A new study confirms without question that areas with a stable population outperform areas that are growing. Furthermore, the higher the rate of growth, the lower the economic prosperity! Given the increasing scarcity of raw materials and other environmental limitations, the “Old West” model of boom town prosperity truly is history.
Metro areas in the U.S. with a stable population have proven growth is not the path to prosperity. Eben Fodor, community planning consultant and author of Better, Not Bigger, has just released a study comparing the fastest-growing metro areas of the U.S. with the slowest-growing, to test conventional wisdom that cities benefit from growth. This study ought to put the final nail in the coffin of the “grow or die” myth that misinforms public policies in many cities and towns. Unfortunately, in Chelmsford this myth is very much alive and well.
According to the study, “The slowest-growing MSAs (Metropolitan Statistical Areas) outperformed the fastest-growing in every category. The 25 slowest-growing MSAs averaged almost 1% lower unemployment rates, 2.4% lower poverty rates, and a remarkable $8,455 more in per capita personal income in 2009. They also had larger income gains from 2000 to 2009 and saw significantly lower declines in income from the recession (2007-09).”
The study examined the 200 largest MSAs in the country, so the data was not selectively filtered. This puts the lie to statements by Paul Cohen that such studies “aren’t applicable to Chelmsford,” and by Community Development Coordinator Evan Belansky that “the studies are biased.” These two management professionals are among the first to be aware of such research, and have always been the last to acknowledge – in fact have never acknowledged – that stability is the more effective path to prosperity as well as preserving quality of life.
The myth that growth leads to prosperity was irrefutably busted by this study, which revealed a decline of almost $2,500 in per capita income for each 1% increase in growth rate. A metro area with a stable, non-growing population would tend to see a 43% higher income gain than an area growing at 3% per year. And faster growth did not correlate to lower unemployment.
This takes the wind out of the sails of many local economic development bodies that do the bidding of growth profiteers (developers, real estate lawyers, realtors specializing in new construction, mortgage bankers, etc.). The job creation mantra is used by politicians to justify construction projects that benefit the special interest growth industry. Boosting an area’s population increases demand for new homes, mortgages, freeways, etc. And continued construction is said to “create jobs.” But as we’ve seen in Chelmsford, it tends instead to bring “for lease” signs and traffic jams.
According to Fodor, “There is no clear employment benefit shown from faster growth. There may be new jobs created as a result of growth, but apparently there are more newcomers and job seekers moving in than there are new jobs being created. The result is that local unemployment rates remain more or less the same, but the number of unemployed people increases with growth.” This is in direct opposition to the policy statements of Chelmsford’s own Town Manager as well as the Economic Development Committee, which to date has touted growth as the chief engine of prosperity for the town.
The data show the fastest-growing metro areas were hardest hit by the recession. Many of the fastest-growing MSAs from 2000 to 2009 had income declines of 6% during the recessionary period from 2007 to 2009. Slower-growing areas fared much better. Many areas with stable or declining populations actually saw increases in personal income.
The recession figures make it clear that the collapse caused the growth addicts to crash. Those not addicted to growth fared much better (such as the state of Massachusetts in general and Middlesex County in particular).
Finally, the Fodor study found higher growth rates correspond to higher poverty rates. Strike three for the growth=prosperity myth.
The study, Relationship between Growth and Prosperity in 100 Largest U.S. Metropolitan Areas, compared the 25 fastest-growing metro areas with the 25 slowest growing. For more information and to view a short video interview with Eben Fodor, click here.
Yours with best wishes and hope for the future of our town,
Roland Van Liew