Where are the Jobs?: Cities, Suburbs and the Competition for Employment

November 1, 1999


Declining crime statistics, falling unemployment rates, balanced municipal budgets, and a resurgence in downtown living have cities across the country claiming that they are in the midst of a renaissance. Indeed, the economic boom of the mid-1990s has helped most cities stem the tide of decline, but new date reveal that it has not enabled them to beat their suburbs in the competition for new jobs. This paper looks at data from 92 metropolitan regions to determine where job growth is happening, and reveals which cities are losing their share of metropolitan area jobs, and which cities are outpacing their suburbs in job growth.

Key Findings

An analysis of a new data set that covers private sector job growth in the cities and suburbs of 92 large metropolitan areas between 1993 and 1996 found that:

  • More than half (52) of the cities had an increase in jobs, but their growth rates trailed the growth rates of their suburbs.
  • One-quarter (23) of the central cities experienced employment losses while their suburbs enjoyed employment gains.
  • Nearly 20 percent (17) of the cities had positive employment growth rates that exceeded the growth rates in their suburbs.
  • Even though most of the central cities gained new jobs during this period, the vast majority of them- 75 central cities, or 82 percent- lost private sector employment market share to their suburbs.
  • The problem of decentralization, or cities’ loss of market share, is not con-fined to older industrial cities of the Northeast and Midwest. Cities in the South and West that are rapidly gaining jobs- Austin, Phoenix, Charlotte, Nashville- are losing out to their suburbs, which have even faster growth rates and are increasing their market share of jobs.
  • The cities that resisted decentralization and expanded their market share are not necessarily the ones deemed urban success stores. Unheralded cities like Wilmington, Jersey City, Little Rock, Greensboro, Wichita, along with familiar “comeback cities” like Boston and New York, gained jobs more rapidly than their suburbs from 1993 to 1996.