You Cannot Compete in Economic Development Without the Most Important Element — People

By Michael Randle, Editor

Hello to our CEO and site consultant readers. There are all kinds of sales pitches out there to capture your next expansion, startup or relocation. Here are a few from outside the South:

New York (From Empire State Development): “New York State is committed to attracting and aiding in the expansion of businesses to help create jobs, especially leading-edge businesses and manufacturing companies looking to make significant capital investments.”

SB&D’s take: New York is one of the state leaders in the reshoring of semiconductor companies and New York City remains the center of North America’s financial services industry. However, net domestic migration has been negative every year for decades, peaking at lows in the early and late 1970s, and right after 9/11, to net migration record lows in 2020 and 2021. Census estimates that just since 2020, New York has lost 884,000 residents to other states.

If New Yorkers are leaving the state in such numbers, companies looking to locate their operations should certainly ask why. And in a period when labor has essentially vaporized, losing that many from the labor shed should cause an immediate concern to any company wishing to expand, start up or relocate to New York.

Illinois: Chicago is home to many Fortune 500 headquarters, almost all of which are in the Chicago area. But (like New York City), name another city in Illinois that is an economic development dynamo other than Chicago.

SB&D’s take: Illinois is losing population and the losses are not waning. Not unlike New York State, the population losses are increasing with every two-year period. (See chart.) Again, if labor is leaving Illinois in droves and the exodus is multiplying each year, what are the issues that a growing company should be concerned about?

California: The largest state economy in the U.S. has a problem with retaining its citizens. Remember, Toyota relocated its North American headquarters to the Dallas-Fort Worth area because housing costs in Southern California were out of sight when they made that announcement in 2014. The South is home to lots of foreign automakers’ headquarters, including Nissan in Nashville, Mercedes-Benz in Atlanta and VW in Virginia.

The North American CEO for Toyota in 2014, Jim Lentz, cited that he wanted the headquarters closer to the automaker’s manufacturing operations in Texas, Kentucky and Mississippi. He also said in an aside that Toyota headquarter workers who would move with the company to Texas could buy two homes there with the money they make off their homes in California — a permanent home and a vacation home.

Population Losses

2018-2019     2019-2020      2021-2022

New York     

-80,967           -126,355          -319,020

Illinois          

-57,668           -79,487            -104,437

California    

-53,502           -12,280           -398,295

So, when scouting a location, look carefully at population gains or losses. When the number of available jobs are sometimes double the number of unemployed in this nation, look at things on the local level. . .you know, where your interests lie.

According to the Census Bureau, the U.S. population grew by 1.6 million from the summer of 2022 to the summer of 2023. The South accounted for almost 87 percent of that population growth, or 1.4 million of the 1.6 million. That is unheard of, or is it?

U.S. Regional Populations

Region           1960                   2022       

South               50 million        128 million

West                26 million          74 million

Midwest         52 million           69 million

Northeast      50 million           57 million