Two Cities

Once upon a time, there were two cities. In the north lay a small bedroom community suburb supporting a shining manufacturing pillar of chrome and steel. In the south was the epicenter of a land of tobacco, textiles, and technology. Each represented some of our country’s best emerging from World War II and moving to an era of prosperity.

Since the 1950s, Troy, Michigan and Raleigh, North Carolina, have carefully managed the diversity of their job base by encouraging a variety of industries to invest in their cities. The current fiscal crisis facing Michigan, however, is miring Troy’s progress due to the state’s mass exodus resulting from the demise of the automobile industry. Raleigh faced a similar crisis back in the early 1980s with the outsourcing of textile manufacturing and the anti-tobacco movement. Fortunately, the state of North Carolina had begun diversifying its economic base in the early 1950s making it better prepared to react to the crisis by localizing the economic downturn and minimizing its scale.

If there were a villain in this story, it would be the unions: the United Auto Workers Union and the Textile Workers Union of America. Initially established to help the average factory worker, they evolved into political dynamos whose purpose transformed to one devoted to self-interest. The unions ultimately controlled these companies and helped lead to the destruction of both American industries and their supporting communities. The unions made it impossible for these companies to be competitive in the global economy, and this ultimately led to the affected companies finding alternative ways of either doing business elsewhere or simply going out-of-business.

With a population of roughly 80,000 people, Troy has experienced no major growth in the past ten years. Raleigh on the other hand has experienced a 29.6 percent increase in population growing to 375,000 in 2009. The unemployment rate in Raleigh is 7.40 percent compared with Troy’s unemployment rate of 9.70 percent. Recent job growth for both cities is negative; however, Raleigh jobs have only decreased by 3.30 percent whereas Troy jobs have decreased by 9.3 percent.

Economic slowdown in both areas has introduced some interesting corporate dynamics. While the unemployment rate in Raleigh has remained low, so have salaries. Resulting from the downturn of 2001, income has remained 10% to 30% lower than in years prior. Two key growth characteristics for Raleigh include low unemployment and rising incomes. Although Troy has elected to follow the rest of the state of Michigan in providing tax credits to bring companies to their region, the availability of skilled resources has made staffing a challenge. To solve this problem, businesses are importing resources, like me, from other states or they are supplementing their rosters with virtual employees.

Is there a happy ending to this story? Well, the forecast for both cities is mixed. Raleigh’s commitment to its history, the arts, education, business, and the environment consistently make it one of the most desirable places to live and work. Annual awards for Raleigh include “#1 Best Place to Live in the U.S.” (2008, MSN#1 Best Place for Young AdultsBC.com), “” (2008, Bizjournals), and “#5 Recession-Proof City” (2008, Forbes magazine). Troy has one of the best public school systems in the country and is home to several major universities. Troy was ranked 22nd “Best places to Live” (2008, CNN Money). North Carolina’s economy is expected to continue to grow through the next decade, with Raleigh and Research Triangle Park leading the way. Michigan is more difficult to forecast due to the collapse of the automobile industry and its ripple effect on suppliers and associated businesses. Unfortunately, much of the Troy’s economic prosperity was based on automotive-related business, especially small-scale manufacturing and supply operations. As a result, Troy has no clear forecast and may have a slower recovery due to the larger impact of the state economic conditions.

The more I travel, the more I realize just how many other people are sharing the life I lead. Lay-offs and company bankruptcies are causing many to rethink the job market and explore new ways of providing for their families. Real estate foreclosures and the recession have made it difficult to relocate. “Unconventional” has taken on new meaning. You live and work where you must even if it means separate locations for each.

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2009 has become a bedtime story for grown-ups. The moral of the story is to work hard, buy only what you can afford, pay in cash, diversify, pay attention to what is going on around you, and be honest. If you follow these simple guidelines, you should be able to sleep at night.

- Ken