Why Is Nashville Booming While Memphis Busts?

Why Is Nashville Booming While Memphis Busts?

Downtown Nashville is a thriving city, while Memphis is floundering. Credit: Wikipedia Commons

Downtown Nashville is a thriving city, while Memphis is floundering. Credit: Wikipedia Commons

One was recently named the second-best big city for jobs, with an unemployment rate just over 5 percent. The other has an unemployment rate of 7.9 percent, and has been one of the slowest cities in the nation to recover from the Great Recession.

One has a show named after it, a thriving culture and was described by Forbes as “Nowville.” Meanwhile, the other was described by Forbes as being the third-most miserable city in the United States and the second-most dangerous city in the United States.

One has attracted 48 percent more college graduates to its population of 25 to 34 year olds since 2000, according to the New York Times. The other saw a 10 percent increase of young college graduates over that time, one of the lowest increases in the country, according to the newspaper.

Simply put, the former – Nashville – has thrived over the past decade while the latter – Memphis – has floundered. This, despite them being a three hour drive from each other, sharing the same state government and featuring many of the same attractions (i.e. country music).

Why? Well, there are a lot of reasons, but they come down to one thing: leadership.

Overview

As mentioned, Nashville and Memphis both have similar selling points. Both are hotbeds of country music, a genre that has exploded in popularity since 2000.

Both have the benefit of being in Tennessee, which has warm weather and the sixth-lowest tax burden in the United States, including no income tax. Nashville has a (poor) football team and an (okay) hockey team, while Memphis has a (very strong) basketball team.

Memphis’ population is about 650,000, a slight decrease since 2000, when the census reported the population to be 691,000. Nashville’s population is around 610,000, an increase since 2000, when the census reported the population to be 545,000.

Geographically, neither is near the ocean, with Nashville being bigger by about 150 square miles. Fundamentally, there isn’t a whole lot of difference between the two cities, and in 2000, they had similar economies as well.

So what changed? Let’s see…

Strategy

First off, Nashville and Memphis took very different strategies in building their cities over the past decade or so. Nashville has spent money investing in large public works projects, whereas Memphis has used money to offer businesses tax incentives to move in.

Specifically, Memphis granted 415 tax freezes between 2001 and 2011 to businesses that would relocate or expand within the city, according to Smart City Memphis. Nashville, meanwhile, only granted five tax freezes over that same period, according to the website.

However, Nashville did put money into projects that benefitted the public as a whole. Most notably, it fostered the construction of a $600 million convention center called “Music City Center” that looks like a giant guitar and opened in 2013.

The Memphis “tax freezes” often were shrouded with claims of corruption, with many arguing that the politically well-connected were benefitting, instead of the most deserving. Those sorts of allegations often come with those types of government programs, with example after example of power-hungry politicians using incentives to benefit their money-hungry friends.

More than that, a business coming to a city is good, but a tax break helps the business more than it helps the city. Businesses, for example, aren’t going to lure tourists to Memphis.

Conversely, having something like a convention center in your city is, by its very definition, going to bring in a lot of outsiders. That makes for a more vibrant downtown, creating a place people really want to live in.

Leadership

The root cause for the difference between the two cities, beyond just their economic development strategy, is their leadership. Memphis’ longtime mayor Willie Herenton’s was contentious and he wasn’t a leader, particularly on crime.

Herenton was a controversial figure before he was first elected as mayor of Memphis in 1991. Right before his mayoral victory, he resigned as superintendent of Memphis schools for allegedly having an affair with a subordinate woman, after he promised her that her “future and career will be outstanding.”

He served as mayor of Memphis until he resigned on July 30, 2009. That came after he originally planned to resign in 2008 – a mere 90 days after he won reelection – only to stay on until 2009.

During his tenure, Herenton was criticized for everything from underfunding schools to his allegedly fraudulent way he handled the funds associated with the construction of the FedEx Forum (where the NBA’s Memphis Grizzlies play).

Worse than all of that though was his refusal to take on the Memphis’ crime epidemic, the main reason the city’s growth was stagnated. When asked what he would do to fix it, Herenton said that “no mayor in any American city can solve the crime problem.”

Not exactly great leadership. And not exactly true, either. In the 1990s, New York City Mayor Rudolph Giuliani made reducing crime his number one priority, and crime rates plummeted during his tenure.

Nashville, meanwhile has had two mayors since 2000: Bill Purcell and Karl Dean. Both men had relatively stable and popular administrations, with both men garnering at least 79 percent of the vote in their election bid for a second term.

Takeaway

Fundamentally, there’s no reason Nashville should be one of the most rapidly-growing cities in the country, while Memphis is named one of the most miserable. And yet, that’s exactly what has happened.

We live in a world now where corporations are incredibly powerful and people can interact with each other seamlessly across the globe. And yet, something as simple as local politics can still have a dramatic effect on people’s lives.

Bottom line, like it or not, Nashville and Memphis both prove that government matters. Strong leadership can foster growth, corrupt government can destroy it.

For a city or a state or a country to succeed, it needs a government that is going to be fair and knows when to stay away (like picking winners and losers in the economy) and when to get involved (like making an effort to stop crime).

Just ask Memphis.

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