Out of Control Policy Blog

Cool counties outforcing jobs

A familiar Hollywood script template involves the ugly duckling's transformation into a swan. The homely kid who suffered wedgies, swirlies and constant derision from the cool kids, out does those very same hipsters in the end. We've seen that movie a thousand times.

The same thing is happening in many of our nation's metro centers. Fewer people want to sit at the cool kids' lunch table, and more are giving the social outcasts a second look. The reason has a lot to do with jobs.

Forget all the talk about outsourcing. In most cases, outforcing (where costly regulations push jobs to other areas) is much more significant. Earlier this year the BLS noted that most jobs are outsourced not to foreigners, but to other Americans.

Recently, the Public Policy Institute of California noted that outforcing impacts job prospects in the Golden state far more than offshore outsourcing. Typically, the coolest areas are doing most of the outforcing.

New BLS data for the first quarter of 2004 reveal that self-consciously hip areas like San Francisco (-1.4 percent job growth) aren't performing as well as less fabulous locales like Riverside (5.4 percent job growth), where the cost of doing business is lower.

Riverside shows that, even though governments at every level have implemented policies that increase outforcing, local governments can do a lot to improve their own job markets. California has one of nation's worst job creation climates, and yet Riverside has still been able to create jobs at an impressive rate.

Nationwide, other hip job losers include New York, Cook and Suffolk counties. Multnomah, OR (home to smart growth poster child Portland) has an impressive trophy case full of "livability" awards, yet its job growth rate flat lined.

Certainly, lots of factors contribute to job growth, but all else equal, I'll bet on the low tax, low regulation locations every time.

Ted Balaker is Producer


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