Greetings from Recoveryland
Kotkin, Joel, Newsweek
Byline: Joel Kotkin
Where can you go to escape the recession? Try any of these 10 places. Oh, and be prepared to wear red.
Like a massive tornado, the Great Recession up-ended the topography of America. But even as vast parts of the country were laid low, some cities withstood the storm and could emerge even stronger and shinier than before. So, where exactly are these Oz-like destinations along the road to recovery? If you said Kansas, you're not far off. Try Oklahoma. Or Texas. Or Iowa. Not only did the economic twister of the last two years largely spare Tornado Alley, it actually may have helped improve the landscape.
NEWSWEEK has compiled a list of the 10 American cities best situated for the recovery. These are places where the jobs are plentiful, and the pay, given the lower cost of living, buys more than in bigger cities. In other words, places unlike much of the rest of the country. The cities, most of which lie in the red-state territory of America's heartland, fall into three basic groups. There's the Texaplex--Austin, Dallas, San Antonio, and Houston--which has become the No. 1 destination for job-seeking Americans, thanks to a hearty energy sector and a strong spirit of entrepreneurism. There are the New Silicon Valleys--Raleigh-Durham, N.C.; Salt Lake City; and urban northern Virginia--which offer high-paying high-tech jobs and housing prices well below those in coastal California. And then there are the Heartland Honeys--Oklahoma City, Indianapolis, and Des Moines, Iowa--which are enjoying a revival thanks to rising agricultural prices and a shift toward high-end industrial jobs.
Unlike the Sun Belt states and cities along the East and West coasts, these locales not only grew during the boom of the mid-2000s, they suffered least in the Great Recession. The fact that they are mostly in red states should give the newly ascendant GOP comfort as it tries to deliver on its election-year promise to right the economy. That isn't to say all the blue states will remain weather-beaten. Wall Street, heady with cheap money, has sparked a return to opulence. And the strong demand for high-tech products and services will likely keep places like Boston, San Francisco, and San Diego from devolving into fancy versions of Detroit. Yet given the results of last week's election and the increasing odds against another bailout of state governments, the near-broke and highly regulated blue states will be hard-pressed to generate much new employment.
Of course, not everyone living in NEWSWEEK's Top 10 cities has avoided the heartache. And the continued slow pace of the economic recovery could hamper expansion even in the most-favored cities. If energy tanks as a result of a renewed global slowdown, it could hurt Texas and Oklahoma; dropping agricultural prices would hit some of the Heartland Honeys hard. But relatively--and that is the operative word in this tough economy--our 10 cities should fare better than most anywhere in America. And they could offer us a road map for what the nation's economy will look like once the dust settles.
For sheer economic promise, no place beats Texas. Though the Lone Star State's growth slowed during the recession, it didn't suffer nearly as dramatically as the rest of the country. Businesses have been flocking to Texas for a generation, and that trend is unlikely to slow soon. Texas now has more Fortune 500 companies--58--than any other state, including longtime corporate powerhouse New York.
Austin boasted the strongest job growth in NEWSWEEK's Top 10, both last year and over the decade. Home to the state capital and the ever-expanding University of Texas, the city is arguably the best-positioned of the nation's emerging tech centers. It enjoys good private-sector growth, both from an expanding roster of homegrown firms and outside companies, including an increasing array of multinationals such as Samsung, Nokia, Siemens, and Fujitsu. …