Population Growth Leads to Greater Economic Growth

Do jobs follow people or do people follow jobs? Is the answer to a city’s economic problems as simple as attracting new people and growing your population? Is this a case of “if you build it, they will come” or does it get a little more complex than this? The New England states and Rust Belt region have been hurting from next-to-stagnant population growth. Rhode Island and Michigan even have negative population growth. Reversing a trend like this takes a multiplicity of extraneous factors that encompass all aspects of sociology and economics.

People Need Jobs, Jobs Need People

As far as a city or town is concerned, people are money. People work at jobs, pay taxes, and buy things (anything really; Bottled Air® isn’t too far off in the future). They also pay for housing, tolls, and insurance. This is precisely what they want to hear at the mayor’s office–people spending money. After all, one person’s expense is another’s income. Even though the expense of human services of various types is needed by any population, the idea of a cooperative working society should provide that the positive output of citizens outweighs their costs on the government. If not, cities go into bankruptcy–which threatens many cities across the U.S. who just can’t balance their books in this trying economic climate. Now that we acknowledge the positive economic influence caused by people themselves, given that they are productive and spend part of what they earn, the next thing to figure out is how to attract them to a city.

There are as many ways to get people to move to a population center as there are people. This is because, for the most part, society is made up of individuals. Someone might even move to a certain place just because they like the food or weather. It’s difficult to determine outliers like this so I will just focus on broader concepts.

First off, people like money. How do people usually get money? Jobs. Starting a business or relocating costs one a lot of money. So much so that state governments often need to offer subsidies or tax breaks to assist in this process and to bring in jobs. Competition between states for business amounts to bloody tax and subsidy battles to attract or steal away relocating or start-up businesses. Cities near state lines need to compete with the regulations and tax codes of their neighbors. In New England, states are so close to each other that many people opt to live in one state with a favorable cost of living and work in another state with an abundance of jobs. This is common between Rhode Island and Massachusetts. It’s cheaper to live in Providence than Boston, which is only a quick train ride away. On the other hand, if there is a solid base of college graduates in a given area, businesses can move in to take advantage of an educated pool of workers. This pretty much works in cities where higher education is a large sector because people don’t tend to sit around on their degree, twiddling their thumbs and waiting for something to happen.

Is the Cost of Moving Worth the Trouble?

A great job opportunity in another state conjures up a sense of accomplishment and joy. After the reality of uprooting sets in, however, choices need to be made about living arrangements. When you take into account that people will have or want to start families, many factors come into play in the standard of living. Will my children have a place to play? Can I afford the area? Is this neighborhood walkable? Is there anything to do besides work and sleep? How are the schools?

Finding innovative ways to improve school districts and make them top notch is at the top of many government’s lists. Strategies include dividing up larger schools into smaller ones with more manageable class sizes, allocating federal funds, new technology, and faculty reevaluations, in which I presume they take several tenured teachers and force them to fight to the death in an arena for job security.

Effective public transit and parks are infrastructure requirements for modern cities that know what they’re doing; not that these things didn’t exist before the suburban exodus following World War II. Dance clubs, bars, conventions, and cultural events are important social facets to city life. Without fun, what’s life worth living for?

Making your city desirable compared to surrounding towns is difficult to calibrate. But if the costs outweigh the benefits, then people will opt to live somewhere else, as simple as that.

Let it Be Known… “This is a Great Place to Live”

Advertising, in the traditional and non-traditional senses, informs people that a place even exists at all. The traditional sense is actual advertising. For example, California has nationwide commercials for tourism. The state hopes that people will go to California for vacation and love it so much that they relocate. The non-traditional sense is having attributes for your city that can be boasted about. This is not a time to be humble. The village of Alton Bay, New Hampshire has a small airport made of ice in the winter on the surface of the bay. But you probably didn’t know that because you don’t see them running around bragging about it. Boasting about a high performing school system or an airstrip made of ice, if you’re all about that sort of thing, shows that you have superior assets superior to those of other places in the region, or even the rest of the country. Miami has its beautiful beaches, New York City has diverse culture. These are both factors leading to increased tourism and ultimately new residents for these places.

If I sound like a dating coach for cities, the parallels are certainly there. With a new haircut (new jobs), great hygiene (infrastructure), and a confident attitude (civic bragging rights), you’re ready to go out and mingle to find the person of your dreams (exponential population growth, economic prosperity, and capital investment spurred by the coalescence of all previously stated factors). These are all tools that cities with stagnant economies and populations could use to fight decline and ultimately succeed.

 

By Nicholas Cataldo

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Filed under Economic Development, Featured

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