An interesting article/policy paper (Dayton, Youngstown: insurance, houses, employment)

[dxdtdemon]

I don't usually read the Dayton Daily News, but the economist interviewed is a friend of a friend. I've also provided the link for the policy paper referenced in the article.
Economist says Dayton can get its mojo back l Dayton Jobs

https://www.mercatus.org/system/file...ercatus-v3.pdf

[ohio_peasant]

Fascinating article – thanks for the link! But the article raises some poignant questions….

1. If the seeds of relative decline were sowed as early as the 1930s, what were these seeds, and why did it affect Dayton more than it did comparable cities?
2. If racial segregation was due largely to federal housing policies and to migration patterns from the South to the North, again, why was it Dayton that was so starkly affected, by a trend that ought to have been national?
3. As the pioneering-generation of Dayton’s innovators retired and died off (1930s-1940s), there wasn’t a successor-generation to replace them. Why not?
4. Dayton scores towards the bottom Ohio-wide, in the proportion of college-graduates. Why? Is it because of 20th century migration patterns?

[SWOH]

I am looking forward to being able to read this article sometime soon... it does look fascinating from the Abstract.

ohio_peasant brings up a lot of good points that center around one basic question... why did these economic trends hit Dayton so much harder than comparable cities?

I think the answer lies in what the region's workforce was doing in 1950. I do not have the ability to pull the figures right now, but if I were to bet I would bet Dayton's workforce in 1950 is almost a mirror image of what the workforce in Detroit and Flint was doing in 1950, with maybe a slight deviation to federal work due to WPAFB. We didn't hit bottom as quickly as the steel towns of Youngstown and Pittsburgh, we are an auto town so our decline was a lot slower and more beleaguered. Just like it was in Detroit. But like Detroit, knock on wood, things seem to be coming back in the center city and a few neighborhoods, even as other neighborhoods continue to hold steady and yet more neighborhoods and suburbs are declining in turn.

As to why we aren't developing new talent, I would ask in return what the hometown is of Silicon Valley's top 500 entrepreneurs. I'd be willing to bet at least 90% of them are not even from the Bay Area, and probably more than 70% never even grew up or went to college in CA. We live in a global world, where people with ideas have to go to where the best resources are located to stay competitive. I'm not saying we do not have great resources here (we do) but communicating what we do have here to offer has always been a struggle. And that's a battle that no one even conceived in 1908 or 1938. Our world has changed.

[CarpathianPeasant]

Originally Posted by SWOH

I am looking forward to being able to read this article sometime soon... it does look fascinating from the Abstract.

ohio_peasant brings up a lot of good points that center around one basic question... why did these economic trends hit Dayton so much harder than comparable cities?

I think the answer lies in what the region's workforce was doing in 1950. I do not have the ability to pull the figures right now, but if I were to bet I would bet Dayton's workforce in 1950 is almost a mirror image of what the workforce in Detroit and Flint was doing in 1950, with maybe a slight deviation to federal work due to WPAFB. We didn't hit bottom as quickly as the steel towns of Youngstown and Pittsburgh, we are an auto town so our decline was a lot slower and more beleaguered. Just like it was in Detroit. But like Detroit, knock on wood, things seem to be coming back in the center city and a few neighborhoods, even as other neighborhoods continue to hold steady and yet more neighborhoods and suburbs are declining in turn.

As to why we aren't developing new talent, I would ask in return what the hometown is of Silicon Valley's top 500 entrepreneurs. I'd be willing to bet at least 90% of them are not even from the Bay Area, and probably more than 70% never even grew up or went to college in CA. We live in a global world, where people with ideas have to go to where the best resources are located to stay competitive. I'm not saying we do not have great resources here (we do) but communicating what we do have here to offer has always been a struggle. And that's a battle that no one even conceived in 1908 or 1938. Our world has changed.

The one critical point left out of this is that until about 1950 neither travel nor communications were anything like they are today. You could have a car that got you somewhere in, say, 1943, but the gasoline to use it was rationed, so you didn't go anywhere you didn't absolutely have to go.

[SWOH]

^That is true. In the past people were limited to their hometown, so no matter what if they were going to make something great they had to do it close to home unless they were willing to leave everything they knew behind.

Now the best and brightest are poached to go to the highest bidding companies, startup incubators, most prestigious Fed/Ed/Med jobs, etc. They leave without a second thought because they can hop on a plane to get home in less than a day or Skype in an instant.

And unfortunately the cold humid weather here and elsewhere by the Great Lakes has distinct disadvantages. It's hard to beat a nice sunny beach, beautiful mountains, maintenance free arid desert houses, or perfect 65 degree weather year round. That's what the rust belt is really up against.... that and years of free Federal money to the southern states at the expense of prosperous northern states.

