Section » Michigan Cities
What concerns me most about Michigan’s politics is how much of it, on a bi-partisan basis, seems designed for the 20th Century. We seem to be having a hard time learning what made us prosperous in the past, won’t in the future.
Our fixation on trying to once again make Michigan a factory-based state is at the center of our last century politics. But so is our approach to transportation. In some ways its even worse. As many of our policy makers seem to be ok with returning to 19th Century gravel roads rather than raise the gas tax even with across the board support from the business community for this user fee approach to road funding.
One of the reasons we need a gas tax increase is people are driving less. And this started before the Great Recession. This is not about we can’t afford to drive, its above changing consumer preferences to live in denser communities where they can walk, bike and use transit, rather than drive everywhere often for what seems like forever. Rick Haglund in a MLive article is one of many who has written about the Millennials, among others, driving far less than their parents. Haglund writes: “A new University of Michigan Transportation Research Institute study found that by most measures, driving miles peaked in the United States in 2004, several years before the Great Recession and high gas prices hijacked consumers’ wallets. Michael Sivak, who authored the study, said the decline in miles driven is mainly a result of more telecommuting, increased use of public transportation, people relocating to cities and a decline in young drivers.” (Emphasis added.)
The trend is clear that 21st Century transportation systems are going to need to more balanced. Not just designed for cars, but for walking, bikes, and transit, transit, transit. As we have written before (here and here), in big metros like Detroit that should include rail. Places with this less car centric transportation systems are going to do better at retaining and attracting mobile talent. And places where mobile talent concentrate will be the most prosperous. End of story!
And yet Lansing, if they can cobble together the courage and votes to fund transportation, is proposing to spend nearly all the new funds on fixing and, even worse, expanding roads and doing it in a way that favors rural roads over the roads where people live. If we are serious about building a 21st Century transportation system there are four steps we should take in whatever transportation funding initiative emerges in Lansing:
- Fund roads on the basis of population, not road miles.
- Increase the funding for transit to the state constitutional maximum
- Adopt complete streets as the basis for transportation design rather than the current policy of ever wider and wider roads to move cars faster and faster
- Stop major road expansion projects like the widening of I94 and I75 in metro Detroit.
For those interested in learning what a 21st Century transportation system should look like and how to build it I highly recommend Walkable City by Jeff Speck. As Speck makes clear, we know what 21st Century transportation looks like because leading edge communities across the country are building it. Its time for Michigan to join them.
In two recent New York Times posts Paul Krugman has explored the economic benefits dense regions enjoy compared to those characterized by sprawl. They are worth checking out.
The first looks at the Detroit bankruptcy. Its entitled “A Tale of Two Rust-Belt Cities“. Krugman asks: “Here’s a question: is the crisis in Detroit simply a function of the industrial decline of the U.S. heartland, or is it about internal developments within the metro area that have produced a uniquely bad outcome?” He looks for the answer by comparing metro Detroit to metro Pittsburgh. As he notes one declining, the other expanding. Krugman writes:
“… Obviously, however, Detroit’s central city has collapsed while Pittsburgh has had at least something of a revival. The difference is really clear in the Brookings job sprawl data (pdf), where less than a quarter of Detroit jobs are within 10 miles of the traditional central business district, versus more than half in Pittsburgh. At this point, … Pittsburgh is showing a lot of resilience; it seems to have managed to diversify its economy, and in fact is more than matching national employment performance. Detroit, despite the auto rescue, isn’t — and, of course, its center did not hold. It’s hard to avoid the sense that greater Pittsburgh, by taking better care of its core, also improved its ability to adapt to changing circumstances. In that sense, Detroit’s disaster isn’t just about industrial decline; it’s about urban decline, which isn’t the same thing. If you like, sprawl killed Detroit, by depriving it of the kind of environment that could incubate new sources of prosperity.” (Emphasis added.)
