We like to look at other cities the way some people like to look at birds. Every major sports championship gives us an excuse to look at the random cities represented to see what lessons — economic or otherwise — we can learn from them that can apply here in Southwest Virginia. So, too, with the sites of political conventions.
Today, we turn to Charlotte, where a handful of Republicans this week will go through the formal motions of renominating Donald Trump, even as the president delivers his acceptance speech somewhere else.
Charlotte, unlike the Democrats’ Milwaukee, is a city we in Roanoke think we know. For a long time Roanoke went through a period where you could divide people into two camps — those who had Charlotte envy and those who vowed that Roanoke should never be “another Charlotte.” We seem to have worked through that — Roanoke doesn’t seem to have the inferiority complex it once had. Still, how much can we learn from Charlotte, whether we love it or hate it? Quite a bit, actually.
1. Charlotte shows us how Roanoke fell behind economically. In 1950, the median household income in Roanoke and Charlotte were about the same. Today, it’s not. What happened? Clearly, Charlotte did a better job of adapting to a changing economy than Roanoke did. But why? And how? The short version goes like this: Charlotte in 1950 was not one of the nation’s financial capitals. Today it is. Charlotte created an entirely new industry to drive its economy; we did not. If you’re curious about the numbers, the Roanoke Valley’s median household income is $55,151. For the Charlotte MSA it’s $62,068. It’s not 1950 anymore. So how did Charlotte do this while we did not? That brings us to our second point.
2. State legislatures matters. Neither Roanoke nor Charlotte are state capitals but Charlotte has benefited more from decisions made in Raleigh than we have from decisions made in Richmond. That may not have been the intent in either state, but that’s how it’s worked out. Specifically, North Carolina loosened its laws on bank mergers before Virginia did. That meant North Carolina banks grew bigger before Virginia banks did so when interstate banking came, North Carolina banks were in a position to gobble up the Virginia ones —which is why Charlotte today is a banking center and we’re relegated to branch office status. Based on bank assets, Charlotte is the nation’s second-biggest banking center, behind only New York, according to the website Quartz. That’s also generated a spin-off industry — “fintech” is the shorthand to describe financial-related software. Just this past week one of the big news stories in Charlotte was a local fintech company creating 300 new jobs — at an average salary of $72,000, which will help raise Charlotte’s median household income a little more. If the Virginia General Assembly had acted differently decades ago, perhaps those jobs would be created here. That fintech announcement paled, by the way, in comparison to another jobs announcement. Last month, a St. Louis-based health insurance company announced it plans to open a regional headquarters in Charlotte that will create at least 3,237 jobs — and possibly as many as 6,000. The Charlotte Observer said the average salary for those jobs would be $100,089.
3. Local leadership matters. Charlotte did not become a financial center by accident. It had some banking chieftains who were determined to grow. A few years ago the Pittsburgh Post-Gazette tried to figure out why Charlotte, and not Pittsburgh, had become a banking center. Among the people it interviewed was Hugh McColl, whose North Carolina National Bank eventually became today’s Bank of America. “This is a very aggressive part of the world,” McColl said. That’s not a word that would describe Roanoke. Roanoke was content for decades to be a railroad city. That served the city well, economically speaking, when the railroad was a big thing. Roanoke’s relationship with the railroad, though, was a paternalistic one. When Norfolk & Western merged with the Southern Railway and moved its combined headquarters to Norfolk, Roanoke’s first reaction was to adopt a new corporate leader — Dominion Bank, which promptly got vacuumed up by, yes, a Charlotte bank. It really took until the early 2000s for the Roanoke Valley to realize that if it really wanted a new economy, it would have to create one on its own.
4. Geography matters. This one we can’t do anything about. Charlotte is flat. We’re not. Roanoke’s airport was never going to be a major hub the way Charlotte’s is. Deal with it. We are not so concerned about population growth as we are economic growth — which often overlap but aren’t always the same thing. We like our mountains. We wouldn’t trade them for Charlotte’s sprawl. In the past decade or so, we’ve figured out how to make our outdoors a selling point. So yes, geography matters, and in many ways geography is on our side, in other ways it’s not. We just don’t have that many large tracts of land available, which is why the Summit View business park in Franklin County, the Greenfield Center in Botetourt County and the Commerce Park in Pulaski County are so important.
5. Charlotte automatically attracts young talent, we don’t. In March, the Charlotte Business Journal interviewed some of the city’s leaders and asked them what they think the key was to the city’s growth. We’re struck by how many of them mentioned a talented labor pool. They didn’t talk about tax rates, or government-funded incentives, they talked about — in the words of one developer quoted — “trying to make Charlotte a destination for young talent” (which suggests it wasn’t always that way but the result of a specific strategy). With a median age of 34.1 years, Charlotte is one of the youngest places in the country. If Charlotte were a state, it would be the youngest state in the country. By contrast, the Roanoke Valley’s median age is 43.1. If we were a state, only one state (Maine) would be older. There’s nothing wrong with being older — but an older population slows economic growth. An aging population also makes it harder to fill positions when workers begin to retire. That’s why one of the top priorities for local governments is to figure out how to persuade more of the region’s college students to stay here after graduation rather than, say, move to Charlotte.
Now, for the trick question: Will Donald Trump or Joe Biden do anything to help us change these dynamics? Or do we have to figure it out on our own?
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