Metro Monitor 2018

Today’s economy appears to be booming, as judged by continued job growth, household income gains, and historically high stock prices. Yet underneath the headline numbers America’s progress remains uneven: economic divides are growing between the coasts and the heartland, technology and other sectors, and the rich and the poor. This uneven progress reflects the accelerating pace of economic change that people and places across the nation now confront. Leaders in our major cities and metropolitan areas, centers of economic disruption and opportunity, are looking for insights and strategies to adapt.

What the Metro Monitor measures

Components of the Inclusive Growth Index

Growth indicators measure change in the size of a metropolitan area economy and the economy’s level of entrepreneurial activity. Growth creates new opportunities for individuals and can help a metropolitan economy become more efficient. Entrepreneurship plays a critical role in growth, creating new jobs and new output; entrepreneurial activity can also indicate investors’ confidence in future growth and prosperity.1

Prosperity indicators capture changes in the average wealth and income produced by an economy. When a metropolitan area grows by increasing the productivity of its workers, through innovation or by upgrading workers’ skills, for example, the value of those workers’ labor rises. As the value of labor rises, so can wages. Increases in productivity and wages are what ultimately improve living standards for workers and families.

Inclusion indicators measure how the benefits of growth and prosperity in a metropolitan economy—specifically, changes in employment and income—are distributed among individuals. Inclusive growth enables more people to invest in their skills and to purchase more goods and services. Thus, inclusive growth can increase human capital and raise aggregate demand, boosting prosperity and growth.

Growth was widespread among large metropolitan areas.

Ninety-six (96) of the 100 largest metro areas added jobs from 2015 to 2016, 93 posted increases in GMP, and 85 saw an increase in the number of jobs at young firms less than five years old. Overall, 97 large metro areas posted positive changes on at least one of the Metro Monitor’s three growth measures, and 83 posted positive changes on all three measures. The metro areas that performed the best on growth include a few established and emerging high-tech economies, like Atlanta, Austin, the Bay Area, Boise, Nashville, the Research Triangle, Seattle, and metro areas along Utah’s Wasatch Front. Several large metro areas with strong housing markets, like those in Florida and Inland California, also performed strongly on growth. The slowest-growing metro areas include several older industrial cities in the Northeast and Midwest like Cleveland and those with specializations in government or defense spending (Hartford, Jackson, and Virginia Beach) or energy (Bakersfield, McAllen, Houston, Oklahoma City, and Tulsa).

Read more about growth amongst the largest 100 metro areas on page 11 »

Few large metropolitan areas posted consistent gains in prosperity.

Eighty-seven (87) of the 100 largest metro areas experienced an increased standard of living from 2015 to 2016, 79 posted increases in the average wage, and 36 saw productivity increase. Overall, 91 large metro areas posted positive changes on at least one of the Metro Monitor’s three prosperity measures, but only 31 posted positive changes on all three measures. Many of the established or emerging high-tech economies that did well on growth also performed well on prosperity, including Atlanta, the Bay Area, Cape Coral, Grand Rapids, Jacksonville, Seattle, and metro areas along Utah’s Wasatch Front. A number of older industrial cities and/or logistics hubs like Akron, Detroit, Pittsburgh, Stockton, Toledo, Worcester, and Youngstown also performed strongly on prosperity. Meanwhile, a diverse set of metro areas in New York state, Oklahoma, Eastern Pennsylvania, and Texas performed poorly on prosperity for a variety of reasons. Two emerging tech hubs, Boise and Nashville, are nearer the bottom of the list, suggesting that even as they add high-tech jobs they are also adding less-productive and lower-paying jobs.

Read more about prosperity amongst the largest 100 metro areas on page 15 »

Most large metropolitan areas posted modest improvements in inclusion.