[ohio_peasant]

And another point, is that even circa 1950, so much of economic activity had to do with agriculture or heavy industry, to both of which the Midwest is exquisitely well-suited. Indeed, these activities work better with a grid of small/medium cities, rather than a few glamorous/massive cities. Now the whole premise of the Midwest is being challenged by the post-industrial (for lack of a better term) revolution. The biggest cities can still prosper (assuming good governance!) using what might be termed cultural capital, for example by attracting corporate headquarters. But the second-tier cities can a best tread-water… and that is, again, assuming good governance.

The article reiterates that it is unusual and improbable for a declining city to reinvent itself as a trendy center for entertainment. Micro-brews or sports-stadiums are a fine thing to enrich the lives of the locals, but they’re not a mainstay of the economy. Neither presumably is the presence of such things going to sway major employers to relocate to a city having said features, vs. a competing city that lacks them. The article’s point, then, is that public investment in such amenities is costly (whether in taxes raised to pay for stadiums, or tax-breaks for micro brews to rehab dilapidated old buildings), ultimately with low return. Neither is the real issue about the city-center vs. its suburbs, about vibrant new suburbs with less onerous zoning-laws and lower local income taxes; though of course, those things do help.

Whether in downtown Dayton, the West side, or Springboro or Vandalia or Xenia, what we need ideally is to grow (or to relocate) massive, global-scale corporate employers. We need an Amazon/Boeing/Microsoft right here, employing 200,000 people directly, and n-times more indirectly. That is what is ultimately going to turn things around. Lower taxes, better schools and a more vibrant downtown certainly help – but only so much.

[SWOH]

Originally Posted by ohio_peasant

Whether in downtown Dayton, the West side, or Springboro or Vandalia or Xenia, what we need ideally is to grow (or to relocate) massive, global-scale corporate employers. We need an Amazon/Boeing/Microsoft right here, employing 200,000 people directly, and n-times more indirectly. That is what is ultimately going to turn things around. Lower taxes, better schools and a more vibrant downtown certainly help – but only so much.

I'd agree, to an extent, but economic diversity is really key.
We are better off with 10,000 20-person companies than one company that employs 200,000 (which is an unthinkable # of employees in one spot tbh... GE's entire workforce isn't much more than that at 300,000 people. Google only employs ~25,000 last time I checked.

[ohio_peasant]

Originally Posted by SWOH

I'd agree, to an extent, but economic diversity is really key.
We are better off with 10,000 20-person companies than one company that employs 200,000 ....

That’s hard to say. Though my “idea” of a few mega-employers is woefully impractical, the appeal is in the economy of scale. If we have 10,000 small businesses of 20 people each, what would these businesses do about health-insurance? Would they be able to offer, say complementary gym memberships, or child-care, or the myriad other perks that not only entice potential employees from distant locales to relocate here, but also support the local retail establishments, that in turn would offer employment to persons without advanced education or particular skill? The big utility of employers like Google or Amazon is that they not only offer high pay to their employees, but that they pull along the rest of the economy. WPAFB does that, to some extent; without it, there would be no modern Dayton… and certainly no modern Centerville or Beavercreek. We need more such giants. How to attract them? Can it even be done at all, assuming the best possible local government, with the wisest leadership?

[weatherphotographer]

Originally Posted by SWOH

I'd agree, to an extent, but economic diversity is really key.
We are better off with 10,000 20-person companies than one company that employs 200,000 (which is an unthinkable # of employees in one spot tbh... GE's entire workforce isn't much more than that at 300,000 people. Google only employs ~25,000 last time I checked.

I've heard the horror stories of parking at the old Delphi on N Dixie. Suppsoedly you'd need to arrive an hour early just to get a space

[SWOH]

Originally Posted by ohio_peasant

That’s hard to say. Though my “idea” of a few mega-employers is woefully impractical, the appeal is in the economy of scale. If we have 10,000 small businesses of 20 people each, what would these businesses do about health-insurance? Would they be able to offer, say complementary gym memberships, or child-care, or the myriad other perks that not only entice potential employees from distant locales to relocate here, but also support the local retail establishments, that in turn would offer employment to persons without advanced education or particular skill? The big utility of employers like Google or Amazon is that they not only offer high pay to their employees, but that they pull along the rest of the economy. WPAFB does that, to some extent; without it, there would be no modern Dayton… and certainly no modern Centerville or Beavercreek. We need more such giants. How to attract them? Can it even be done at all, assuming the best possible local government, with the wisest leadership?

True... a large number of small businesses would not have the on-site kitchens, gym memberships, child care, etc. of the 800-lb gorillas like Amazon and Google.

The hope would be that having a solid network of small businesses would incubate them, and hopefully some would become medium sized or big, like Stratacahce and Teradata have done.