Sunbelt success a dappled pattern
Dallas — THE Sunbelt isn't what it used to be. But then, it never was.
Newspapers nowadays seem to carry fewer stories about people packing it all in and heading south and west in vans and station wagons. But that is not to say that what we might call ``the Sunbelt phenomenon'' isn't continuing.
Rather, what was always true is just becoming more evident: The Sunbelt is not a monolithic region of snow-free prosperity. Nor is the Northeast being ``evacuated'' by job-seekers in search of employment in a warm climate.
The flowering of the Sunbelt has been an urban phenomenon; a lot of rural areas have been left out.
``The `Sunbelt' has been the large metropolitan areas within the Southern tier of states,'' says Edward L. McClelland, vice-president and economist at RepublicBank Corporation here. ``Not all areas have participated in the Sunbelt movement. The incidence of growth is very uneven.''
For another thing, the energy sword has cut both ways in the Sunbelt. Western energy states prospered in the wake of the oil shocks of the 1970s -- and have felt the pinch when the energy industry has slumped. Employment in the oil-field machinery manufacturing sector in Texas, for instance, increased by 5,000 jobs, to a total of 47,000, from December 1983 to December 1984. But this industry had accounted for 90,000 jobs in December 1981, says William C. Gruben, senior economist at the Federal Reserve Bank of Dallas.
Not all Sunbelt states have an energy sector in their economy, of course. Arizona, for example, which has very little involvement with energy, has been growing dramatically lately. The state had a 7.5 percent increase in wage and salary employment for November 1984 over the year before, says Marshall Vest, a University of Arizona economist, citing US Labor Department figures. This rate put Arizona in first place among the states for that period. Interestingly, in second place was Minnesota, with a 6.6 percent employment increase.
Statistical lag makes it hard to know just who is moving where, and for what reasons. And then there are some obvious problems stemming from going by the numbers: If 10,000 people pack up and leave a city of 1 million and move to a town of 100,000, the city experiences a population loss of 1 percent and the town grows 10 percent. And to some people accustomed to a boom, a slowing of growth can look like a recession.
In a recent interview at his office, Mr. McClelland, confidently asserting that Texas population growth was slowing down, got up to consult a reference publication and then apologized: ``I guess that's not true. Between 1980 and 1984 our population grew 12.4 percent -- that's 3 percent per year, which is twice the national average.''
He adds, ``We're bigger now and it takes more people to keep up the same rate of increase.''
But meanwhile, migration into the Sunbelt does not mean the Northeast is being ``vacated,'' says Elliott Pollack, an economist at Valley National Bank in Phoenix, Ariz., ``any more than Europe was vacated by the migration of people to North America a couple of hundred years ago. The same type of people are coming here now as left England then -- people looking for a less bureaucratic social and political infrastructure.''
The days of the Northeast meekly pleading guilty to charges of ``bad business climate'' and letting Sunbelt states woo its industries away are over, however. ``The cities and states are more competitive than ever,'' says Stephen L. Pacquette, executive director of the Phoenix Metrogroup, who travels extensively himself to recruit industry into Phoenix.
For businesses, he says, ``The 1970s were the decade of the runaway plan.'' Companies sought solutions to their problems in fleeing to areas with a milder climate and a low-cost labor force, preferably in a right-to-work state; they also wanted to be near the new markets of the growing West.
``That's changed, though. The West still offers sun, and right-to-work laws, and is a good place to expand. But the Northeast has realized it has to provide a competitive business climate.'' Along with other observers, Mr. Pacquette does not foresee a resumption of the wave of corporate relocations to the Sunbelt that occurred in the 1970s.
``High-tech,'' Mr. Pacquette adds, ``is less monolithic than people think. It favors those areas with established technology and manufacturing centers -- which are more typical of the Frost Belt than the Sunbelt. And new industries are less concerned with right-to-work laws, since they tend not to be unionized anyway.''
Sunbelt development officials are also learning that one critical element in a successful high-tech economy -- a strong university system -- is not something that can be created overnight by a single appropriation of a state legislature, however ``pro business'' that legislature wishes to be.
But high-tech is not the whole pie. The growth of the Sunbelt has been closely tied in with the development of service industry -- not just fast food and barbershops -- but ``export'' services, which function like manufactured products in that they bring money into an area from outside.
One hears from some quarters that the kind of population growth experienced in parts of the Sunbelt lately ``takes on a life of its own'' with sheer population mass, instead of some manufacturing industry serving as the base of the local economy.
The Fed's Mr. Gruben says, ``I reject that argument that people just show up,'' thereby creating all sorts of demand for goods and services. He does see, though, ``the rise of firms that provide services for nationwide firms -- export services, as the economy is transformed from a mechanical paradigm to a biological paradigm, and information processing, which we think of as a service, becomes part of the manufacturing process.''
Even more than high-tech industry, service firms are footloose: They can be wherever they want to be, and they often opt to be where their executives will not have to shovel snow. In Phoenix, for example, the major corporatations tend to be service companies, often diversified ones: Greyhound Corporation, U-Haul International, Ramada Inns, American Express (credit card processing). Many of these came to Phoenix from someplace else: Greyhound from Chicago, for instance.
``The nature of production is changing -- it's more footloose,'' Gruben adds, as a result of new communications technology. ``At a very mundane level, for example, I can get the New York Times at my local Safeway. . . . Our communication links are so wonderful now, it doesn't impose a cost to be at a distance.''
The Sunbelt today appears to be neither the backwater that some Northerners considered it nor the economic mecca that some Sunbelt boosters would claim. It has simply taken its place alongside other diverse regions in the nation's economy.