What’s the matter with Kansas?
While the US heartland is booming, the record in Kansas is more mixed
Key Takeaways
Population Growth: The American Heartland experienced a 50% population increase from 1980 to 2023, significantly outpacing the Northeast's 16% growth
Housing Development: Housing permitting in the Heartland, especially in the South, grew at a compound annual rate of 1.45% from 1988 to 2020, surpassing other regions, with a notable boom post-April 2020
Entrepreneurial Surge: The Heartland, particularly the South and Mountain West, has seen the highest increase in new business formations amid a national startup boom driven by the COVID-19 pandemic
Cultural Renaissance: The rise of craft breweries indicates a thriving cultural and economic revival, fostering community and entrepreneurial spirit
Kansas' Mixed Record: Kansas has seen mixed results, with slow population growth but robust economic gains
Related
Editor’s note: a version of this article appeared July 21, 2024 under the title of “Heartland Revival”. This article includes a specific analysis of Kansas.
Migration of populations has been central to the American story since 1776. The nation was founded by settlers who came from Europe in search of economic opportunity and religious freedom. In the 19th century, pioneers pushed west in search of free land, granted by the federal government in the Homestead Acts signed by Abraham Lincoln in the midst of the Civil War. After the end of slavery, millions of African Americans migrated to northern cities from southern plantations. After World War II, veterans returned from overseas, started families, and built houses outside urban cores. America constructed a road network, notably the interstate highway system, that connected these suburbs to cities and allowed their inhabitants to commute to work.
In the early 2020s, another migration is happening in America, no less transformational. Since the 1980s, there has been a migration from the northern cities to the Sunbelt cities of the South. This migration has been accelerated by the retirement of the baby boomer generation. The COVID-19 pandemic supercharged this trend and broadened the migration from baby boomers to other demographics. The change was catalyzed by the rise of remote work and the associated separation of the office from the home. All of the sudden, people could live anywhere and work anywhere. This led many to leave the high-cost real estate of the coasts in search of more affordable lives in the Great American Heartland.
I call this migration the Heartland Revival and I will explore its nature using data from the US Census Bureau. Specifically, I will look at housing and population shifts, entrepreneurship, and culture. As the data will show, the US Heartland is booming.
In 2005, Kansas native Thomas Frank published the bestselling book What's the Matter with Kansas? The book is about politics and tries to decode the Kansas zeitgeist. Likewise, this Kansas native wants to understand the Sunflower State in the context of the Heartland Revival. As I will show, growth in Kansas in post-remote work America has been more mixed.
Population shifts
I define the Heartland as the Census regions Midwest, South, and West less California and Florida. Population data show the growth of the American Heartland when compared to all individual regions. In particular, the South is growing rapidly, led by Texas, along with the West, led by the “mountain lions”, cities like Boise, Idaho, Salt Lake City, Utah, and Spokane, Washington. In contrast, the Northeast is stagnant and even shrinking in some cases[i].
If the growth in new home construction is less than growth in population, housing prices will increase. I have analyzed data for housing permits and will show how growth in the American Heartland exceeds all other regions of the US.
First, the population of the American Heartland increased 50% from 1980 to 2023, from 144 million people to 216 million people. This compares to an increase of only 16% over the same time period in the Northeast.
Source: St. Louis Fed
Data for housing permits only goes back to 1988[ii]. From 1988 to 2020, the compound annual growth rate in private single-family house permits for the American Heartland was 1.45%, exceeding the same figure for the Northeast by 15%. Within the American Heartland, housing construction was greatest in the South.
Source: St. Louis Fed
After a drop in April 2020, housing permitting boomed in the American Heartland through 2022. Conversely, the Northeast saw virtually no growth in housing supply as a result of the pandemic.
Source: St. Louis Fed
Entrepreneurship
Small businesses are the beating heart of the American economy. Looking at applications to form new businesses going back to 2004, the United States is currently in the midst of a startup boom spurred by the coronavirus pandemic. Although this entrepreneurship wave is broad-based, again the American Heartland has seen the greatest increase in new business formation[iii].
Source: St. Louis Fed
Within the American Heartland, growth is greatest in the South, followed by the Mountain West.
Culture
Culture is difficult to quantify. In the book "Our Towns," James and Deborah Fallows highlight the significant role craft breweries play in the revival and growth of American towns. They argue that the presence of a craft brewery is a reliable indicator of a town's economic and social vitality. Craft breweries serve as communal spaces where people gather, fostering a sense of community and entrepreneurial spirit. According to the Fallows, a city that is on the rebound will likely have at least one craft brewery[iv]. Furthermore, towns with craft breweries tend to have a certain kind of entrepreneur and a critical mass of mainly young people, which further contributes to the community's dynamism and innovation[v].
