It may be smart, it may be progressive, but it isn’t growth

Originally written June 2, 2006. Published in the Ames Tribune

Missing in the debate over how or whether growth should be managed in the Ames economy is any analysis of how or whether the Ames economy has grown in the past. By almost any measure, local economic growth has been slow, not just recently but over the past 35 years. This slow growth is particularly surprising in that Story County is blessed with many of the factors that have been attached to growth more generally, including proximity to a metropolitan area, presence of an interstate, and the presence of a major research university. Once the dust settles on the debate of whether local growth should be smart or progressive, perhaps we will turn our attention to the more fundamental question of why we haven’t experienced growth in the first place.

In 1969, Story county employment lagged Johnson County (Iowa City) by 17% or a little less than 5,000 jobs. We now lag Johnson County by 75% or 41,500 jobs. In fact, on every metric, whether population growth, income growth, wage growth, or per capita income growth, growth in Johnson County has outpaced growth that in Story County, even though geographic factors are virtually identical to those in Story County.

When we compare Story County to other Midwest counties housing public universities, Story county growth ranks among the lowest. Even Riley County in Kansas, which lost 10% of its population when Fort Riley cut back operations, has had faster employment growth than Story County. When we compare Story County to other counties adjacent to Des Moines, Story lags Dallas, Polk and Warren and dominates only Jasper.

Slow growth has real consequences. Story County aggregate income was 16% smaller than Johnson County in 1969 and is 60% smaller now. To the extent returns to scale are important, greater aggregate income attracts more growth. Everything from civic and cultural programs to infrastructure development to retail, service and entertainment offerings can be offered more efficiently at larger scale. Story County’s faster-growing southern neighbors have become more attractive, not just in competing for national retailers but also for touring musicals and corporate headquarters. Story residents are increasingly going to be looking to the Des Moines area, not just for shopping, but for entertainment, culture, and employment.

There is nothing inherently wrong with growing more slowly than comparable counties as long as we recognize the slow growth and are satisfied with the pace. However, proponents on either side of the debate should recognize that what we have had may be relatively smart, or it may be relatively progressive, but it has not been relative growth.

Note all data used in the charts below are from the U.S. Department of Commerce, Bureau of Economic Analysis