Krugman also explores the connection between density/sprawl and economic mobility. This is based on the must read new study from the Economic Mobility Project of economic mobility –– the ability of those who grow up at the bottom to move up the economic ladder. (A great summary, with terrific interactive graphs, from the New York Times can be found here.)
As one might expect metro Detroit is one of the laggards. A place where those at born at the bottom have a small chance to move up the economic ladder. In a post entitled “Stranded by Sprawl” Krugman explores why metro Detroit and metro Atlanta –– two very different metros –– both are near the bottom of the economic mobility rankings. He writes:
“Yet in one important respect booming Atlanta looks just like Detroit gone bust: both are places where the American dream seems to be dying, where the children of the poor have great difficulty climbing the economic ladder. In fact, upward social mobility — the extent to which children manage to achieve a higher socioeconomic status than their parents — is even lower in Atlanta than it is in Detroit. And it’s far lower in both cities than it is in, say, Boston or San Francisco, even though these cities have much slower growth than Atlanta. So what’s the matter with Atlanta? A new study suggests that the city may just be too spread out, so that job opportunities are literally out of reach for people stranded in the wrong neighborhoods. Sprawl may be killing Horatio Alger.”
(By the way race did not turn out to be a major contributor to the differences between regions. As Krugman writes: “When the researchers looked for factors that correlate with low or high social mobility, they found, perhaps surprisingly, little direct role for race, one obvious candidate.”)
Incubating new sources of prosperity and improving economic mobility are both outcomes that metro Detroit desperately needs. That more density –– particularly a dense/vibrant central city –– and far less sprawl are an important part of the recipe to get both is a lesson metro Detroit needs to learn. The sooner the better.
The best commentaries on the Detroit bankruptcy I have read are a Forbes article entitled “The Unions Didn’t Bankrupt Detroit, But Great American Cars Did” and a Robert Samuelson column for Real Clear Politics entitled “Reinventing Detroit”.
Both make the point that the chief cause of Detroit’s collapse is the region (not just the city) not moving away from the economy of the past for way too long. That its over reliance on the auto industry –– and particularly auto factories –– dooms the region to slow economic growth. And slow economic growth makes almost inevitable financial woes not just for the industry but also for local governments particularly those where the poorest in the region are concentrated.
This analysis is that the fundamental challenge for the city and region is economic, not political. Yes corruption, mismanagement, legacy costs, state budget cuts, white flight, etc. contributed to the bankruptcy. But at its core the region and city are not going to have prosperous citizens and local governments, schools, etc. until and unless metro Detroit becomes a competitive 21st Century economy rather than relying (more like wishing and hoping) on the old auto factory economy that made us one of the most prosperous places in the last century.
Forbes writes: “Put simply, Michigan and its city most known for the rise of the automobile clung to a business – car manufacturing – that was long ago rendered yesterday’s commercial news. And just as Silicon Valley would be destitute too if its companies used limited U.S. labor to manufacture computers that anyone can make, Detroit is bankrupt because its biggest employers still manufacture – as opposed to simply design – cars that anyone can make. The mainstream punditry will talk about unions, crime and high taxes as the causes of Detroit’s bankruptcy, but the real answer is rooted in something far more basic: cars are easy to make, and Detroit’s biggest employers make cars. Detroit will revitalize itself once its biggest employers migrate toward that which isn’t so simple.”
Samuelson writes: “In the countless Detroit post-mortems, many potential villains have emerged: the ineffectiveness of Coleman Young, mayor from 1974 to 1994; white flight (from 1970 to 2008, the white portion of the city’s population fell from 56 percent to 11 percent); costly government workers’ pensions. But at bottom, Detroit’s failure resulted from its success. It became a prisoner of its dependence on the auto industry. … But what made short-term sense spelled long-term suicide — for companies, workers, Detroit and Michigan.”