In this category, the Mountain West dominates the ranking of breweries per 100,000 adults over the age of 21. Montana leads with 12.3 breweries per capita, followed by Colorado at 10.6 breweries per capita, followed by Wyoming at 10.5 breweries per capita[vi].
What’s the matter with Kansas?
While the American heartland is booming, the Midwest is more stagnant. In particular, the record in Kansas is mixed.
In 2023, Kansas experienced anemic population growth. The population increased by just 0.13%, which translates to an addition of about 3,830 people, bringing the total population to just under 3 million[vii]. For the entire pandemic period, the population of Kansas increased by just 1% from 2019 to 2023 and most of this growth was concentrated in Johnson County (Kansas City)[viii].
In contrast, Kansas has seen robust economic growth in recent years, including a nation-leading 9.7% real GDP growth rate in the 3rd quarter of 2023[ix].
During the pandemic period, Kansas's GDP grew by a blistering 28% from 2019 to 2023[x].
This growth was broad-based, with both metros like Kansas City and Wichita sharing in the gains with rural areas[xi].
Source: BEA[xii]
Using craft breweries as a proxy for culture and economic dynamism, at 3.7 breweries per 100k adults 21+, Kansas ranks 28th in the nation. But since around 2016, the rate of new brewery construction has accelerated, an encouraging sign[xiii].
Ways Kansas can grow more
While Kansas City and Wichita have seen growth in the recent years, they are not taking full advantage of the opportunities that remote work, and the broader Heartland Revival, offer. Wichita used to be known as the Air Capital of the World. The city has returned to headlines with the purchase of Spirit Aerosystems by Boeing. Wichita should take advantage of the ongoing reindustrialization of America and enact policy to rebuild its aerospace manufacturing base.
Kansas City strengths include the headquarters of the telecommunications giant Sprint and the healthcare technology company Cerner. The city should enact policy designed to make it a telecommunication and a healthcare technology cluster. Kansas City should also aim to be the Silicon Prairie and enact policy to foster a thriving entrepreneurial ecosystem.
Rural Kansas should embrace its place as the breadbasket of America and the world. Kansas farm country, as a part of the greater Midwest, is part of the largest contiguous tract and most productive farmland in the world. Rural Kansas should also lean into information technology, which helps solve the problem of scale, which makes delivering any service in sparsely populated places difficult. This means enacting policies that encourage telehealth, online learning, and other remote services.
The Heartland Revival represents a profound shift in America's demographic and economic landscape. This transformation, spurred by the rise of remote work and the pursuit of more affordable living, has rejuvenated the Great American Heartland. The data illustrates significant population growth, robust housing development, and a surge in entrepreneurial activity, particularly in the South and Mountain West regions.
However, Kansas' experience has been more mixed, with sluggish population growth but impressive economic gains. By leveraging its industrial strengths and embracing modern technological solutions, Kansas can better capitalize on the Heartland Revival.
The Heartland's revival is more than just numbers; it embodies a cultural renaissance as well. The proliferation of craft breweries, a symbol of local entrepreneurship and community vitality, highlights the region's burgeoning social and economic vibrancy. These trends signal a promising future for the Heartland, where a blend of affordability, innovation, and community spirit sets the stage for continued growth and prosperity. As America continues to evolve, the Heartland stands as a testament to the enduring appeal of new frontiers and the dynamic spirit that drives the nation's progress.
https://fred.stlouisfed.org/series/FLPOP |
https://fred.stlouisfed.org/series/PERMITMW |
https://fred.stlouisfed.org/series/BFPBF4QTOTALSAMW |
[iv] https://www.ourtownsfoundation.org/craft-breweries
[v] https://www.ourtownsfoundation.org/the-local-tavern-a-glimpse-of-americas-past-present-today/).
[vi] https://www.brewersassociation.org/statistics-and-data/state-craft-beer-stats/
[vii] https://worldpopulationreview.com/states/kansas-population
[viii] https://usafacts.org/data/topics/people-society/population-and-demographics/our-changing-population/state/kansas/?endDate=2022-01-01&startDate=2019-01-01
[ix] https://www.bea.gov/news/2023/gross-domestic-product-state-and-personal-income-state-3rd-quarter-2023
[x] https://fred.stlouisfed.org/series/KSNGSP
[xi] https://www.bea.gov/news/2023/gross-domestic-product-county-and-metropolitan-area-2022
[xii] https://www.bea.gov/sites/default/files/2023-12/lagdp1223.pdf
[xiii] https://www.brewersassociation.org/statistics-and-data/state-craft-beer-stats/