Think tank lists Des Moines, Iowa, as No. 2 city for performance during downturn

By John Schmid of the Journal Sentinel

As the nation's industrial heartland rises from recession, its cities might look to an unlikely metro region to emulate: Des Moines, Iowa.

According to The Brookings Institution, a Washington, D.C., think tank, Des Moines nearly tops a ranking of "overall performance during the recession" of the 21 biggest cities of the Great Lakes region, which stretches from Minneapolis and St. Louis, Mo., to Pittsburgh and Rochester, N.Y.

Iowa's capital edged past Madison, which has a larger population, while Des Moines also came out well ahead of both Chicago and Milwaukee under the index. Brookings used a composite measure of employment, unemployment, economic output and housing prices. It tracked each from the start of the recession through the first quarter of 2010.

Only one city fared better than Des Moines: Buffalo, N.Y. But even before the Brookings study, Iowa had caught the attention of Wisconsin's economic planners. Many ask why Iowa - seen by some as a sleepy agricultural state without major cities or professional football or baseball - outpaces the Midwest.

"Anybody that's been watching economic data sees that Iowa definitely outperforms other states in the region," said Todd Berry, president of the Wisconsin Taxpayers Alliance in Madison. "It's a fairly recent phenomenon."

Many took notice in 2008 when IBM Corp. announced plans to create 1,300 technology jobs in Dubuque, Iowa. At the time, a media commentator in the Research Park Triangle, a university and technology mecca in North Carolina, expressed astonishment that IBM chose "the land of farms, cattle and the Iowa caucuses."

"Iowa has won good marks for its economic strategy," said Tim Sheehy, a top official in the Milwaukee 7 economic development consortium and president of the Metropolitan Milwaukee Association of Commerce. "Some of the work that we did early on looked at Des Moines."

"We've been watching Iowa for the last three or four years," said Berry, who tracks competitive benchmarks for Wisconsin. In the 10 years from 1998 to 2008, Iowa's per-capita economic output outpaced the national average while Wisconsin lagged behind the national average, Berry said.

Among the reasons for Iowa's relative success: The state has two notable research universities - Iowa State University in Ames and the University of Iowa in Iowa City. Iowa invests disproportionately in its universities, and it relies less on heavy manufacturing than many neighbors, he said.

The 21 largest cities of the Great Lakes region - which have roots in the 19th century farm, factory and foundry economy - offer one of the most relevant comparisons for Wisconsin's urban centers.

Milwaukee, Minneapolis, Louisville, Ky., and Cincinnati cluster in the middle of the pack, Brookings found. "The extent of job losses during the Great Recession has been highly varied across the Great Lakes region," it said. And compared with the rest of the nation's metro centers, "the Great Recession has been more severe and its recovery weaker in the Great Lakes region than any of the previous three recessions and subsequent recoveries."

Faring worst on the list was Youngstown, Ohio, a former steelmaking town of about 500,000 people.

The ranking makes clear that cities with a concentration of automakers or auto-parts supplies "are among those with the largest employment declines in the nation." Detroit has suffered employment declines greater than 10% since its pre-recession employment peak, as have Dayton, Youngstown and Toledo in Ohio, it said.

One bright spot: The region as a whole avoided the worst of the housing-price inflation that led to the mortgage meltdown. Housing prices fell in the past three years in the Great Lakes region, Brookings said, "but by significantly less than in the 100 largest metropolitan areas."

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Great Lakes rankings
The Brookings Institution measured employment, unemployment, economic output and housing prices in the 21 biggest cities in a region that includes Illinois, Indiana, Iowa, Michigan, Minnesota, Ohio, Kentucky, Missouri, Wisconsin and the western parts of New York and Pennsylvania. Ranked from the top:

Buffalo, N.Y.

Des Moines, Iowa

Madison

Rochester, N.Y.

Columbus, Ohio

Indianapolis

Pittsburgh

St. Louis, Mo.

Syracuse, N.Y.

Cincinnati

Louisville, Ky.

Milwaukee

Minneapolis

Akron, Ohio

Chicago

Cleveland

Dayton, Ohio

Grand Rapids, Mich.

Detroit

Toledo, Ohio

Youngstown, Ohio

Source: Brookings Institution