Two Different Maps of the Economic Downturn

A friend posted a random question on Facebook earlier, and I wound up doing a bit of unintended research into business closings today as a result. Put together a couple of interesting thematic maps as a result. (H/T Deanna McMillan)


First, a map showing the percent change in total number of employees between the second quarter of 2007 and the same period in 2010:

The only state in the contiguous US to add jobs in that three year period was North Dakota. And yet, I haven't heard of any land rush in Grand Forks. (Alaska also created 994 jobs in this time, a .39% growth, while Hawaii lost 9.75% of it's workforce.) As you can see, most of the rest of the country has taken a licking.

Secondly, and much more interesting to me, is the percent change in total number of "establishments". The Bureau of Labor Statistics defines an "establishment" as "an economic unit, such as a farm, mine, factory, or store that produces goods or provides services."

A broad classification, to be sure. I would venture that Louisiana is an outlier, and that much of the growth is related to businesses reopening post-Katrina. But I don't think it's any coincidence that states like Wisconsin, Indiana & New Jersey, which lost workplaces, are going after businesses in Illinois, which actually gained. Furthermore, this map would seem to indicate to me that despite current budget woes, Illinois and California would seem to be on the right trajectory for creating new jobs, while the South and Inland West may be in for an extended period of stagnation. Only time will tell, of course, but interesting to consider.

Night Falls on Hoboken

I would like to send a message to the nation's governors. Please stop with the whole "let's lure businesses from Illinois" trip. I just can't keep up. Latest on the bandwagon is Chris Christie, 55th Earl of New Jersey. On one hand, I don't mind this one as much. Jersey is clearly a part of a different region, so it stings a lot less than when Wisconsin or Indiana gets in on it. But on the other, Christie has already proven himself to possess tunnel vision (pardon the pun) regarding New Jersey's place in a broader mid-Atlantic region. And let's face it, New Jersey without New York City & Philadelphia across the rivers is just...Delaware.

Christie is in Chicago today to play up New Jersey's recent income tax cuts, because taxes are always bad. As I've written, tax rates aren't everything. I doubt the governor's presentation mentions that New Jersey has the highest fifth-highest median home prices in the nation, and that the state has some of the highest property taxes in the country. He also probably won't mention that New Jersey receives significantly more federal aid per capita than Illinois does. These are inconvenient facts when one is trying to portray one's fiefdom as a tax haven.

Rather than attempting to poach jobs from fellow Americans, states like New Jersey should be making investments in new businesses, incubating entrepreneurship in economically depressed places like Camden and Newark. Investment is key not just for businesses, but for the modern infrastructure that this country (and New Jersey) is sorely in need of. New Jersey on it's own is nothing. Without adequate transportation links within the New York and Philadelphia metros that drive the state's economy, it would die. All of this might require (gasp) temporarily raising taxes. Putting things off for the next occupant of the office is the way of American political life, and it is killing the country's economic future. Americans will always complain about taxes being too high, until they actually start seeing a return. Voters in Scandinavia don't seem so preoccupied with this issue, even though their tax rates make the United States look like a libertarian's wet dream. This is because they know exactly where those taxes go. They pay for first-rate infrastructure and health care and for their children to attend college, not to subsidize corporate interests and fund despotic regimes and endless wars. Meanwhile, China is investing in infrastructure and planning on a regional scale that will ensure their continued ascent. We'd better get used to looking up.

I Hate to Say I Told You So...

Well, actually I don't mind it at all. Scott K. Walker, eat this. Just came across the news that Evraz NA, the North American subsidiary of the steel company partially owned by Russian oligarch and world's fifteenth-richest man Roman Abramovich, is relocating its headquarters to Chicago. As much as I hate Chelsea FC (which he also owns), it's nice to have my opinion validated that international business cares less about a couple percentage points worth of taxes than transportation links. It was between Chicago and tax-haven Delaware, after all, and those links need to be paid for somehow. It's only seventy jobs, most of which will be transfers from the Portland office, but symbolically it's huge.

I'm not going to go into whether or not this particular deal is actually a good one for the city. Or the fact that this does nothing to add to the city's industrial base. Or how this marks a huge psychological loss for Portland to lose what was once one of it's flagship corporations, the former Oregon Steel. Or whether Abramovich is the kind of guy we want setting up shop here. I'm trying to be positive for once.

From the Tribune's story:

The announcement comes shortly after Illinois hiked its corporate and individual income tax rates, a dramatic step that triggered a hue and cry that businesses will exit or avoid moving here. The founder of Champaign-based Jimmy John’s Gourmet Sandwiches, for instance, this week told the Champaign News-Gazette that he’s considering moving the corporate headquarters out of state.

But Mike Rehwinkel, Evraz NA president and CEO, said the tax increases, while hardly a welcome turn of events, did not influence the company’s relocation decision. The key factor, he said, was getting easier, less expensive air travel out of O’Hare and Midway airports to customers with offices dotted around North America, from Dallas and Houston to Calgary and Montreal. 

“As much as people say they don’t like those airports, we love them,” he said. “We can reach all our customers, all our mills and into Europe when we need to.” Being able to reach a customer in a day trip should translate into more revenue, he said, noting that often is not possible when flying out of Portland.

Personally, I'll take an international steel conglomerate over a regional sandwich chain. Potbelly is better anyhow. Just imagine what a 220mph high-speed rail network would bring. Read the rest here.

On a more personal note, this has been the busiest week on the site ever. A huge tip of the fedora to Aaron Renn for the linkage. Monday's post on provincialism is already the most-viewed thing I've ever written, and I couldn't be happier. You all are the real heroes. I can only hope that Scott K. Walker is shedding a single tear into his Cheerios right now.