Linda Burns

I recently came across the State of Metropolitan America, an enlightening assessment by the Brookings Metropolitan Policy Program on the decade of the 2000s and the 2010 Census. Having spent years doing research while pursuing a doctorate in anthropology from Southern Methodist University, I tend to be drawn to studies that take a holistic approach to analyzing our economy. I find these to be the most valuable when advising corporate site location or economic development clients on the economic viability of regions, suitability of workforce, and targeted industry recruitment.

This particular assessment discussed five new realities that have impacted, and will continue to impact, corporate location decisions, both in terms of workforce availability and real estate development. In terms of workforce, the new realities are: We’re getting older, much more ethnically diverse, and our average household incomes are lower and more polarized—the latter impacted by the recession. The 2000s marked the first census decade on record in which real median household income declined.

More than one third of U.S. adults held post secondary degrees in 2008, up from 25 percent in 1990, an important factor that helped to propel our economic growth. However, the 2010 Census indicates that younger adults in metropolitan areas are not following suit—a disturbing trend that could seriously impact our workforce. Outward migration from metro areas continues, growing at the rate of three times that of the urban core. This factor will continue to have a significant impact on our site decisions and associated real estate development.

Another future U.S. workforce consideration is that the 2000s were the slowest decade of population growth in 70 years, slightly less than the 1980’s and significantly below our 13.2 percent growth rate of the 1990s. The good news is the Sunbelt continued to be the beneficiary of the most growth. The lower 9.7 percent rate was primarily due to reduced immigration—likely due to homeland security concerns—and aging baby boomers growing out of their child-bearing years.

Those of us in the “mature” population are increasing everywhere, with our 45+ population growing more than 18 times the rate of the under-45 population in the 2000s. With more than half of our voting-age population at least 45 years old, we should expect to see public policy increasingly adapting to our aging population’s needs in this decade. With 92 percent of our growth non-whites, primarily Hispanic and Asian, and 50 percent of births now non-white, we are quickly transitioning to a “majority-minority nation.” We’re going to need to re-think all those real estate construction RFP’s and other forms that inquire about “minority participation.”

Another factor that will impact real estate development planning and potential hiring is reduced interstate migration. The study points out that interstate migration slowed due to slow employment gains and the rise in home foreclosures. This affected college graduates and young adults—groups usually among the most mobile, who tend to be the lifeblood of the labor force and responsive to shifts in the growth industries national job networks.

This is also indicative of young adults encountering a brutal job market, as many remained living at home with their families. It was encouraging to see that although slow, two Texas cities, Dallas and Austin, joined Denver as the top three metro areas gaining the most young migrants.

States and metro areas that have relied too heavily on in-migration for growth will need to re-focus their economic development recruitment/retention efforts to diversify their economies to create more job opportunities, and related training, for residents. The slowdown may actually provide windfall population gains, or at least retention, for those metro areas historically experiencing loss due to residents migrating elsewhere for employment.

With well thought-out, targeted industry planning; adoption of flexible economic incentives and training fund programs; and targeted marketing, they could set the stage for growth.

Click here for more information on the Brooking report.

Linda Burns is a national site consultant out of the Dallas area who specializes in incentive negotiations and economic development location strategies. Contact her at linda@burnsdevelopmentgroup.com