Decade since recession leaves some cities behind
As the nation’s economy was still reeling from the body blow of the Great Recession, Seattle’s was about to take off.
In 2010, Amazon opened a headquarters in the little-known South Lake Union district – and then expanded eight-fold over the next seven years to fill 36 buildings. Everywhere you look, there are signs of a thriving city: Building cranes looming over streets, hotels crammed with business travelers, tony restaurants filled with diners.
Seattle is among a fistful of cities that have flourished in the 10 years since the Great Recession officially began in December 2007, even while most other large cities – and sizable swaths of rural America — have managed only modest recoveries. Some cities are still struggling to shed the scars of recession.
In the decade since the recession began, the nation as a whole has staged a heartening comeback: The unemployment rate is at a 17-year low of 4.1 percent, down from 10 percent in 2009. Employers have added jobs for 86 straight months, a record streak. And last year, income for a typical U.S. household, adjusted for inflation, finally regained its 1999 peak.
Yet the rebound has been uneven. It’s failed to narrow the country’s deep regional economic disparities and in fact has worsened them, according to data analyzed exclusively for The Associated Press. A few cities have grown much richer, thanks to their grip on an outsize share of lucrative tech jobs and soaring home prices. Others have thrived because of surging oil and gas production.
But many Southern and Midwestern cities – from Greensboro, North Carolina, to Janesville, Wisconsin — have yet to recover from the loss of manufacturing jobs that have been automated out of existence or lost to competition from China, before and during the recession. Like others, they have fewer jobs and lower household incomes than before the downturn.
Those disparities complicate the rosy picture painted by most nationwide economic data. With the nation enduring a widening wealth gap, an overall robust U.S. economy doesn’t necessarily translate into widely shared prosperity.
“There’s definitely a pattern of the coasts pulling away from the middle of the country on income,” said Alan Berube, an expert on metro U.S. economies at the Brookings Institution. “There are a large number of places around the country that haven’t gotten back to where they were 15 years ago, never mind 10 years ago.”
Among the nation’s 100 largest metro areas, San Francisco experienced the biggest gain in median household income in the decade after the recession began. Adjusted for inflation, it jumped 13.2 percent, according to Moody’s Analytics data. San Jose, in Silicon Valley, enjoyed the second-largest increase, at 12.7 percent, followed by Austin, Texas, with 8.8 percent.
By comparison, median household income in the 100 largest metro areas actually fell 2.7 percent, on average. And the income gap between the 10 richest and 10 poorest metro areas has widened in the past decade, Moody’s data shows.
Eight of the 10 cities with the largest income gains are “tech hubs,” with heavy concentrations of software architects, data analysts and cloud-computing engineers. They include Denver; Portland, Oregon; Provo, Utah; and Raleigh, North Carolina.
Pittsburgh has experienced the ninth-largest income gain, thanks to increased tech and health care jobs. Oklahoma City, where inflation-adjusted incomes are up 5.5 percent, has benefited from the oil and gas boom.
Most Americans haven’t received raises anywhere near that large. Data compiled by Brookings shows that 65 percent of residents in urban areas — defined as cities with populations above 65,000 — live in places where the typical household income is still below its 1999 level.
Industries and occupations in slower-growing regions were leveled by the recession. Manufacturing and mining are disproportionately located in red states. So are retail jobs. All those sectors have endured weak growth since the recession.
Robin Brooks, an economist at the Institute of International Finance, a trade group, says those job losses have opened a gap between so-called “red” states, which voted for Donald Trump in 2016, and “blue” states.
About 61 percent of blue state residents have jobs, compared with roughly 59 percent in red states, Brooks found. That cuts against recent historical patterns: From the 1990s through the mild recession of 2001, there was no gap at all.
Despite the persistence of regional inequality, some positive trends have emerged: More tech jobs are moving out of the tech hubs and spreading around the country. Software programming jobs have migrated to Dallas, Detroit, and Charlotte, among others, according to Brookings data.
But many of those tech jobs are lower- or mid-level positions, such as technical support and help desk jobs, rather than higher-paying, cutting-edge positions. Kolko notes that the most highly-skilled tech jobs — in such areas as machine learning, a form of artificial intelligence; computer vision; and database engineering — are even more concentrated in tech hubs than are tech jobs overall.
“There’s a spreading out of the tech economy, but it remains a different tech economy in the middle of the country than what you find in the Bay Area, Boston, New York and Austin,” Berube said.