Samuelson goes on the explore the way out. Once again its primarily economic, not political. He interviews Edward Glaeser, the author of the terrific Triumph of the City. Samuelson continues:
“What cities do is transfer information,” says Glaeser. They’re incubators for new ideas and industries. This describes the Detroit of the early 1900s, when dozens of car companies formed annually (peak year: 1907 at 82). Though it doesn’t mirror post-war Detroit, it does suggest what the city and state need to become. They aren’t alone in suffering economic dislocation. In 1971, two Seattle realtors posted this funny-dreary billboard: “Will the last person leaving SEATTLE — Turn out the lights.” Employment at Boeing had plunged from 100,800 in 1967 to 38,690. In the late 1960s and early 1970s, New York City lost more than 300,000 manufacturing jobs, led by the garment industry, reports Glaeser. But the losses weren’t fatal. The Seattle area now has Microsoft, Amazon and Starbucks; New York has recovered, led in part by a resurgent (and maligned) financial industry.
Samuelson concludes: “What Detroit teaches is that those who deny economic change often become its victims.“
As we have seen Minnesota has better economic outcomes on every metric that matter to families trying to pay the bills and save for their retirement and their kids college education. Its not close. The main reason for the out performance is that Minnesota is over concentrated in the knowledge-based service industries that have faster employment growth and higher wages. Indiana is under concentrated in those industries.
The main ingredient that allows Minnesota to participate more in the knowledge sectors of the economy is human capital. As Governor Snyder says: “Today, talent has surpassed other resources as the driver of economic growth.” Specifically the proportion of adults with a four year degree or more. Which now is the best predictor of a state’s per capita income. Here again Minnesota is one of the leading states, Indiana near the bottom.
Here are the details:
- Minnesota is 10th in proportion of adults 25 and older with a four year degree or more at 32.4%
- Indiana is 43rd in proportion of adults 25 and older with a four year degree or more at 23.0%
- Minnesota is 8th in the proportion of 25-34 year olds with a four year degree or more at 37.2%
- Indiana is 33rd in the proportion of 25-34 year olds with a four year degree or more at 27.0%
As we have explored extensively, 25-34 year olds are the mobile young talent every state has made an economic development priority. There is a strong case that where they settle will determine whether or not a state will be prosperous or not in the future. If that is true Minnesota is going to continue to be prosperous, Indiana not.
- In 2011 there were 276,000 young professionals in Minnesota compared to 224,000 in Indiana
- From 2006 to 2011 the number of young professionals in Minnesota grew 17.7% in Indiana 6.1%
- Minnesota is 21st in total population and 17th in population of 25-34 year olds with a four year degree or more
- Indiana is the reverse, 16th in total population and 20th in population of 25-34 year olds with a four year degree or more
As is true in most states the difference is in the concentration of college educated adults in their big metro and its central city.
- Metro Minneapolis four year degree attainment rate is 37.2%, metro Indianapolis is 29.2%
- For 25-34 year olds its 42.9% compared to 34.3%
- Metro Minneapolis is home to 226,000 young professionals, metro Indianapolis 100,000
- Minneapolis and St. Paul combined have 62,000 young professionals, the city of Indianapolis (which is a county) 40,000
As we explored in my last post, 25-34 year olds with a four year degree or more are concentrating in big metros, with a high proportion living in their central cities. Seventy four percent of young professionals are living in one of the 54 regions with a population of one million or more and in those metros one third live in the central city(s). The concentration is even greater in the top ten where 42% live with 35% of them in the central city.
The top ten are:
New York | Los Angeles | Washington DC | Chicago | San Jose/San Francisco | Boston | Philadelphia | Dallas | Atlanta | Houston
But the clear winner is the New York City CSA. This now four state region has more than 1.3 million young professionals living there. That’s 10% of all young professionals in the country. This compares to 7% of the total population in the country living in the region. Even more astonishing is that New York City has home to more than 650,000 young professionals. That’s 5% of the young professionals in the country choosing to live there. Double its share of the total population of the country. Forty eight percent of the region’s 25-34 year olds with a four year degree or more live in New York City.
