Most of America is deteriorating economically.
That’s the conclusion of a new study recently reported by Axios.com that has created a stir in cities and state capitals. It probably hasn’t made a dent in Washington, where they are too busy talking past each other and raking in big bucks for re-election to care.
Axios is on online news organization. They have some really good journalists and their coverage is usually pretty insightful. So what did Axios find?
Economic prosperity is concentrated in America’s elite ZIP Codes, but economic stability outside of those communities is rapidly deteriorating.
What does that mean? U.S. geographical economic inequality is growing, meaning your economic opportunity is more tied to your location than ever before. Which means that your location better have a plan to keep their economies viable.
A large portion of the country is being left behind by today’s economy, according to a county-by-county report released this week by the Economic Innovation Group, a non-profit research and advocacy organization.
Key findings:
New jobs are clustered in the economy’s best-off places, leaving one of every four new jobs for the bottom 60% of ZIP Codes.
Most of today’s distressed communities have seen zero net gains in employment and business establishment since 2000. In fact, more than half have seen net losses on both fronts.
Half of adults living in distressed ZIP Codes are attempting to find gainful employment in the modern economy armed with only a high school education at best.
The map: The fastest growing Western cities (such as Gilbert, Ariz., and Plano, Texas) and “tech hubs” (Seattle, San Francisco, Austin) dominate the list of the most prosperous cities in the country. Cities that were once industrial powerhouses in the Midwest and Northeast, like Cleveland and Newark, are now more likely to be on the distressed end of the spectrum.
The cycle: Fewer new companies are forming than ever before, which disproportionately hurts distressed communities. The new businesses that do get started are often located in thriving communities where educated workers are. So talented people are forced to leave places with little economic opportunity — even if they have personal and family reasons to stay — to move to those where there is opportunity.
So how do we rank?
Economic Distress Indicators for: Palm Beach County, FL
Population: 1,378,810
% in Distressed Zip Codes: Palm Beach County 4.7%
% in Prosperous Zip Codes: Palm Beach County 35.1%
No High School Diploma: Palm Beach County 12.2% U.S. 13.3%
Housing Vacancy Rate: Palm Beach 8.2% U.S. 8.3%
Adults Not Working: Palm Beach County 26.9% U.S. 28.2%
Poverty Rate: Palm Beach County 14.5% U.S. 15.5%
Distress Score: 14.3
Distress Rank: 446
Overall, Palm Beach County is rated “comfortable” with indicators meeting or exceeding other counties and the national average. I also looked at three zip codes in Delray Beach and found interesting stats.
In 33445, which includes a lot of Delray Beach west of 95 and 30,460 people, the distressed rating was 30.2, more than double the rate for Palm Beach County. In my zip code, 33444, home to 22,440, the distress rank was a dismal 59.5. The downtown/beach area zip code, 33483 had a distress rating of 21.6 and consists of 11,850 people.
Distress was measured using 7 metrics.
- No high school diploma: Percent of the population 25 years and older without a high school diploma or equivalent
- Housing vacancy rate: Percent of habitable housing that is unoccupied, excluding properties that are for seasonal, recreational, or occasional use
- Adults not working: Percent of the prime-age population (ages 25-64) not currently in work
- Poverty rate: Percent of the population living under the poverty line
- Median income ratio: A geography’s median income expressed as a percentage of its state’s median income
- Change in employment: Percent change in the number of jobs from 2011 to 2015
- Change in business establishments: Percent change in the number of business establishments from 2011 to 2015.
This blog has long championed the importance of economic development and the need to strengthen and diversify our economy.
The stakes are high.
The report also indicated that less distressed communities are healthier communities. The healthier the economy, the healthier the person: People in distressed communities die five years earlier, according to the research.
If we care about our long term financial sustainability and the prospects for our children, we need to figure out a plan to be competitive with other healthy regions.
It’s not about chasing Amazon (good luck with that one) or waving incentives at companies—it’s about leveraging our strengths, improving our schools, nurturing entrepreneurs (economic gardening) working with universities, increasing quality housing that is affordable and building an inclusive community open to ideas, innovation and creativity.
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