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YOU DECIDE: How can you judge growth?

February 22, 2008

MEDIA CONTACT: Dr. Mike Walden, 919.515.4671 or michael_walden@ncsu.edu

Dr. Mike Walden
Media representatives: For a black-and-white or color copy of this photo, call 919.513.3127 or e-mail dave_caldwell@ncsu.edu.

North Carolina has been one of the fastest-growing states in the nation during the past quarter century, whether measured by population, number of workers or size of the economy.

In fact, a just-released study from a major moving company found six people moved into North Carolina in 2007 for every four that moved out, and this margin of "in-movers" over "out-movers" led all states.

I've now been in North Carolina for 30 years, so I've been in the middle of this growth. And like many long-time residents, I've certainly seen what many consider to be the negatives associated with rapid development. Open fields and farms have been converted to housing subdivisions and shopping centers. Wildlife has been pushed into more remote locales. And noise, traffic congestion and grit and grime have supplanted quiet, peaceful surroundings and pristine landscapes.

There's no doubt that bad things can come with growth.

But as an economist, I also know that most things in life come with both costs and benefits. It's rare that something carries either all pluses or all minuses.

I think this goes for growth, and the reason is based on something called "critical mass." This fancy term just means that to get certain good things in our economy, a certain number of people need to live in that economy. Stated in reverse, some products, services, jobs and events simply won't be available unless there are enough people living in the area to support them.

Consider retail products and services.

Why is it that many North Carolinians living in small towns and rural areas make several trips each year to Charlotte, Raleigh, Winston-Salem, Greensboro or Wilmington to shop? It's because these large cities offer a much greater variety of stores and consumer goods than can be found in smaller towns. And the reason these big cities have the variety is critical mass; they have a large enough population to make the specialty stores and fancy retailers profitable.

In fact, many national brand retailers will "count rooftops" before deciding to put in a store. If the number of rooftops doesn't meet some minimum cutoff, they won't even consider the area for a store. The tremendous growth in the Triangle and Charlotte in the past two decades - dramatically increasing their rooftops - is the reason these two regions now have most nationally known stores and services.

Now think about jobs.

There are usually more job opportunities in bigger cities. Not only that, there are also more types of jobs and occupations. Again, small towns and rural areas just don't have the population base - critical mass - necessary to support some lines of work. While you likely won't find a biochemist, nuclear engineer or industrial designer in a town of 2,000, there are enough of these workers in a city of 200,000 for local chapters of their respective professional organizations. This is a big reason why college graduates who grew up in a small town often don't return home for work.

Certainly bigger regions can support more cultural events and entertainment options. The Triangle and Charlotte now have major league sports teams, and they also offer Broadway plays, top flight singers and entertainers and touring national shows.

Let's not forget an increasingly important part of our lives: medical care. Although family physicians can be found in almost any sized town, you're much more likely to find specialized doctors and specialized medical facilities in North Carolina's larger metropolitan areas.

So the obvious point is that small towns and rural regions offer a mix of pluses and minuses, as do larger cities and metropolitan areas. The mix is different for each, and people sort themselves out between the two based on the strength of their likes and dislikes, job requirements and stage of life.

For example, my wife and I tend to like the hustle and bustle, variety of shopping and cultural offerings and job opportunities of larger cities, hence we live in the metropolitan Triangle area. But my sister and brother-in-law prefer a slower, more tranquil pace and work in jobs that can be found just about anywhere. Hence they choose to live in a small North Carolina town.

Some think that someday we may be able to create the best of both the big and the small, perhaps using modern technology.

For example, telecommuting may allow a professional worker to live in a rural area yet effectively work in a big city. Or video connections between doctors' offices and teaching hospitals may allow the country doctor to offer specialized treatment and operations right in his office.

But that day isn't here yet.

So for now, we'll all have to decide what combination of benefits and costs we're willing to accept in where we live.

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Dr. Mike Walden is a William Neal Reynolds Professor and North Carolina Cooperative Extension economist in the Department of Agricultural and Resource Economics of N.C. State University's College of Agriculture and Life Sciences. He teaches and writes on personal finance, economic outlook and public policy. The Department of Communication Services provides his You Decide column every two weeks. Earlier You Decide columns are at http://www.cals.ncsu.edu/agcomm/writing/walden/decide.htm

Related audio files are at http://www.ncsu.edu/waldenradio/

Posted by Dave at February 22, 2008 08:52 AM