How much of a "company town" is your city -- and is that good or bad?

[mhays]

Living in a company town can mean riding a roller coaster blindfolded -- big highs, big lows, and never knowing what's next. But the highs can last for decades, and the lows aren't necessarily that problematic.

Here's a question: How much is your city tied to a small number of big employers, or just a few sectors? How helpful or risky is that? Or are you glad your city is more diversified? For the discussion, ideally these employers make their money nationally/globally and might be at risk of big swings, vs. mostly serving local customers.

Seattle is certainly one, dominated by four employers with varying ups, downs, and risks. Amazon, Boeing, Microsoft, and the military each employ somewhere in the 60,000 range locally. Some of these have been volatile, particularly Boeing. The multiplier effect from the 240,000 and other company spending might support 800k to 1m local jobs out of 2.25m total. What happens if HQ2s multiply, or Boeing ships more production to Charleston?

Detroit, DC, Norfolk, San Francisco, Orlando, Las Vegas....but really every city to some extent?

[Crawford]

There are arguably safe/steady "company towns." DC is essentially a "company town" and largely immune to recession. Boston, too. Neither DC nor Boston will ever achieve the boomtime highs of a Bay Area or Seattle, but they're almost guaranteed slow, steady growth, as long as there's a federal govt. and higher ed.

[Steely Dan]

Chicago is pretty well diversified.

or more negatively, a jack of all trades, master of none.


From wikipedia:

Chicago and its suburbs is home to 35 Fortune 500 companies and is a transportation and distribution center. Manufacturing, printing, publishing, insurance, transportation, financial trading and services, and food processing also play major roles in the city's economy.

Other than various government entities, there is no single private sector company that employs more than 20,000 people in the city.

And though there are a fair number of F500 HQ's, from a variety of different industries, located here, none are ranked particularly high, other than Walgreens at #17.

[SIGSEGV]

Not sure how much of a company town Boston really is. I feel like there's probably more biotech employees than higher ed employees.. .

[Crawford]

Maybe? Biotech is huge and more exposed to economic cycles, but Boston has a crapload of major universities.

[Cirrus]

DC is less of a company town than people assume.

I won't say it's not one at all. Don't come at me, the three of you who will be offended by this statement. Obviously the federal government is the anchor, and you can draw some kind of connection between the federal government and a lot of the other things that have grown or relocated here. The federal government absolutely stabilizes the economy, and there would be an unprecedentedly gigantic recession here if it ever left. That's all true.

But the image of DC as a federal city with little else going on that accurately permeated the national consciousness from ~1850 to 1950 isn't remotely accurate anymore. It's a pretty dynamic city these days. What does remain true is that it's still overwhelmingly white-collar and service-oriented. There's no industry. No meaningful manufacturing or port. But the white-collar jobs are vastly more diverse than just the government and lobbying sectors.

[mhays]

Originally Posted by Cirrus

DC is less of a company town than people assume.

I won't say it's not one at all. Don't come at me, the three of you who will be offended by this statement. Obviously the federal government is the anchor, and you can draw some kind of connection between the federal government and a lot of the other things that have grown or relocated here. The federal government absolutely stabilizes the economy, and there would be an unprecedentedly gigantic recession here if it ever left. That's all true.

But the image of DC as a federal city with little else going on that accurately permeated the national consciousness from ~1850 to 1950 isn't remotely accurate anymore. It's a pretty dynamic city these days. What does remain true is that it's still overwhelmingly white-collar and service-oriented. There's no industry. No meaningful manufacturing or port. But the white-collar jobs are vastly more diverse than just the government and lobbying sectors.

Well I...never!

I see 200,000 federal employees in DC and it must be what, 100,000 more in the metro? I'm being lazy.

With typical multipliers let's say 900,000 local jobs minimum are supported by federal agencies, or maybe 1,200,000 depending on wage levels, out of 3,450,000? That's enormous.

