State of America’s Metropolitan Areas

The Brookings Institution’s recently released Metro Monitor report aims to measure economic progress in the country’s 100 largest metropolitan areas. It does this through measuring growth, prosperity, and inclusion from 2010-2015.

The report measures growth through looking at the overall size of a metropolitan area’s economy. Indicators for growth were change in size of an area’s gross metropolitan product, change in the number of jobs overall, and change in the number of jobs at young businesses. Metropolitan areas with the strongest growth were those that specialize in research and technology and included San Francisco, Denver, Austin, and Salt Lake City. Metro areas in Texas and Oklahoma also fared well due to their status as energy producers. Metro areas that fared the worst included those in New England and the Mid-Atlantic. This is attributed to the fact that these areas did not suffer the same level of economic distress as during the “Great Recession” as other parts of the country and therefore had less room for growth than other regions.

Prosperity is measured through changes in productivity, average annual wage growth, and standard of living (Gross Metropolitan Product divided by total metropolitan population). In measuring productivity, areas with strong concentrations of research and technology such as the Bay area did very well in this metric while regions with economies based on hospitality, health care, education – many of them in the Sunbelt- fared poorly. Average wage growth was once again strongest in those areas where research and technology industries have a large presence it was weakest in those regions dominated by retail and hospitality. Growth in standard of living was highest in areas with advanced economies such as the Bay area. Standard of living also showed strong growth along with what the report terms the “auto corridor” which runs through Michigan, Ohio, Kentucky, and Tennessee. Interestingly enough, many of the country’s most prosperous regions such as Washington, DC and Portland scored poorly in this metric.

The report notes that there were a number of regions with strong job growth but poor productivity gains, something that is relatively uncommon. This is attributed to two factors. After the recession ended job growth was slow but productivity gains were strong. As a result the job gains in areas with low productivity growth may be job growth catching up with earlier productivity gains. The second factor is that in some regions, the strongest employment gains were in industries such as a retail, hospitality, and healthcare. Such industries tend to have lower productivity.

Inclusion was measured in terms of change in the median wage, change in the share of individuals earning less than half the local median wage, and change in the employment rate. Employment rates improved in almost all large metro areas. There was especially strong growth in regions hit hard by the recession. These areas include the Rust Belt regions that suffered job losses in manufacturing and metro areas hit hard by the housing bust. Those regions that had the smallest job growth included places like Washington, DC that already had strong economies to begin with and therefore less room for growth.

Inequality within and among regions is a major theme in the report. Of the 100 metros studied only 14 of them did better than the average of their peers when it came to growth, prosperity, and inclusion. 23 of the metros studied (including Baltimore) did worse than their peers on all metrics studied by the report. What the report tells us is that policymakers need to do more to tackle inequality and ensure there is shared prosperity.

Baltimore’s below average scores may not be much cause for alarm. As the report points out, both Philadelphia and Washington, DC also scored below average in all metrics measured by the study, these areas are already among the nation’s largest and most prosperous.

In analyzing the report’s results, it’s important to understand that the report tracked changes in the metrics it studied. As the study itself points out, in areas like Baltimore that fared pretty well through the recession, there may not be much room for growth. This may be why Baltimore did not do as well as other regions that were hit hard by the recession but then bounced back. However, the significant disparity among metro areas in the report may be useful in understanding why so many in this country feel such significant economic anxiety despite a strong national economy.

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Gregory Friedman

Gregory Friedman

This article was written by Gregory Friedman. Click here to meet our writing team.

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