Nebraska's Secret Gem: A Recession-Proof City
WHY YOU SHOULD CARE
Because that Nebraska sound you hear isn’t corn rustling; it’s Lincoln hustling.
By Nick Fouriezos
There are certain things you can count on. For instance, on Saturdays in the fall, the state capital of Nebraska will swell with Cornhusker pride, as tens of thousands of fans fill a college football stadium that has sold out nearly 400 straight games over almost four decades. And in the spring, Nebraska’s unique, nonpartisan unicameral legislature will meet for a different kind of contest: the grappling over bills, a legislative wrangling the state has undergone in some form for long over a century.
At the center of all this action is Lincoln, a city that’s been called recession-proof. The consistency of its traditions on the gridiron and in politics has also extended to the workforce. According to the U.S. Bureau of Labor Statistics:
Lincoln had just 2.4 percent unemployment at the end of last year — and even in the depths of the great recession, it never exceeded 4.7 percent.
That’s compared to the current 4.1 percent national unemployment rate, which hit as high as 10 percent countrywide in October 2009. But the Great Plains stronghold has remained remarkably stable for decades. Even at the height of the 1980s farm crisis, the unemployment rate never rose higher than 6.3 percent, according to the U.S. Bureau of Labor Statistics. That may seem surprising: After all, Nebraska is nicknamed the Cornhusker State for a reason, and that’s mostly due to its reputation for agrarian output. However, the University of Nebraska-Lincoln and the industry surrounding the workings of the state legislature have created a buffer that’s kept the 300,000-person city working, even amid downturns. That plus a reinvestment in downtown and a growth in a nascent tech scene have kept Lincoln positive. “The first catalyst has been growth in the tech industry,” says Jim Vokal, chief executive officer of the Platte Institute for Economic Research, a think tank based in nearby Omaha.
Nebraska has had historically low unemployment and a high labor force participation rate, but those come with what Vokal calls a few red flags. “We haven’t had population growth in Lincoln, and our rural population has been going down over the last two decades. The family farm concept isn’t there anymore: We’re more of a corporate farming–based state.”
That’s not uncommon for the Midwest, but the Nebraska geography or story hasn’t lent itself to tourism yet either, which also affects an ability for a state to attract new talent. “We’ve figured out through tracking tax returns that we’ve lost $3 billion in adjusted taxable gross income since 1992,” Vokal says.
The consistency of commodity prices has helped Lincoln stay afloat, as tax money from corn farms remained high amid $8 per bushel prices for corn during the Great Recession (more recently, though, a shift in the market has dropped corn down to $3 per bushel). Still, the opening of Pinnacle Bank Arena in 2013, which has hosted college basketball games and musicians like Jason Aldean and Michael Bublé, quickly led to nearly $400 million in investments to remake a former rail yard west of Lincoln’s Haymarket district.
Perhaps most important, Lincoln was named the fourth-best startup community in the 2016 State of the Silicon Prairie Report, which examined cities in Nebraska, Iowa, Missouri and Kansas for their status as frontiers for innovation. Although the report noted that Lincoln “drags a bit on corporate innovation and building sustainable companies,” it concluded that the community had rallied around its startup scene, including with a #bangthedrum social campaign to trumpet achievements. As the report concluded, the campaign’s success has allowed the startups “to compete outside their weight class.”