That might be a little under Seattle's percentage (among four employers) but only because tech HQs tend to pay well. Caveat...lots of apples and oranges here. I'm not counting other federal jobs in Seattle, or Navy-dominated Kitsap County. If greater DC added its next three big employers (Amazon?), its numbers might be similar to Seattle's top four. I'm largely ignoring other spending by these employers, which can be enormous for construction in particular. And I'm only using guessing from standard 3x and 4x multipliers.

[iheartthed]

I think true "company towns" get problematic when the line between governance and industry gets too blurry. Well governed cities should operate under the perpetual assumption that their city's biggest industry might not be the biggest industry in twenty years. From afar, it seems like Seattle has done a good job in that regard. The largest employer in Seattle 50 years ago (Boeing), was not the largest employer 25 years ago (Microsoft), and the largest employer today (Amazon) isn't the same as 25 years ago.

[202_Cyclist]

Originally Posted by Cirrus

DC is less of a company town than people assume.

I won't say it's not one at all. Don't come at me, the three of you who will be offended by this statement. Obviously the federal government is the anchor, and you can draw some kind of connection between the federal government and a lot of the other things that have grown or relocated here. The federal government absolutely stabilizes the economy, and there would be an unprecedentedly gigantic recession here if it ever left. That's all true.

But the image of DC as a federal city with little else going on that accurately permeated the national consciousness from ~1850 to 1950 isn't remotely accurate anymore. It's a pretty dynamic city these days. What does remain true is that it's still overwhelmingly white-collar and service-oriented. There's no industry. No meaningful manufacturing or port. But the white-collar jobs are vastly more diverse than just the government and lobbying sectors.

I absolutely agree. As you note, the federal government is still the most important employer but the DC-area also has sizable higher education, real estate, and finance sectors, as well as a handful of Fortune 500 companies.

[mhays]

Biotech, finance, and tech have all had significant flux over the years.

Didn't something like 50,000 get laid off in NYC in during the mortgage crisis?

Tech wasn't so bad in the 2022/23 downturn but got hit badly in 2001.

Biotech has been in a soft downturn lately, and is also heavily influenced by the product trial/failure cycle, buyouts/consolidation, and the resulting dependence on start-up capital. A few cities have stable ecosystems (so far), but everyone else rides the swings.

Higher ed seems to be at an inflection point with attendance way down overall. But it doesn't seem to apply to the more sought-after universities. Maybe this means Boston is ok, and so are the top state universities, but others might suffer.

[Crawford]

I agree that DC is way less of a company town than in the past. But I also think it might still be the biggest company town of all. The feds matter to DC way more than tech matters to the Bay Area. That gigantic white collar ecosystem, from the biglaw firms, to the lobbyists to the associations, are all revolving around the feds. And this extends deep into the burbs, with NIH, the Pentagon and the like creating their own ecosystems.

[xzmattzx]

Company town or industry town? A company town, to me, is a place where the economy revolves around one business, like an oil refinery or food processing plant. I can't really think of any examples of cities of any significant size where only one entity is the main factor in the economy, other than Washington, DC, which has the Federal government. On the other hand, an industry town is one dominated by an industry, even if there are multiple companies in that industry. Car companies in Detroit or casino companies in Las Vegas are ones that quickly come to mind.

[lio45]

Originally Posted by xzmattzx

Company town or industry town?

Exactly, huge difference.

A one-industry town (or city) is still vulnerable, but less so than a one-company town when that company is in an industry that isn't forced to be there, and has competitors in other locations.

[muertecaza]

Phoenix was famously one of if not the poster child for economic stagnation in and coming out of the Great Recession, due to a heavily real estate-construction-sprawl oriented economy. The accepted wisdom and the thesis of the booster organizations is that we've diversified since then, but I have my doubts. We haven't really tested the thesis, as property values have basically only gone up since then. And construction at least has only increased as a percentage of both employment and GDP. I do think we're more diversified, probably enough that I wouldn't call us a "company/industry town" in the spirit of the thread. But we're still sprawling, and I still think we'd be hurt more than average in another real estate crisis.

[mhays]

Snowbirds? Baseball? Chips? It's a unique mix.

I'm definitely using "company town" too broadly here.

