Reality Check

The latest census information sounds alarm bells for Iowa.  Iowa’s population declined again in the most recent annual data, due to people leaving our state.  This marks nine of the past ten years where more US born Iowans moved out of our state than moved into our state.  While we are not the worst state for population contraction, we are firmly in the bottom half.  And two trail signs indicate it will get worse over time if we don’t change the trajectory.  We are older than most states, the proportion of Iowans’ dying off annually ranks among the highest third of states.  And our rate of babies being born is in the bottom half of states.  Iowa has a very significant population problem, and a disastrous population problem outside of our main population centers.

There is a narrative around population and demographics that has received play this past year – one that says America’s large cities are facing collapse under the burden of riots, anarchy, homelessness and people are fleeing the cities.  An adjunct to this narrative is that such a trend and ability to work from anywhere will be an answer to the population problem in rural states.  This chatter resonates in places with lower population density, like Iowa where I live.  In fact, this narrative is false.

Job growth is a key measure of vibrancy, economic activity and attractiveness.  Here are some of the findings of a McKinsey study on job growth and demographics:

• America has experienced robust job growth over the past decade plus. 
• 35% of all jobs created were added in Mega-cities.  Mega-Cities are the very biggest American cities and include places like San Francisco, L.A. and Chicago. 
• Another 18% of all the jobs created were in High Growth Hubs.  High Growth Hubs are 50 or so big cities with growing economies that include Seattle, Portland and Austin.
• The 60 or so communities included in the two categories above account for the majority of job growth in America and comprise about 30% of our U.S population. Those cities are dramatically outperforming the rest of the country in economic vitality.
• The Urban Periphery, areas outside the metro areas included above, accounted for 23% of jobs added in the decade.  Urban Periphery has about 16% of the U.S. Population. 
• A larger group of Stable Cities, places like St Louis and Cincinnati, where 25% of US population resides, contributed to only 8% of the jobs added in the decade. 
• Everywhere else in America accounted for only 7% of the new jobs created, despite being home to 30% of the current US population.
• McKinsey’s projections indicate more of this same pattern over the next fifteen years.  Population growth, job growth and economic success tilt heavily toward urban areas. 

The places that are winning are communities where young people want to live.  These places have the amenities young people and young families desire.  They also have the advantage of scale and concentration.   It’s easier for companies to grow in these places because they have a concentration of talent, of investment capital, of business infrastructure and the diversity many desire.  Don’t grieve for places like Portland and Seattle, and definitely not San Francisco and LA.  In truth, these places are thriving growth engines well positioned for the future.  They possess the attributes required for job creation and economic prosperity including clustering of talent, educated populations, tremendous energy around innovation and start-up culture. 

It’s the rest of us that need help.  We all have advantages of some sort, but they are fewer and usually less critical to the future economic growth.  Iowa, we have lots of work to do.