Metropolis is a column about the intersection of technology, business, and cities.
It’s not Instagram, but it may as well be. Tucson, Arizona, flaunts its star-filled desert sunset landscapes, taunting you with the thought that this could be your backyard view. Northwest Arkansas sells itself with a thrilling picture of a mountain biker navigating an elevated trail: sparkling water on one side, lush forests on the other, and, one assumes, a bright, adventurous future ahead. Vermont’s photos — small towns, steeples, and all, framed by rolling green mountains — tug at one’s sense of nostalgia. These aren’t ads targeted at tourists. They’re marketing campaigns aimed at convincing young, hungry talent to take a gamble on a new place alongside a less romantic reason to explore a new city: cold, hard cash.
Call it the new $10,000 question: Would you move to northwest Arkansas? The area and an increasing number of cities and states — Vermont; Tulsa, Oklahoma; and Savannah, Georgia — are providing five-figure incentives to lure talent. The $10,000 welcome gift wasn’t determined via a careful analysis or formula, according to Ben Stewart, executive director of Tulsa Remote, one of the first remote work incentive programs. It was simply enough to grab attention and defray the cost and risk of a move. In an economy increasingly untethered from the traditional office, it also may be the answer for an emerging Zoom commuter workforce.
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This is the “revenge of the small city,” says Liz Pocock, who oversees Remote Tucson, the Arizona city’s nascent incentive program that launched in November. In an era when talent has finally been uncoupled from an office, the economic competition between cities isn’t just about marquee companies and their headquarters, she says. Now it’s about quality of life and natural amenities.
States and cities dole out $70 billion a year to companies to attract jobs.
When these programs began emerging in 2019, on the heels of Amazon’s HQ2 — a costly poster child for problems with corporate welfare — they were viewed as curiosities. With tech employment concentrated in a few superstar cities, early programs from Vermont and Tulsa produced somewhat incredulous headlines, a mix of “Can you believe it?” and “Could you imagine making the move?”
Two years later, as the pandemic has rewritten the rules of remote work, these campaigns seem prescient. Directors from programs in Vermont, Tucson, northwest Arkansas, and Tulsa all say they’re booming, attracting tens of thousands of applicants and exceeding expectations. These quirky experiments may just be the future of economic development. “Job location just isn’t a limiting factor anymore,” says Pocock. “Not only do workers who move here provide a direct economic benefit — if they worked for a Los Angeles firm, their salary is basically investing California money in Arizona — but they can be innovators, job creators, and mentors for our region.”
Each city or state’s program differs, but they share common sweeteners: money to defray moving expenses as well as online communities and Slack channels for new arrivals to meet each other and get connected. Then there are the other amenities, such as co-working memberships, homeownership programs, and meetups to help new arrivals get rooted in the community. In Tucson, new arrivals get a package worth $7,500, including consultations with local realtors and gift baskets with local coffee and beer and restaurant gift cards. The Life Works Here initiative in northwest Arkansas provides $10,000 and a mountain bike, a nod to the area’s famous trail network. Vermont has a $7,500-a-year reimbursement plan in the works.
Economic development has come a long way since it was pioneered in 1930s Mississippi during the Great Depression. A program called Balance Agriculture With Industry sought to bring manufacturing jobs to the Deep South, with local communities signing promissory notes that would guarantee bank loans and back the construction fees for new factories. It has evolved — some might say devolved — over time, from the boom in corporate headquarters in the ’50s and ’60s to today’s cutthroat competition over who can offer the best package of tax breaks and subsidies. Good Jobs First, a Washington, D.C., policy group that studies such subsidies, estimates states and cities dole out $70 billion a year to companies to attract jobs. Greg LeRoy, executive director of the group, compared the plight of cities to inexperienced gamblers sitting down at a card table with sharks: “Public officials are playing poker with a weak hand; their role is to wait for companies to come and knock on the door and put as much money on the table as possible.”
The Amazon HQ2 contest, which asked cities to spend millions begging for the largesse of Jeff Bezos and company, and the continued debacle over a promised Foxconn plant in Wisconsin, which still hasn’t broken ground despite billions of dollars in investment and subsidies, are just two of the latest and most egregious examples of what’s become business as usual. If $10,000 seems like a lot, the Foxconn subsidies added up to $230,000 per job, many of which may never materialize.
Northwest Arkansas, which will invest more than $1 million in its remote worker program, says it has received 26,000 applications for the first class of 100, which includes 2,600 highly qualified coders, engineers, award-winning artists, venture capitalists, and company founders.
In 2019, when Vermont invested $125,000 to test out a program to attract talent to rural areas of the state, it “took off,” says Joan Goldstein, commissioner of the state’s Department of Economic Development. Competing on quality of life and outdoor recreation instead of brick-and-mortar office jobs was a game-changer. “The press loved it,” she says. “Not sure why it hit such a nerve, but the press created more positive marketing than we could have ever imagined.”
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Tulsa Remote also quickly grew beyond early expectations. Since launching in 2018, the initiative, funded by the local George Kaiser Family Foundation, has recruited more than 600 people and continues to expand. Last year, it welcomed 400 people and is on track to add 750 in 2021. After receiving 50,000 applications, it’s arguably more selective than some colleges.
In Vermont, Gov. Phil Scott included $500,000 annually for the program in the budget he submitted to the state legislature, and there’s talk of doubling that, according to Goldstein. Tucson, which launched the program in November, received 600 applications for just 10 spots; Pocock claims for every $1 it spends on the program, $40 is invested in the community. Tulsa Remote’s early results are promising, Stewart says: 90% of first-year members stayed, and of the 600 new potential Tulsans the program has brought to town, 140 have purchased homes. Northwest Arkansas, which will invest more than $1 million in its remote worker program, says it has received 26,000 applications for the first class of 100, which includes 2,600 highly qualified coders, engineers, award-winning artists, venture capitalists, and company founders.
Still, LeRoy of Good Jobs First cautions against assigning too much success to these new arrivals. The test will be how they mesh with the local economy in the long term and, ultimately, whether the shift to remote work becomes permanent (he thinks it’s a fad). Others worry the relocation market may already be getting saturated. Mark Rembert, head of the Rural Innovation Network, says these programs only work when a few places are doing them. If every city jumps on the bandwagon, it will become harder to lure new residents — or more expensive as everyone simply chases the highest incentive.
Another concern is that this is a local-first push that, like many other forms of economic development, doesn’t actually directly focus on the locals. The programs are more selective about talent and jobs, providing a personal touch to recruiting, but they ultimately move talent around and don’t develop it in their backyards. Sure, it’s great to stem the widening inequality between cities, but it’s also investing in talent that’s already realized.
“There’s a large body of scholarship saying the only two things we know for sure about job creation is investing in education and infrastructure,” says LeRoy. “Everything else is conjectural.”