Why Small Midwestern Cities Are Bucking the National Unemployment Crisis

When you drive through Fort Wayne, Indiana on a Tuesday morning, you’ll notice that there’s a certain level of activity on the streets. It’s not the hectic energy of a boomtown, but rather something calmer and more stable. Somewhere nearby, construction equipment is in motion. Near the town’s edge, a new distribution center is being built. Help-wanted signs have been in the windows of Main Street businesses for so long that they are beginning to fade. The unemployment rate in Fort Wayne has been approximately 2.5 percent, which is significantly lower than both the national and Midwest averages. That figure is impressive for a mid-sized city that hardly makes an appearance in national economic discussions.

The same kind of subdued surprise is present in the larger Midwestern picture. The Midwest had the highest prime-age employment-to-population ratio (81.9%) and the lowest regional unemployment rate (3.2%) in the nation as of May 2023. The American Heartland’s economic story has been told for decades, mostly through pictures of closed factories, deserted main streets, and a population that is steadily moving southward toward the Sun Belt. These are not the numbers that most people associate with the region. The Midwest has a real and documented history of wage stagnation, union erosion, and industrial decline. That’s all true. However, the employment situation in city after city, including Columbus, Des Moines, Madison, Grand Rapids, and Omaha, appears to be very different from the national concern about employment.

When you examine which particular cities are performing well, the divergence is most evident. By 2050, Columbus, Ohio is expected to have three million residents, one million more than it does now. A large portion of this growth will come from job growth. Dublin, a suburb of Columbus, has developed into an employment destination that analysts describe as truly competitive with locations anywhere in the nation. A decade and a half ago, this claim might have seemed absurd. After conducting what its CEO called “extensive competitive research,” Williams Lea, a multinational financial services company with headquarters in Wheeling, West Virginia, decided to expand 550 jobs in Columbus rather than West Coast markets. The company mentioned the breadth of the local talent pool, the close proximity to universities, and—a common theme in Midwestern success stories—the extreme affordability of operations in comparison to well-established coastal hubs.

Des Moines presents a similarly paradoxical image. It is ranked as the 13th strongest metro economy in the country by POLICOM, a list that most people would assume would be dominated by Sun Belt and coastal cities. According to Mary Bontrager of the Greater Des Moines Partnership, her city is “an outlier” because it is the Midwest metro with the fastest growth in terms of employment, population, and GDP per capita, surpassing Chicago, St. Louis, Kansas City, and Indianapolis. What is truly intriguing is the in-migration data. Young workers in their mid-twenties and early thirties who are drawn by what Bontrager refers to as “the three A’s”—affordability, accessibility, and achievability—are increasingly coming from California, Texas, and the Northeast, in addition to Chicago and Minneapolis. Compared to Silicon Valley, Des Moines has a lower median age. It takes a moment to fully comprehend that sentence.

Observing all of this from a distance gives one the impression that what’s taking place in these small and medium-sized Midwestern cities is at least partially the result of a long-overdue adjustment to the way talent is distributed in the United States. For many years, it was believed that aspirational young workers needed to relocate in order to pursue fulfilling careers, such as to New York, San Francisco, Austin, or Nashville. That calculation was jumbled by the pandemic in ways that are still being figured out. Due to remote and hybrid work, geography no longer determines one’s career ceiling as it once did. Suddenly, cities that rented a studio apartment in Brooklyn for the price of a three-bedroom house began to appear less like compromise and more like strategy.

However, portraying the employment story in the Midwest as consistently positive would be dishonest. The Black unemployment rate in the Midwest is more than 2.5 times higher than the white unemployment rate, which stands in stark contrast to the region’s headline-level statistics. This racial employment disparity is alarming. The steepest decline of any U.S. region, union density fell from 28.9 percent in 1979 to 11 percent in 2022. This change has slowed wage growth for average workers even as employment totals appear healthy. Youngstown, Flint, Rockford, and Saginaw continue to be listed as America’s fastest-shrinking metro areas, hollowed out by manufacturing losses that never fully recovered after the early 2000s. These cities are not the same ones that are struggling. Not all of the Midwest is doing well. It’s splitting into cities that have figured something out and cities that are still awaiting an answer.

The cities that are thriving have a common set of traits. Large research universities are close by, providing a steady stream of locally skilled workers who decide to remain. Deliberate talent attraction campaigns: Des Moines held pop-up recruiting events in Manhattan’s Chelsea neighborhood, showcasing real Iowa properties and salaries to New Yorkers. This seemingly counterintuitive strategy appears to have worked. economies that are diversified and not reliant on any one sector or employer. Additionally, as the cost of living along the coast has driven out entire segments of the workforce, this affordability advantage has become increasingly valuable. It’s still unclear if cities like Madison and Columbus can maintain this momentum in the face of future economic challenges or if their current strength is a holdover from the pandemic that will diminish as the labor market returns to normal.

The underlying reality, however, is what seems enduring: some of these locations created something genuine. Not only are there jobs, but there are communities where it makes sense to stay. The story of the Midwest is more complex than just decline halted by a federal relief package. It is about a few cities making the deliberate, low-key decision that they would not wait for someone else to define what they could become.