We want to preface this week’s article with a brief observation. It is common, in any market, to attack those people who point out problems or shortcomings. The perception is that people who discuss weaknesses are overly pessimistic, or that they want something to fail. Here, this is not the case. This article seeks to point out that there are substantial, longstanding problems facing the Toledo region, which need to be addressed. However, there can be no solutions until we have recognition that problems do exist. We hope to be part of the solution to Toledo’s problems, but first we must seek to spread understanding of this region’s difficulties.
Toledo, it is little secret, is a dying town. It has been a dying town for decades and, unless drastic change is implemented in a hurry, it will likely continue or even accelerate its decline.
Recently, to gain a better understanding of metrics that have caused or characterized Toledo’s decline, we analyzed several statistics of the Toledo metro area and then compared them to national aggregates. These statistics included personal incomes and labor force numbers, which will serve as the focal point of discussion here.
Between 1969 and 2012, personal incomes in the Toledo metro area grew faster (or declined less) than the US aggregate in just seven years. That means that in 36 of the past 43 years, personal incomes in the Toledo market have failed to keep pace with the broader US market.
This failure of personal incomes in the Toledo area has naturally led to an oft-cited “brain drain” in Toledo. For direct evidence of this consider that the labor force in Toledo has expanded faster (or declined more slowly) than national aggregates in just four years since 1990.
So, what do these numbers mean?
First, they demonstrated a marked inability for Toledo to attract or retain talented individuals. The brain drain is alive and well in Toledo. After all, why would anyone want to stay in a market where personal incomes fail to rise as fast as they, by all accounts, should? Why wouldn’t people make a mass-exodus to other areas of the country where personal incomes are keeping pace with, or even growing faster than, the US on the whole?
Well, that’s just what has happened. Our high school graduates who leave for top post-secondary educations, by and large, do not return. Our small businesses that grow into large businesses and seek to expand beyond the regional market often leave at their first opportunity. Start-ups seek and are awarded out of town funding, pack up and move before Toledo ever benefits from their innovative ideas.
Second – and even more importantly – these numbers depict a metro market that is unable to grow as fast as the broader domestic economy. If personal incomes here fail to keep pace, and if our labor market struggles to expand, that means there are fewer and fewer dollars available in Northwest Ohio to support new or existing businesses. It means that, just as workers are forced to look elsewhere for good paying jobs, companies must look outside Toledo in order to find the demand they need to support their supply. For most large companies in Toledo this is already the case. While many successful companies may be headquartered here, they have been doing more and more of their work – or selling more and more of their products – outside the Toledo region.
This failure to keep pace means that we as a metropolitan area are in decline. We have fallen behind other markets and are likely to fall further behind some markets and even see some previously smaller markets surpass us. After all, areas where personal incomes rise faster than the US aggregate will naturally attract talent to fill high-paying jobs.
Toledo, meanwhile, will continue to suffer. Our local economy will continue to shrink. Why? Because there are not– and will not be – as many dollars to go around here as in there are other markets. People elsewhere have comparatively more to spend. Businesses here have a greater need to export to other regions – or even other countries – in order to find the demand they need to thrive.
One natural inquiry is whether these numbers are changing, and sadly the answer is no. The reason these numbers aren’t changing – why trends aren’t reversing – is because we aren’t changing. Toledo today isn’t doing anything drastically different than we did in 1969. We, for the most part, continued pushing the trends that have led us to exactly where we are; and yet somehow we expect that things will magically improve. It’s not rational to keep doing the same things over and over while expecting different results.
What can or should we do to stop these trends – to reverse course and put Toledo back on track to becoming a thriving market again? We need to do something different, and that doesn’t mean more government. This has been the trend in Toledo for decades; first a strong mayor and then regionalization. More government is not, and has never been, the answer to this region’s problems, and yet for some reason we are always fooled into thinking the next scheme will work.
Rather, if the last decades offer any lessons for us at all, what we need to take away is that government does not, and government never will, have the answers for making this region successful. Elected officials don’t hold the keys for success; in fact they have a tendency to impede progress more than they encourage it. If we want to do better in Toledo, leadership will have to come from the private sector.