That means that New York City alone has roughly double the young professionals residents as the entire state of Michigan: 650,000 compared to 333,000.
So what is it that attracts so many young professionals to the New York City region and city? Certainly not low costs (taxes, housing, cost of living, etc. are among the highest in the country). It isn’t the weather. Nor is it necessarily just a job. Although that matters. The region ranks 39th among the 54 metros with populations of one million or more in the proportion of those with a four year degree or more that are working.
Mayor Bloomberg in a Financial Times column provides an explanation of what matters most to attracting young professionals. He wrote:
The most creative individuals want to live in places that protect personal freedoms, prize diversity and offer an abundance of cultural opportunities. A city that wants to attract creators must offer a fertile breeding ground for new ideas and innovations. In this respect, part of what sets cities such as New York and London apart cannot be captured by rankings. Recent college graduates are flocking to Brooklyn not merely because of employment opportunities, but because it is where some of the most exciting things in the world are happening – in music, art, design, food, shops, technology and green industry. Economists may not say it this way but the truth of the matter is: being cool counts. When people can find inspiration in a community that also offers great parks, safe streets and extensive mass transit, they vote with their feet.
Protect personal freedoms, prize diversity, offer an abundance of cultural opportunities and offer great parks, safe streets and extensive mass transit. That is the priority list if Michigan wants to be competitive in retaining and attracting young talent.
One of the questions I’m now asked most frequently is “how is Michigan doing compared to other states in retaining and attracting recent college graduates?” Good question and encouraging that it is being asked more frequently. Folks seem to be understanding that where recent college graduates choose to live after college matters to Michigan’s future economic success.
To answer the question we gathered data from the American Community Survey from the Census Bureau on where 25-34 year olds with a bachelors degree or more lived in 2011 (latest available) and 2006. We collected the data for each state, metropolitan areas with a population of one million or more and their central city(s). Here is what we found:
- Michigan ranks 13th in the number of 25-34 year olds with a bachelors degree or more (for the rest of the post we refer to this cohort as young professionals) compared to 9th for total population. The state’s share of the nation’s young professionals is 2.5% compared to 3.1% of the total population.
- Michigan ranks 32nd in the proportion of young professionals with a four year degree or more. Compared to 34th for adults 25 and older with a four year degree or more.
- Most worrisome, Michigan is one of only four states to have fewer young professionals in 2011 than 2006. Declining from 346,000 to 333,000. By far the largest numerical decline. 25-34 year olds with a bachelors or more grew nationally by 13.9% from 2006-11. In Michigan the decline was 3.6%.
Nationally young professionals are concentrating in big metropolitan areas anchored by a vibrant central city (in a few metros more than one). Forty two percent of young professionals live in the 10 regions with the largest concentrations of young professionals. And in those top ten regions 35% live in their central cities.
Michigan’s low ranking is primarily caused by neither of its big metros or their central city being a talent magnet. The nine county Detroit CSA ranks, out of 54, 15th in the number of young professionals with a four year degree or more compared to 12th for total population. It is 30th in the proportion of 25-34 year olds with four year degree. The City of Detroit has 11,000 young professional residents. (Chicago by comparison has 250,000.)
The seven county Grand Rapids CSA ranks, out of 54, 48th in the number of young professionals with a four year degree or more compared to 43rd for total population. It is 34th in the proportion of 25-34 year olds with four year degree. The City of Grand Rapids also has 11,000 young professional residents.
New York Mayor Michael Bloomberg in a column for the Financial Times makes the case that talent is what matters most to economic growth. And that place –– particularly vibrant central cities –– is the key to attracting talent. The column is entitled “Cities must be cool, creative and in control”. Worth reading!
