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

What the Census Numbers Tell Us

Population growth in New York, L.A., and other big coastal centers lags that of more affordable midsize metros, where Americans are moving.

The most recent Census population estimates revealed something that the mainstream media would prefer to ignore—the slowing population growth of big cities, including New York. The New York Times, for example, trumpeted Gotham’s historically high population yet failed to mention that the city’s growth is not only dramatically slowing but also, in the case of Brooklyn, declining for the first time since 2006. New York’s rate of growth, impressive earlier in this decade, now ranks among the nation’s lowest, mostly because of rising domestic out-migration. In 2017, nearly three times as many domestic migrants left the city as in 2011. This may be one reason why rents, which have soared for a decade, have begun to flatten, though they remain at a level many potential newcomers may still find difficult to afford. <!– more –>

New York’s population slowdown is hardly unique. Many of the largest U.S. metropolitan areas have seen domestic out-migration surge over the last few years. The highest-percentage declines were found in Los Angeles, Chicago, New York and, remarkably, tech-heavy San Jose, which ranked worst among 53 metropolitan areas with populations above 1 million. Last year, the San Francisco Bay Area’s seven metros experienced out-migration more than ten times higher than the annual average since 2010. This includes the “boomtown” San Francisco metropolitan area, which attracted domestic migrants from 2010 through 2015 but saw strong net out-migration last year. At 0.60 percent, San Francisco’s 2017 population growth was half its post-2010 average. In 2017, population growth in Los Angeles was among the lowest in the nation, and at 0.19 percent, down two-thirds from its annual average since 2010.

The trend of people moving to metros with the densest urban cores—a mainstay of media coverage—is clearly over. The nation’s two megacities, New York and L.A., are shedding domestic migrants far faster than smaller metropolitan areas. Over the last year, the two coastal giants have lost domestic migrants at a rate of 0.95 percent—five times faster than metropolitan areas between 5 million and 10 million residents. Meanwhile, metropolitan areas with between 2.5 million and 5 million residents added domestic migrants at 0.14 percent, while those with 1 million to 2.5 million people grew through domestic migration at a rate of 0.33 percent. The major surprise was in the often-overlooked medium-size metropolitan areas—those with between 500,000 and 1 million people. These metros gained 105,000 net domestic migrants, far outpacing the negative 165,000 net domestic migrants for those with populations greater than 1 million.

Last year’s growth leaders among the large metros were located heavily in the dispersed metros of the Sun Belt and intermountain West—Austin, Las Vegas, Dallas–Ft. Worth, San Antonio, Raleigh, Charlotte, Tampa–St. Petersburg, Orlando, and Jacksonville. Among metros with more than 500,000 people, Seattle is the only one in the Top 25 located on either the West Coast or the Northeast—and it comes in at number 25.

Perhaps even more surprising has been the resurgence of some, though certainly not all, Midwestern metros. It may be hard for big-city elites to believe, but Des Moines, Columbus, and Indianapolis, and others are now growing much faster than New York, Los Angeles, or Chicago. One big reason: in terms of domestic migration, these areas are gaining far more new residents than are the biggest metros.

Along with the shift to medium-size metros, the Census estimate confirms a trend that, in some circles, is hard to accept: people are moving “back to the suburbs.” In 2017, the core counties lost nearly 440,000 net domestic migrants, while the suburban counties gained more than 250,000. This trend is true even in New York, where the city dominates the local economy and offers urban amenities that easily outshine those of typical urban cores. The day before the new population estimates were released, the New York Times wrote eagerly about the decline of New York’s suburbs and exurbs. But, if the editors had waited for the 2017 data, they would have stumbled on another, less-welcome statistic: in terms of domestic migration, New York’s suburbs gained five people for each one who moved to Gotham over the last year. This is a far cry from earlier in the decade, when the city routinely added more population than the suburbs.

This trend is, if anything, more pronounced in other large metros. In Los Angeles, the core-county growth rate was a thin 0.13 percent, well below the national average of 0.72 percent. By contrast, much faster growth took place in Riverside-San Bernardino, part of the Inland Empire—though much disdained for its “sprawl,” its postwar suburban development has been slightly denser than that of New York—which grew at 0.47 percent. This is especially remarkable considering California’s draconian, and profoundly anti-suburban, planning regime.

The reasons for this shift in migration patterns are varied. One likely factor is the aging of the millennial generation. As members of this large cohort enter their thirties and look to buy houses and raise families, they seek out suburbs and more affordable metropolitan areas. Many of the metros with the fastest growth are those where buying a home remains feasible for middle- and even working-class families.

Entering their retirement years, the baby boomers are also having an effect. Among areas with more than 500,000 people, Florida accounted for six of the top ten metros for domestic migration last year. Metros like Las Vegas and Boise—hotspots for retirees from California—also make the short list.

The Trump administration’s economic policies appear to benefit many Southern, Midwestern, and intermountain West metros, and may be driving population growth in those areas. Energy and manufacturing jobs are important in these areas, and policies on trade, oil, and gas development make a significant difference. Though the Bay Area and New York economies remain relatively strong, they no longer pace the nation. The Top Ten job-growth leaders in 2017 came primarily from Sun Belt metros, led by Riverside-San Bernardino, Austin, Nashville, Orlando, and Jacksonville. Other large metro economies, notably Los Angeles and Chicago, lag far behind.

These developments, though disturbing to big-city boosters, are largely positive. It’s doubtful that most residents of the Bay Area, Los Angeles, or New York want to see the continuation of breakneck population growth, with its attendant consequences of higher housing prices and rents, increased congestion, and strains on public services. Growth in Midwestern and Southern metros represents a welcome shift away from concentration, and it is sparking not only suburban expansion but also, in places like Columbus and Indianapolis, lively development of the urban core.

The new Census estimates could represent both a return to the patterns of the previous decade and the suggestion of a healthier diffusion of urban growth. One of America’s great strengths, noted Alexis de Tocqueville, lies in the vitality of its many urban centers, which allows “intelligence and power” to be “dispersed abroad.” A country dominated by a handful of expensive coastal cities might be appealing to academics, the mainstream media, and some real estate interests, but for a great continental nation, a wider distribution of growth seems far more beneficial—for the emerging metros, the overheated coastal megacities, and the people who live in them.