The Moneyball Approach to Metropolitan Growth

As we try to emerge from pandemic, we are seeing places demonstrating the ability to create strong regions built on quality-of-life and economic growth

Pete Saunders | Corner Side Yard Guest Contributor

At some point our nation will emerge from the pandemic and we’ll return to … something else. There are many people who believe that the metro areas and metro economies that brought us the inequitable growth model of the last 40 years will return to form. True enough, the pandemic exposed and exacerbated inequalities even in our most flourishing metro areas.

But that doesn’t have to be the case. In fact, there are places that are demonstrating the ability to create strong regions built on quality of life as well as economic growth.

Welcome to the Rust Belt.  

Back in August, I conducted an analysis of metro population changes and metro gross domestic product growth for metro areas with more than one million residents in 2010. Many fast-growing metros I found to have having relatively low-productivity economies (Tampa/St. Petersburg, Orlando, Jacksonville, Houston and Las Vegas, for example).

The Corner Side Yard Blog

Similarly, many slow-growing metros had economies outpacing their demographic growth (Detroit, Grand Rapids, Milwaukee, Chicago). How were these regions able to do that? In part by rejecting the “superstar” economic model that our most successful coastal cities have perfected and implementing a “moneyball” approach to success. Rust Belt cities have embarked on a path of inclusive growth and are increasingly improving from within.  

Moneyball: The Art of Winning an Unfair Game, a 2004 book written by Michael Lewis that became a 2011 film, follows the low-budget Oakland A’s and Billy Beane, their general manager. The A’s are a clear #2 in the two-team market of the San Francisco Bay Area, well behind the San Francisco Giants. That status is reflected in attendance and revenues, putting the A’s at a competitive disadvantage when it comes to paying top dollar for the best players. However, in the late 1990’s and early 2000’s, the A’s were a hugely successful team, despite having one of the lowest payrolls in Major League Baseball.  

How did they do it? Well before other MLB teams, the A’s adopted a sabermetric approach to baseball, based on empirical analysis, that finds value that others miss. The A’s put an emphasis on players who passed the data test, even if they didn’t pass the eye test. They focused on getting players who excelled in on-base percentage rather than batting average, for example; players who could get on base through walks or even being hit by the pitcher, as well as getting hits.

The A’s were able obtain players discarded by other teams, but through their empirical analysis, were able to cobble together winning teams. More MLB teams adopted the approach in the following years, and now sabermetrics dominates the MLB world.

I found evidence that perhaps “moneyball” was at work in metro growth. I confirmed this by returning to a Brookings Institution report released last February, the annual Metro Monitor.

Brookings has conducted an annual evaluation of economic and inclusionary growth performance since 2013. Their evaluation considers typical factors like the change in the number of jobs, changes in wages and general standard of living. But it also examined changes in racial gaps in employment, wealth, poverty that could identify how well distributed economic performance is within metro areas. Here’s a quick look at the overall Inclusion Index …

Brookings’ data shows that Rust Belt cities did very well in overall inclusionary growth, with three ranking in the top five of inclusionary growth (Detroit at 3, Grand Rapids, MI at 4, and Milwaukee at 5), and four more in the top twelve (Chicago at 9, Cincinnati at 10, Buffalo at 11 and Cleveland at 12). Pittsburgh ranked 16th, Columbus, OH 17th, and Rochester, NY 18th, comprising ten of the top 18 metros in inclusionary growth. The pattern is similar when looking at racial inclusion, with Rochester, Grand Rapids and Milwaukee heading the list, with Indianapolis (7th), Detroit (14th), Pittsburgh (15th), Buffalo (23rd), Chicago (25th) and Minneapolis/St. Paul (26th) also ranking in the upper half of the nation’s 53 largest metros.

Wonder how other metros in other parts of the country compare? West Coast metros Portland, OR (1st) and San Jose (2nd), San Francisco (6th) and Seattle (8th) ranked highly in overall inclusive growth. Their East Coast brethren, not so much. Boston ranked highest among the East Coast metros (21st), followed by Providence, RI (28th), New York (39th), Baltimore (46th), Philadelphia (49th), and Washington, DC (52nd). Interior west metros like Denver (7th) and Salt Lake City (13th) showed well, but on the whole many Sun Belt metros did not. Atlanta ranked highest in inclusionary growth (14th), with Memphis (20th) and Austin (22nd) also ranking well. However, metros like Dallas (32nd), Tampa/St. Petersburg (41st), Jacksonville (42nd), Orlando (43rd), and Houston (47th) all in the bottom half of the category.

What’s happening in the Rust Belt that’s not happening anywhere else?

For one, an understanding that the manufacturing sector that brought them to their economic and demographic peak was never coming back. Elected officials and corporate and institutional stakeholders took the lead from the coastal metros by adding emphasis to their existing assets, whether in health care or biomedical research (Cleveland), technology, robotics and education (Pittsburgh), or even finance, transportation/logistics and food processing (Chicago). Perhaps what Rust Belt cities did best in the aftermath of dramatic population loss over the last half century is focus on quality of life – improving services for the people who remain.

For coastal metros and their Rust Belt cohorts, this may validate the success of the former, while providing an incentive for the latter.  Economically speaking, metros like Chicago and Pittsburgh have effectively mimicked the development pattern of coastal cities, allowing them to specialize in finance, business/professional services, and transportation (Chicago) and in technology, health care and education (Pittsburgh). What’s likely limited their growth is a workforce that still has strong connections to the legacy manufacturing industries; as each metro’s workforce expands its capacity, their economy will correspondingly expand.

As for the Sun Belt metros of the South and West, and those in the nation’s interior? With some doing fine in terms of inclusion (Atlanta, Denver), and others, not so much (Houston, Phoenix), they’d do well to emphasize inclusion as part of their attraction strategy and not assume that inclusion is an organic, naturally occurring outcome.