well.

Another challenge for the old-line financial centers, and just as daunting, emanates from Silicon Valley. Finance appears to be yet another industry ready for “disruption”—and the primary beneficiary will not be New York but San Francisco, another financial heavy-hitter. Long a major banking hub, the city, increasingly an annex of Silicon Valley, enjoyed the fastest growth, almost 19 percent since 2009, of any of the traditional financial centers. San Jose followed closely behind, with a 16.8 percent increase.

Increasingly a business service and media hub, Silicon Valley/San Francisco is no longer just geek central. As long ago as 2015, JP Morgan Chase CEO Jamie Dimon warned that “Silicon Valley is coming” after New York’s core business. Home to many rising “fintech” companies, the Bay Area already counts established firms like Apple, Square, and Paypal that are ideally suited to the new phone-based payment system. Talent that might have headed to Wall Street or LaSalle or State Streets is instead going to San Francisco’s Montgomery Street or the dominant venture-capital region around Palo Alto and Menlo Park. Financial employment is rising in other tech centers, too, notably in Austin, where financial-sector growth topped 39 percent. California-based PIMCO, the nation’s largest bond fund, recently announced plans to site its expanding data and analytics operation in the Texas capital—not in Orange County, long a center for tech and data analysis.

The changing nature of the financial and tech industries, along with the appeal of lower-cost regions for these industries, poses a threat to long-established finance centers like Boston, Chicago, and New York. In these traditional hubs, banking and finance have long been producers of both high-paying jobs and generous revenues for overspending urban regimes. Legislators in old-guard cities should take a long look at the policies that are driving these jobs away presently—and perhaps permanently.

Joel Kotkin is the presidential fellow in urban futures at Chapman University and executive director of the Center for Opportunity Urbanism. His latest book is The Human City: Urbanism for the Rest of Us.

Homepage photo credit: Nashville Skyline by Peter Miller

Where Talent Wants to Live

Excerpted from an article that first appeared at Chief Executive.

With unemployment down and wages rising, there’s growing concern that a lengthy and potentially crippling talent shortage will sweep the U.S. Addressing this could become a critical issue for businesses competing with Asian and European firms facing similar and, in many ways, more severe shortages.

Read more

The Midwest is Booming – Just Not Where You Think

This piece originally appeared at The Daily Beast.

The Midwest is booming, but not where you might think. Kansas City, Minneapolis, Indianapolis, Columbus, Grand Rapids, and Des Moines are the fastest-growing cities in the Midwest—lapping bigger hubs like Detroit, Cleveland, Buffalo, Pittsburgh, St. Louis, and even Chicago that are still suffering from stagnant economies and slow or even negative population growth. Read more

Suburbs Could End Up On The Cutting Edge of Urban Change

This article first appeared at The Orange County Register.

Over the past decade, the old urban model, long favored by most media and academia, became the harbinger of the new city. We were going back to the 19th century, with rising dense urban cores, greater densities and thriving transit systems.

That paradigm now lives on in myth and media, but not so much in reality. As the census data this year, and indeed since at least 2012, suggests, Americans continue to do what they have done for at least a half century – spread out, innovate and, in the process, re-create the urban form.

Read more