In Tough Times, How Are Cities Staying Afloat?

While many cities and entire regions of the U.S. are deep in the economic doldrums, the Brookings Institute recently released a list of 20 cities that are doing relatively well. Guy Raz spoke with the mayors of Nashville and Grand Rapids, Mich., about how they're staying afloat.

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GUY RAZ, Host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Guy Raz.

MELISSA BLOCK, Host:

I'm Melissa Block. And we begin this hour with some good news or perhaps not-so-bad news. The Brookings Institution recently looked at the 100 largest metropolitan areas in the country to assess their economic health. The study came up with a number of interesting success stories. Buffalo, Little Rock and Omaha are faring far better than places like San Francisco, Los Angeles and Miami.

RAZ: Now these aren't boomtowns. Even among the stronger metropolitan areas, many are seeing unemployment rates close to the national average. But they're clearly doing something right or many things right. We'll hear now from two mayors with two different success stories. In a moment, the mayor of Grand Rapids, Michigan, which is starting to see its economy pick up again after years of sharp decline, but first, to Nashville with Mayor Karl Dean. He says his city has historically been more resilient during downturns in large parts, he says, because Nashville has a diverse economy.

KARL DEAN: The top employers here are the health care industry, particularly health care management. We're the health care capital of the United States. We have strong universities here. There is the government; we're a state capital. We also have a very strong hospitality industry. Of course, we have the music industry, which is very diverse. I would also say that I think Nashville benefits from the fact that we do not have a state income tax, and the cost of living here, I think, compared to major cities is dramatically less. You can buy a lot with your - with - in terms of buying a home, you get very good values there.

RAZ: Were you surprised to learn that Nashville is one of the more resilient cities in the country right now?

DEAN: I wasn't - no, I was not surprised. I think we hear from people a lot that there's more going on in Nashville. If you come downtown or you're in different parts of the city, you're going to see construction projects going on. The city has invested in a new convention center which is being built right now, and we did that really in the depths of the recession, but we got that going up. In addition to that, an 800-room new Omni Hotel, which is a private investment, is going up. There are still businesses moving here. So we have - I think there's a lot of appeal to Nashville, so I wasn't surprised learning that.

RAZ: What can somebody like you, in your position as the mayor of a city, actually do to begin to turn things around given how deep this economic crisis is? Is there a whole lot somebody like you or any mayor can really do?

DEAN: Well, what you can do is, if you're in this position, I think you need to continually - to aggressively pursue new job opportunities for Nashvillians, and we've done that. We've been very active in economic development. And I think, fundamentally, you have to continue to invest in yourself, and the two ways we've done it, I think, are the most important. Number one is, unlike other major cities, we have not cut our schools' budget. We've increased funding for our schools. Our school funding over the course of the last four years has gone up about 12 percent, and we're committed to that. That's the one thing Nashville has to get right. We've also invested in ourselves, most particularly in this new convention center.

Hospitality is our number two private employer, about 53,000 people. So we've been aggressive about continuing to invest in the city and continuing to invest in our infrastructure and things like that. Not at the level we'd want to do it, but we haven't just sat on our hands.

RAZ: So does it mean that you have to just think more creatively? You have to go to the private sector and maybe look for a sponsorship, look for private companies that are willing to pay for public projects or public spaces like parks or community centers.

DEAN: You know, particularly with education - and that's a good example - we've put more funding into education, but I have and others have reached out to the private sector to help us bring Teach For American here, the New Teachers Project, Charter School Incubators. If we did not have the private sector, we would not have been able to do that. Because if you're going to be doing anything innovative in government right now, you've got to build partnerships. You just can't do it on your own.

RAZ: That's Karl Dean. He's the mayor of Nashville. Mayor Dean, thank you so much.

DEAN: Thank you.

RAZ: We turn north now from Tennessee to Grand Rapids, Michigan. It landed on the Brookings Institution's list of 20 cities hit hardest by the recession, but now rebounding strongly. When I spoke earlier with Mayor George Heartwell, I told him many people might be surprised to hear that Grand Rapids had made the list.

GEORGE HEARTWELL: Well, perhaps some of the surprise is just that there's a city in Michigan that's doing well today.

(SOUNDBITE OF LAUGHTER)

HEARTWELL: I mean, our state has been hit so hard, and we've been in a persistent recession dating all the way back to 2001. We never really came out when the rest of the nation did, and we've stayed depressed. Grand Rapids certainly has a significant economic sector in automobile manufacturing, and that's been hit hard. But the companies that have survived and are today thriving are companies that have used this downtime to retool, to update their technology, even to diversify their product lines from, say, automobile to wind turbine manufacturing parts.

RAZ: Which is happening in the Grand Rapids' Cascade Engineering. Much of what they did was for the auto industry, but they have now figured out how to retool what they do for other industries, right?

HEARTWELL: Cascade is such an interesting study. Fred Keller, its executive director, is just a brilliant innovator. And Fred has taken that company from 60 percent of its manufacturing being in automotive to now just about 60 percent being in wind turbine parts, in other plastic injection molding applications. Very little of their work today is auto industry.

RAZ: Also furniture manufacturers there as well, right?

HEARTWELL: That's exactly right. Grand Rapids, at one point in our history, called ourselves, and I think rightly, the furniture capital of the world. Most of the really fine wood furniture manufacturing in the United States took place in the latter part of the 19th century and early part of the 20th century in Grand Rapids. We lost that. We lost it to some of the Southern states, Southeastern states. It's now moved to Asia and offshore. But what we've retained is a strong base in office furniture manufacturing.

RAZ: Outside of manufacturing, where are the jobs coming from?

HEARTWELL: Well, our two strongest sectors today are the meds and eds section. It's hospitals, it's health care, it's health research and higher education.

RAZ: If a mayor from a big city that was not in the same shape as Grand Rapids is today asked you what should we start to do, where should we start to look, how to diversify the economy, what would you say?

HEARTWELL: Today, I point them to the knowledge field. I mean, I think that the days of manual labor in this country and making things using manual labor is gone. And so I'd look to the knowledge sector. I'd look to - and I would invest in the kinds of things that a municipal government can do to attract and to enhance the work of companies in broadband, for instance, to make sure that you got a robust spine in your community for broadband. That you're providing incentives, tax incentives, for companies that are knowledge-based companies, research, R&D, design companies. Those are the kind of companies you want to attract and retain because your manufacturing can - as we've seen in the last decade - can as easily relocate to a low-wage market some place else in the world as stay in your own town.

RAZ: George Heartwell is the mayor of Grand Rapids, Michigan. Mayor Heartwell, thank you.

HEARTWELL: Guy, thank you so much.

RAZ: We've been talking about the economic health of America's cities. Among the bright spots: Grand Rapids, Michigan, and Nashville, Tennessee. Both mayors, by the way, have no illusions about the work left to be done. Both cities are seeing unemployment rates around 9 percent, roughly even with a national average.

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