[JManc]

Houston is tied to an industry more so than a handful of companies but if one (especially a major or producer) gets sick, they all sneeze. Luckily the economy is much more diversified that it was so less dramatic boom and bust cycles.

[chris08876]

Where I'm at, in the Easton PA area or really, the whole Lehigh Valley area in PA, its a massive and I mean massive logistics, 3pl, warehousing and manufacturing hub. In terms of the NY CSA and its fringe proxies, it is a large logistics hub. And they continue to build warehouses all along the route 22 and I-78 corridor, all the way up to Bethel PA and Harrisburg. Word is, near Stroudsburg PA, big industrial park is in the works, we are talking several million square feet.

I suppose it somewhat makes the Lehigh Valley and its immediate fringes a "diverse" company town. Not one that is concentrated in any city but more the local region. Mix of a ton of blue collar and white collar jobs. Sort of similar to the Edison NJ area with a shit ton of warehousing and manufacturing.

Medical equipment, food, crayons, accessories for warehouses, MHE, and so on. Diverse portfolio of goods and services in this region.

Its a good thing for future growth and the region has grown. I believe its one of the fastest growing regions in PA, the Lehigh Valley. Third largest too, with Philly and Pittsburg being 1st and 2nd. Still... 3rd is okay.

Also... a ton of fellow NJ, CT, and NYC folks are moving to the region, modernizing it. A good thing. Things get real backwards minute you go West of Harrisburg and so... stick to Eastern PA for civilization and good local policies.

The dividing line between humans and the Hills Have Eyes folks is beyond that Western barrier...!

[Crawford]

Originally Posted by chris08876

Where I'm at, in the Easton PA area or really, the whole Lehigh Valley area in PA, its a massive and I mean massive logistics, 3pl, warehousing and manufacturing hub. In terms of the NY CSA and its fringe proxies, it is a large logistics hub. And they continue to build warehouses all along the route 22 and I-78 corridor, all the way up to Bethel PA and Harrisburg. Word is, near Stroudsburg PA, big industrial park is in the works, we are talking several million square feet.

My wife works in logistics. The two biggest port-to-consumer intermodal logistics hubs are the SFV, east of LA (stuff arriving from Ports of LA/LB) and Western NJ/Eastern PA (stuff arriving from Ports of NY/NJ). That's why, especially since the pandemic, you see an explosion of warehouses east of LA and west of NY. All the crap we import makes its way into the interior. Lehigh Valley is crazy with warehouses and intermodal.

[DCReid]

I can't think of any US company towns in the current times. They seemed to have been more prominent before the 1970s when manufacturing was a large part of the economy. I'm thinking places like Rochester, Flint, Gary. But their fortunes faded as their companies faded. Wiki says Pullman in Chicago was a company town. I guess some of the rural areas may have company towns such as some of the large auto plants in the south and midwest rural areas. There seem to be many industry towns, and their fortunes can go either way with the boom and bust of the industry if they have too much of the industry. I'm thinking Houston, San Jose, and Detroit are prime examples. If you consider a university akin to a 'company', those seems that best 'company' towns in terms of economies and desirability. Places like Ann Arbor, MI, Athens GA, etc.

[xzmattzx]

Originally Posted by DCReid

I can't think of any US company towns in the current times. They seemed to have been more prominent before the 1970s when manufacturing was a large part of the economy. I'm thinking places like Rochester, Flint, Gary. But their fortunes faded as their companies faded. Wiki says Pullman in Chicago was a company town. I guess some of the rural areas may have company towns such as some of the large auto plants in the south and midwest rural areas. There seem to be many industry towns, and their fortunes can go either way with the boom and bust of the industry if they have too much of the industry. I'm thinking Houston, San Jose, and Detroit are prime examples. If you consider a university akin to a 'company', those seems that best 'company' towns in terms of economies and desirability. Places like Ann Arbor, MI, Athens GA, etc.

I think the only company towns nowadays are those little towns in Iowa with a meat-processing plant. You hear about the plant closing and the town losing its only employment center. Something similar can probably be found in rural areas around the country.