Sunbelt Burnout

By: - March 26, 2010 12:00 am

For the past four decades, ever since Kevin Phillips coined the term in his 1969 book,”The Emerging Republican Majority,” most Americans have known what the Sunbelt is. It is the huge swath of territory running south along the Atlantic from the southern border of Virginia to Florida, then west to Texas and all the way to California.

It is the part of the country where population has been growing, jobs have been relocating, and people of all kinds have come to seek out a warmer, better life. It is the counterpart of the Frostbelt, the stretch of northern industrial America that went into decline even as the Sunbelt prospered.

Over a generation, the demographic changes are not only easy to document-they are staggering. In 1960, New York’s population entitled it to 45 U.S. House seats, and Pennsylvania had 33. California had 30 seats and Florida eight. In the Congress that sits today, California has 53, New York 29, Florida 25 and Pennsylvania 19.

But it has not just been a matter of population; it has been a matter of economic resiliency. The high-tech industries, newly lured manufacturing plants and the tourism and development industries have largely cushioned the Sunbelt states against the most serious ravages of recession. The Sunbelt has not been uniformly prosperous-the Deep South still comprises America’s poorest geographic cluster-but the Sunbelt as a whole has recovered from economic hard times faster than other parts of the country. In the recessions of the early 1980s, early 1990s and early 2000s, it was places such as Florida, Texas, Arizona and California that led the country out of the doldrums. It was Ohio, Pennsylvania and Michigan that continued to be plagued by uncomfortable levels of joblessness even after the recession had technically come to an end.

Those facts are indisputable. But they no longer apply quite the way they did in the late 20 th century. The Sunbelt is not, as a whole, coming out of the recession faster than the rest of the country. And its subregions are behaving in strikingly different ways.

Last week, the Brookings Institution issued its most recent update of what it calls the “Metro Monitor,” its regular analysis of economic trends in metro areas of states around the country. When you plot the Metro Monitor on a map, you notice extraordinary things. For example, in examining employment data for December 2009, the colored dots on the map show almost precisely the opposite of the now-conventional wisdom about a vibrant and resilient South and West. The red and orange dots that signal above-average unemployment begin to appear just when you move south of the Virginia border. They become ubiquitous in Florida, where almost every metro area is in the highest national quintile in joblessness, and they don’t get much better in Georgia, Alabama or Tennessee.

When you cross into Louisiana, and especially Texas and Oklahoma, the picture changes dramatically. Unemployment is well below average in virtually every Texas metro area and reasonably low in Arizona and New Mexico. Then it spikes again in Nevada and California, where there isn’t a single metro region doing as well as the national median in unemployment rates.

If you choose another measure, the one Brookings calls “overall performance,” you get a very similar picture: North Carolina shaky, Georgia and Alabama weak, Mississippi and Texas strong, and California abysmal. The only difference from the other map is that Arizona and some of the other Mountain states, which fare relatively well when the only criterion is jobs, look very weak when gross metropolitan product and housing prices are factored in.

One way to look at all this is to assume that there really is not one Sunbelt anymore, if there ever was, but three distinct ones: a zone of stagnation along the south Atlantic Coast, an island of relative stability in the lower middle of the country and more stagnation the further west you go.

Why would this be? Actually, the data point to an answer. In the years when building construction and tourism were driving the Sunbelt economy, there were states where these sectors were by far the leading source of growth. Those states include, most prominently, Florida, Arizona, Nevada and California. They were, to an extent that was underappreciated at the time, built on a base of vacations and real estate.

Other Sunbelt states, most prominently Texas, have been more diverse. Their levels of manufacturing and imports were significantly higher than in the rest of the Sunbelt. And they haven’t suffered nearly as much from a recession that was, after, real-estate driven. “That’s the real disparity,” says Mark Muro, co-author of the Brookings study.

If you want some numbers, try these: In the nation as a whole in 2009, the share of the economy devoted to construction and real estate was 7.3 percent. In metropolitan Dallas it was 7.6 percent-a shade higher. But it was 12 percent in Phoenix and 13.7 in greater Las Vegas. If those sound like small distinctions, they’re not. They’re enough to make the difference between a quick, resilient recovery from recession and a frustratingly slow one.

But if you’re looking for a more dramatic figure, how about this: In 2009, the portion of the metropolitan economy tied to real estate, construction, hospitality and tourism was 53 percent in Las Vegas. It was 17 percent in Houston. Las Vegas was a sitting duck for this particular recession; Houston wasn’t.

The recession has even begun to alter the one Sunbelt reality that virtually everyone has taken as a given since 1970: strong population growth. When seats in Congress are reapportioned after the 2010 Census, it’s likely that Florida, Arizona and Nevada will each gain one congressional seat. But that’s based almost entirely on growth that took place between 2000 and the start of the recession in late 2007.

If you look only at population growth in 2008 and 2009, you find a much different picture. Florida slipped from ninth place in percentage of growth to 32nd, below, among other states, Minnesota, Massachusetts and Kansas. Nevada dropped from first to 17 th . If the demographics of the past two years were the basis for reapportionment, it’s likely that neither of these states would be gaining any seats at all.

None of this suggests that the notion of the Sunbelt wasn’t a brilliant one when Phillips thought it up more than 40 years ago. It merely points to the fact that even the best ideas are worth taking a look at every generation or so.

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