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Less Restriction Leads to Job Growth in Anaheim

Tuesday, November 29, 2005
OC Register

Where the jobs are

Decades of government programs have not improved employment in the inner cities

A report by a think tank called the Initiative for a Competitive Inner City recently completed a survey of job growth in America's inner cities and found a troubling but not-too-surprising result. Despite massive infusions of federal and state development dollars, most inner cities nationwide have lost jobs.

"Nearly half of the country's 82 largest municipalities lost jobs from 1995 to 2003," reported the Associated Press. "By comparison, only one of the surrounding metropolitan areas lost jobs during the same period." AP did its own analysis and "found that most inner cities targeted by the federal government's primary urban economic programs lost jobs as well."

This isn't counterintuitive. Dumping government dollars on problems rarely helps, and it often makes things worse by imposing bureaucratic restrictions and rewarding bad behaviors.

The study found 10 cities where job growth was better than in the surrounding metropolitan area between 1995 to 2003. One of those is Anaheim, which has a lively inner city. Part of the reason, the report explains, is the growth in immigration. This, too, is not surprising.

The reason some inner cities will prosper while others won't relates to the regulatory and business climates.

A Housing and Urban Development spokesman told AP: "We're not trying to preach to people that you are over-regulating. But it is true that in some parts of the country the regulatory climate puts out the unwelcome mat."

In other words, most cities are over-regulating, although we understand why a federal regulator might be loathe to say so bluntly.

It's noteworthy that Anaheim, in recent years anyway, has recognized that key point better than any other city we can think of nationwide. The city, building on its base of small and immigrant businesses, is loosening up land-use restrictions, declaring a business tax holiday and imposing other business-friendly measures that encourage business creation rather than stifling it.

"My experience confirms my overall philosophy: Over-regulation harms business growth and development," Anaheim Mayor Curt Pringle said. "Cutting regulations and taxes spurs economic development."

That - not federal dollars - is the real key to inner-city revival. We're pleased that some people are starting to notice.