Bloomberg writes: “Many newly successful cities on the global stage – such as Shenzhen and Dubai – have sought to make themselves attractive to businesses based on price and infrastructure subsidies. Those competitive advantages can work in the short term, but they tend to be transitory. For cities to have sustained success, they must compete for the grand prize: intellectual capital and talent. I have long believed that talent attracts capital far more effectively and consistently than capital attracts talent. The most creative individuals want to live in places that protect personal freedoms, prize diversity and offer an abundance of cultural opportunities. A city that wants to attract creators must offer a fertile breeding ground for new ideas and innovations. In this respect, part of what sets cities such as New York and London apart cannot be captured by rankings. Recent college graduates are flocking to Brooklyn not merely because of employment opportunities, but because it is where some of the most exciting things in the world are happening – in music, art, design, food, shops, technology and green industry. Economists may not say it this way but the truth of the matter is: being cool counts. When people can find inspiration in a community that also offers great parks, safe streets and extensive mass transit, they vote with their feet.”
Place attracts talent. Talent = economic growth. Hard lessons for Michigan policymakers to learn. But if we want a prosperous Michigan we had better learn them quick.
One Michigan elected official who gets it is Ann Arbor Mayor John Hieftje. In a recent speech to the Ann Arbor/Ypsilanti Chamber of Commerce covered by AnnArbor.com: “One of the gaps weʼve had in Ann Arbor for years and years is we have University of Michigan students who are here but then leave town and then we have people 40 and over raising families,” Hieftje said. “But we need to attract young families and people who are starting their careers here in town.” He goes on to talk about the importance of transit and downtown living to attracting young talent.
The good news is that Ann Arbor is starting to get it. That attracting young talent matters. The not so good news is that Ann Arbor is still uncomfortable with creating high density neighborhoods. In his speech Hieftje expresses this continuing ambivalence Ann Arbor has about higher density. A key to creating the kind of neighborhoods that young professionals –– particularly before they have kids –– want to live in. As I have written before unless Ann Arbor gets over its opposition to high density neighborhoods –– in more than just the downtown –– it is going to continue to struggle to attract young talent at any scale. And as Mayor Bloomberg makes clear, that means less economic growth.
There has been good news on transit for metro Detroit. M1 –– the light rail line from downtown to midtown –– is going to be a major catalyst for future development of greater downtown Detroit. Thanks to the leadership of the Kresge Foundation and Dan Gilbert and Matt Cullen of Quicken (and other philanthropic and business leaders) its going to happen despite all sorts of barriers put up by state and local government along the way. And the Regional Transit Authority is another big step in the right direction. Particularly encouraging is the appointment of Paul Hillegonds (a Michigan Future Board member) as chair.
That said, there is a long way to go. Primarily breaking through the decades long resistance to rail transit for the region. There are two prime reasons given for no rail transit in metro Detroit. (Lets hope we are beyond race which was the major reason we didn’t get a regional rail transit system in the Seventies despite big funding commitments from President Ford and Governor Milliken.)
- There isn’t enough density for rail. Give me a break! Phoenix had density? Most of the regions that have made big investments in rail transit have done so to get density, not to serve density. (For example read this Atlantic Cities article on how rail transit is creating density in Denver.) Buses –– even bus rapid transit –– are primarily to move people. Rail is to stimulate development. High density development. It is the single most powerful lever available to create the kind of high density, mixed use, walkable neighborhoods that every region in American wants because it is where young mobile talent is increasingly concentrating.
- We can’t afford it. Of course we can, if we choose to do so. No region which has embarked on rail transit the last several decades –– and that includes nearly every big metro in the country that didn’t already have a rail transit system –– could afford it with current public revenues. But because their business and political leadership understood that rail transit was an important –– if not an essential ingredient –– to future economic growth, they sold the public, their state and the federal government on the wisdom of new revenue.
What is missing here is widespread regional business and political leadership that understands and is willing to fight for the need for a regional rail transit system. As I asked in my last post the relevant question to ask metro Detroit’s regional and political leadership as well as those state leaders who tell us that the state can’t work unless Detroit works is “how can metro Detroit compete for talent and businesses without a regional rail transit system when their counterparts across the country think rail transit is a central ingredient to regional competitiveness?”