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Is the Sun Belt Behind the Slow Recovery?

The venerable columnist Steven Pearlstein has a great piece in today’s Washington Post concerning overall job creation and the role of creative destruction. I won’t summarize it in its entirety--the whole thing is worth a read and it dovetails nicely with our recent thoughts around jobs and innovation---but there’s one specific point that really pleased me.

In addition to citations from noted economist John Haltiwanger, including the “chainification” of American businesss, Pearlstein introduces his own rationale for slower job creation during the nascent economic recovery: geography. Pearlstein suggests that the end of the decades-long Sun Belt migration is hampering entrepreneurial spirit in the South--while the migration already hurt entrepreneurism in the Northeast.

Pearlstein is certainly right about the changing migration patterns. My colleague Bill Frey tracks these patterns regularly and has highlighted slowing migration patterns across the country. And some of his previous work verified the population renaissance occurring in places like Washington, DC.

This changing migration unleashed Pearlstein’s key point that the Sun Belt-related entrepreneurism was one based on growth in and of itself. “Growth-induced growth” couldn’t be sustained through the Great Recession, and it certainly won’t be sustained in places with falling in-migration.  Also, it’s unsustainable everywhere in the long run.

When major media discussions interweave economic theory and geography, they help everyone gain a crucial understanding of our economic state of play. And when it includes calling out the growth-induced growth phenomenon--I can’t help but stand and applaud. America needs more jobs, but it’s going to require a new growth model to get there.