As Washington state opens close to normal, we’ll see how well it can mend its wounds from the pandemic. The same uncertainty prevails across coastal America in the cities that were the pre-pandemic economic leaders.
Yet one thing that’s already becoming clear: The pandemic isn’t going to save the heartland by jarring loose companies and high-skilled workers from superstar cities such as Seattle in favor of Cincinnati, St. Louis and other places left out of “winner take all” urbanism.
Even the Brookings Institution, among the critics of “excessive concentration” of economic assets, just threw in the towel.
Brookings researchers led by Mark Muro found that prized coastal corporate relocations went to “secondary tech centers” — Austin, Texas; Denver; North Carolina’s Research Triangle Park — rather than to ailing Dayton, Ohio.
Also, the numbers don’t support the narrative that the “COVID-19 pandemic has created a massive pool of footloose workers who are rapidly exiting the big coastal tech hubs and heading for the heartland, where they will boost the inland economy.”
For example, out of a total 700,000 moves from the Bay Area in 2020, only 12,000 address changes were filed for 19 “classic heartland states.”
Data from the Postal Service and real estate firm CBRE indicated 479,785 outbound moves from metro Seattle this past year. But only 28,192 went to mountain or heartland states. Seven superstar metros logged a total of nearly 4.7 million outbound moves. Yet fewer than 198,000 went to mountain or heartland states.
The Brookings report concludes, “This suggests that for all the discussion of new work patterns and possible relocations for millions of professional workers, fewer and fewer will be fully footloose in the coming years, as remote work settles into a new level that will be higher than the pre-pandemic norm but lower than now.
“All of which is to say that most heartland cities should not hold their breath for quick, migration-driven turnarounds generated by the arrival of new tech or professional workers from the coasts.”
To be sure, we don’t know how the post-pandemic world is going to be shaped.
As recently as early this year, some were doubling down on the prediction.
Writing earlier this year under the headline “Superstar Cities are in Trouble,” the Atlantic magazine’s Derek Thompson argued that remote work would mark a new industrial revolution that would send high-performing metros into decline.
Yet, he wrote, “Superstar pain could be America’s gain — not only because lower housing costs in expensive cities will make room for middle-class movers, but also because the coastal diaspora will fertilize growth in other places.”
The data doesn’t support this.
As my colleague Gene Balk reported, Seattle was the fastest-growing big city in the pandemic year 2020.
The revenge of the heartland has always had the element of a morality play. As if the superstar cities had inflicted the troubles elsewhere. And now they were going to reap the whirlwind. But so far it’s barely a breeze. The gains in places such as Austin might have happened even without the pandemic. We’ll never know.
In reality, industries have always concentrated, leaving winners and losers.
Chicago became the nation’s railroad capital in the 19th century and continues to be so today. Pittsburgh cornered steel. The nascent automobile industry grew from a dozen aspiring centers to become concentrated in Detroit. New York cornered banking and finance.
The oil industry made its center in Houston, which bested Tulsa, Oklahoma, for the crown. Before Puget Sound became a world-class aerospace hub, Southern California was home to a huge aviation cluster.
In all these cases, geography, innovation, boosterism and luck played big roles. So did the exponential growth of these key sectors once these older “superstars” had established themselves.
But these examples were also different from today’s technology economy.
For one thing, the sectors created often widespread prosperity well beyond their central core.
The auto industry, for example, built assemblies across the country, eventually with hundreds of thousands of well-paid union jobs. The great inventor Charles Kettering founded the Dayton Engineering Laboratories Co. to serve the industry. It became General Motors’ Delco. As late as the 1980s, Dayton boasted the second largest number of GM employees in the world (today it has virtually none).
Before lax antitrust enforcement, cities of any size had their local banks, department stores, railroad operations, and many hosted airline hubs (Dayton was a Piedmont Airlines hub) and headquarters of major corporations (Dayton was home to National Cash Register, later NCR, and Mead paper, both moved away).
Now these economic crown jewels are long gone from most heartland cities.
Bad luck, technological changes and corporate betrayal were to blame, but also bad policy and not only antitrust or even trade’s effect on manufacturing. Some of the wounds were self-inflicted. No wonder most of the 240-plus localities competing for Amazon HQ2 never stood a chance.
Much of the heartland prized tax cuts, hurting education funding and investments in future-leaning projects. The state of North Carolina spent years building the Research Triangle, anchored by three major universities. Ohio failed to do so.
Today, when Big Tech spreads its wings to places without enough talent, universities, quality of life and tolerance it means low-end operations such as data centers, call centers and Amazon warehouses. All are considered big economic wins in “loser” locations, but they’re not equal to the widespread benefits of the old industries.
So far, remote work and migration haven’t fixed this challenge. But it’s easier to imagine a magical solution from the pandemic than doing the heavy lifting of rebuilding the heartland.