The End of Job Growth

Pew Charitable Trusts recently posted an analysis of population projections that show several states with stagnant to declining workforces.

This means that for nearly 20 states, it’s basically impossible to add jobs in the future. How can you add more jobs with fewer workers?

That doesn’t mean there won’t be cyclical ups or downs or that some slack in the system might be taken up with some growth, but overall, stagnation to decline in jobs is going to follow.

Pew’s article mentions states fighting to retain a high skill labor force, but this doesn’t seem very likely. Most of these places are in the north and northeast and have been stagnant for a long time.

What’s going to change the migration of population to the South and West? While change is always possible, it’s not obvious what might cause it.

Cities and states need to think hard about what this means for them. It seems to me is that one effect will be to fuel intrastate divergence, as success pools into islands in an era of overall shrinkage. You can argue we’re already seeing this.

For most localities who aren’t among the favored winners, the reality is that they need to do what I advocated for Buffalo, and find a new psychology of civic improvement that isn’t rooted in growth – in population, jobs, or building stock. (I should add, Buffalo is in a far better position than most and could enjoy a relatively bright future – but it probably won’t be a big growth story)

This won’t be easy.

One of the great assumptions of the American worldview is the equating growth with success in our communities. Communities that are adding people, adding jobs, building new things, etc. are seen to be succeeding, whereas shrinking or stagnant ones must be failing.

Everybody believes this. Even those who talk about “growth without growth” or tout increasing per capita income as the real measure of economic development invariably tout growth if there’s a figure that shows it.

Lots of urbanists like to pooh-pooh Texas growth, but when 60,000 people move into downtown Chicago, or transit ridership soars in New York, or tech jobs explode in the Bay Area, they immediately tout and trumpet those figures as signs of success.

And good for them. The point is that we all view growth as the measure of success.

What would a new psychology look like?

One example would be the boutique model. Rather than trying to be bigger, you become more exclusive. This isn’t a model that’s applicable to these stagnant places however.

More realistically, these places need to focus on healing from or managing their problems (including managing decline in some places like rural communities).  Some areas of focus:

Not easy, and realistically requiring outside financial and technical assistance.

What’s more, this is a to do list, not a psychology of success. How can one begin to articulate a positive, affirmational view of a place’s future that captures some program like this?

Perhaps there are other ways to think about this too. Please share thoughts in the comments if you have them.

The key is that with a shrinking working age population, there’s little prospect of job growth. So any governor in one of these places who has that as a long term economic objective is bound to be frustrated. This is a reality that will have to be faced.

Aaron M. Renn is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and an economic development columnist for Governing magazine. He focuses on ways to help America’s cities thrive in an ever more complex, competitive, globalized, and diverse twenty-first century. During Renn’s 15-year career in management and technology consulting, he was a partner at Accenture and held several technology strategy roles and directed multimillion-dollar global technology implementations. He has contributed to The Guardian, Forbes.com, and numerous other publications. Renn holds a B.S. from Indiana University, where he coauthored an early social-networking platform in 1991.

Top map image via Pew Stateline