Eighty-two (82) of the 100 largest metro areas saw the employment rate among working-age adults increase from 2015 to 2016, 73 posted increases in the median wage, and 55 experienced declines in the rate of relative earnings poverty. Overall, 93 large metro areas posted positive changes on at least one of the three of the Metro Monitor’s inclusion measures, but only 37 posted improvements on all three measures. Overall, the places that did well on inclusion include a few of the Sun Belt metro areas that also did well on growth—Lakeland, Cape Coral, Deltona, Stockton, San Diego, and Jacksonville. However, other Sun Belt places that posted lackluster growth and prosperity gains ranked highly on inclusion, including Little Rock and Knoxville. The list of top inclusion performers included some high-tech metro areas, but not nearly as many as did well on growth and prosperity—only San Francisco, Madison, Spokane, Ogden, and Boise. A smattering of places around the Midwest completed the list, including Indianapolis, Des Moines, Minneapolis, Cincinnati, and Detroit, but for the most part, these places performed modestly well on growth and prosperity.

Read more about inclusion amongst the largest 100 metro areas on page 20 »

Metro Monitor dashboard

Explore data for your metropolitan area

Truly inclusive economic growth and prosperity proved elusive for most large metropolitan areas in 2016.

Progress was widespread. On each of the nine core measures of the Inclusive Growth Index, except for productivity, more than half of the 100 largest metro areas notched positive change. However, despite this broad-based progress, only 11 metro areas achieved inclusive economic growth and prosperity by posting improvements across every measure: Cincinnati, Des Moines, Detroit, Greenville, Madison, Minneapolis-St. Paul, Portland, Providence, San Francisco, Spokane, and Washington, D.C. For the most part, these places saw modest but broad-based growth in 2016 driven by a broad array of sectors. They all achieved productivity growth above the large metro area average in 2016, but that growth would rank only 33rd fastest out of the last 39 years of U.S. history.2 These 11 places did tend to post stronger gains on overall inclusion measures, however. And all but Portland and Spokane made at least some progress on narrowing gaps in racial economic inclusion. Ultimately, out of the 100 largest metro areas, Cincinnati and Greenville emerge as the only two that not only made consistent progress in overall growth, prosperity, and inclusion, but also reduced disparities in racial inclusion by improving employment, wages, and poverty among both whites and people of color. Meanwhile, almost every large metro area made at least some progress within the Inclusive Growth Index in 2016. Only Bakersfield, a place hit hard by the energy price collapse, saw declines on each of the core measures under growth, prosperity, and inclusion.

To help inform their efforts, the annual Metro Monitor measures communities’ progress on inclusive economic growth and prosperity. The report’s Inclusive Growth Index charts the performance of the nation’s 100 largest metropolitan areas across economic indicators in three broad categories that define economic success: growth, prosperity, and inclusion. It finds considerable variation in how different metro areas fared in their progress toward inclusive economic growth and prosperity in 2016, the most recent year for which complete data are available.

Overview of findings

This year’s Metro Monitor reveals that many of the nation’s largest metro areas saw changes in the sources of their growth and prosperity in 2016. Growth was widespread and metro areas extended its benefits to more people. Yet the sectors that drove this progress played varying roles depending on the measure and metro area. Construction, hospitality, and health care sectors continued to contribute to growth but held back productivity. High-skilled sectors like professional services, finance, and information contributed to prosperity but, for the most part, not jobs. Meanwhile, sectors like manufacturing, government, and education were less reliable, holding back job growth in some places. These shifting sources of growth often undermined concerted gains in prosperity and contributed to widening disparities.

  • Growth was widespread among large metropolitan areas.
  • However, few large metropolitan areas posted consistent gains in prosperity.
  • Most large metropolitan areas posted at least modest improvements in economic inclusion.
  • Yet few metro areas reduced disparities between people of different racial and ethnic groups by making everyone better off.
  • Despite progress on several fronts, inclusive economic growth and prosperity proved elusive for most large metropolitan areas in 2016.

These findings suggest that underneath the nation’s headline growth, metro areas are confronting new challenges, requiring new solutions that create a more advanced economy that works for all.

Data visualization produced by Alec Friedhoff.