Tuesday, January 18, 2011
Thomas Shevory, Ithaca College
The census figures released last month had more bad news for the former industrial heartland. Population has grown at either a slower rate than other parts of the country or is even declining in some places. This also means a decline, of course, of political power. New York will lose two congressional seats, Pennsylvania one, Illinois one, and so forth. For comparison’s sake, it’s worth noting that, at one time, New York had the largest congressional delegation in the United States with 45 seats. Now it is headed to 32, with no real end in sight.
But there’s another side to deindustrialization in those states with the fastest growing populations that is often missed by only a quick look at the figures. The fastest growing state in the country for the last three decades as been Nevada, with a population that has grown by 30%, from 2 million to 2.7 million. But Nevada, one of the often envied sunbelt states, is also one of the worst hit by the housing slump. It experienced one of the biggest housing booms, and is now experiencing one of the biggest busts. Nevada has a large service industry, related to gaming and tourism, which accounts for about one-third of the state's gross product. And of course building casinos, hotels, and housing for workers, turned construction into a primary driver for pulling in even more population and providing even more reasonably well-paying jobs. Many of these emigres were from the North and Midwest, but also many immigrants crossed the border from Mexico and places beyond.
The irony is that the census is showing a huge increase in population at a time that Nevada’s population is tapering off. Nevada now is, in other words, undergoing a new form of deindustrialization as the service industry is being hollowed out and immigration is declining dramatically, with some out-migration. Deindustrialization in the Northeast and Midwest was a long, slow secular decline. In Nevada it seems to be operating at the speed of light. It’s replicating the western boom and bust extraction economy of the gold rush days. Where this will go is anybody’s guess, but it shows how fickle and fragile the service economy can be. It takes a while to shift widget manufacturing to lower labor costs countries, but when an economy is organized around less tangible goods, the bust cycle can happen extremely quickly, leave tremendous economic dislocation in its wake, and little legacy of enduring economic value.