ON-Lion Letter

In a slow, uneven economic recovery, some cities have managed not only to survive but even to thrive.  Their stories, along with those of the not-so-successful ones, are the subject a June report from the Manhattan Institute for Policy Research in New York City, America's Top Metros:  Who's Leading the Recovery, and Why, by Tom Gray and Robert Scardamalia.

Gray is a writer, editor, and communications consultant.  Scardamalia is president of RLS Demographics, a firm specializing in the use and analysis of economic and demographic data for public and private applications.

Using data since 2009 for the nation’s metropolitan statistical areas (MSAs), Gray and Scardamalia identify leaders and laggards as measured by growth in economic output (GDP), personal income, and jobs.  Among the 100 largest MSAs -- which together make up about two-thirds of the nation’s population -- they take a detailed look at the top 20 and bottom 20 economic performers.

For each of these metros, they examine a number of factors that may be spurring its growth or holding it back:  What are the dominant industries?  What types of occupations have grown the most (or the least) in income and job count?  Where are tax policies most and least friendly to business?  Which MSAs have the most college graduates?  Which have the most Fortune 500 companies?  Which depend most and least on government for jobs and income?

Their analysis turns up no simple formula for success, but does lead to some tentative conclusions about the conditions that help foster economic leadership in today’s economy.

Global centers of technology and energy, such as San Jose and Houston, had a fast start in the recovery and continued to prosper through 2013, they found.  MSAs with a manufacturing-based economy, such as Detroit, Cleveland, and Toledo, were fast out of the gate, but showed signs of slowing last year.

The Texas success story continues, they also found.  The Lone Star State’s four largest MSAs are in the top-performing 20, and none of its MSAs are in the bottom 20.  Other large states have mixed results.  California has three MSAs in the top 20, but four in the bottom 20.  Florida has no top-20 MSAs, but four in the bottom 20.  New York has no MSAs in either group.

And higher educational attainment, as measured by the percentage of college graduates, they found, was associated with greater economic success, though there were exceptions.

The top-performing MSA was Odessa, Tex.  The lowest-performing one was Gulfport-Biloxi-Pascagoula, Miss.  Among the 100 largest MSAs:  San Jose-Sunnyvale-Santa Clara, Calif., was top-performing; Las Vegas-Henderson-Paradise, Nev., was the lowest-performing; and Milwaukee-Waukesha-West Allis, Wis., was 85th.

The Lynde and Harry Bradley Foundation in Milwaukee substantially supports the Manhattan Institute.

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