Millennials will drive Great Lakes states' comeback
Though the Rust Belt’s Great Lakes region — Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin — is often used as an example of the decline of the manufacturing economy, a new report from the Urban Institute suggests that foundations are in place for a reversal, but young people hold the key.
The region lost 1.6 million manufacturing jobs between 2000 and 2010. The region added back 1.2 million jobs from 2000 to 2015, but most were low-wage. Median income fell more in five of the six Great Lake states than the U.S. overall. The economic strain has had an impact on population, with anticipated population growth of just 6% through 2040, compared to 21% nationwide, according to CityLab.
Population woes are a hurdle to the region’s recovery, as the report indicates that job opportunities can’t grow if there is no one to take them. The report recommends targeted investments to keep young families in the area, welcome and integrate immigrants and their children, prepare young adults for the labor force, and, as manufacturing will still be a source of jobs, use workforce development to advance worker skills.
While other areas of the country are steadily recovering from the housing crash, the improvement has been slower in the Great Lakes region. In the first quarter of last year, the Rust Belt replaced the Southwest and Southeast as the leader in underwater homeowners, according to analysis by Zillow.
As the Urban Institute report indicates, hope for the region lies in its youth, and other Rust Belt cities are proving just that. Pew reports that Rust Belt cities outside of the Great Lakes region, such as Baltimore and Pittsburgh, are seeing increased interest among young people, particularly those who are part of an educated workforce. A big driver are the cities’ more affordable housing costs, and a lower cost of living in general, compared to metro areas such as San Francisco and Seattle.
As the UI report also suggests, a proactive approach is needed, and Pew’s study reveals that too, highlighting, for example, how St. Louis is helping its tech companies with advice and funding, as well as adding millennial-friendly amenities such as dog parks and coffee houses. Pittsburgh has increased its downtown apartments and public spaces.
These are on top of other key elements attractive to young potential home buyers: lower median housing costs due to existing inventory there combined with less traffic congestion and lower taxes. If these trends continue, perhaps an infusion of remodeling dollars and even new development may not be far behind.
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