Jobs, jobs, jobs.
That’s what many states and metro areas desperately needed in the aftermath of the Great Recession. So our program launched the Metro Monitor in 2009 to track jobs, housing prices, and other indicators of post-recession recovery in the nation’s 100 largest metro areas.
Today the U.S. economy has more jobs than before the recession, as do most metro economies. Yet many workers and households are not better off.
It’s time to change how leaders benchmark progress and measure metro economic success.
Telling state and local leaders to move beyond job creation as the proxy for economic progress feels like moving the goal post. Of course, job growth matters. We need more jobs to match the size of the labor force. Tighter labor markets boost wages, eventually, for those at the bottom of the income ladder.
But the problem is that the relentless chase for jobs, absent broader goals to improve people’s economic well-being, can be costly. Local tax incentives to build a shopping center, for instance, can result in near-term job growth. But if that development occurs in a region where incomes aren’t growing, then that subsidy merely shifts consumer spending and associated jobs within the region, rather than creating net new (quality) jobs and lifting incomes.
It’s better for taxpayer dollars to be spent on strategic investments in public goods like research, training, and infrastructure that support innovative firms creating good-paying jobs. Only by boosting household incomes can regions stoke demand for local-serving industries like restaurants and retail, and create new jobs associated with them.
An increasing number of state and regional leaders understand the economic imperative to put their regions on a better long-term economic trajectory, even if job growth is not a guaranteed near-term outcome. They are adopting a new model of economic development to ensure their leading distinctive industries remain productive amid rising global competition and new technologies. They are working to improve their innovation ecosystem, boost trade, expand the supply of skilled labor, and modernize their technology and transportation infrastructure. And they are forging new alliances to better coordinate and sustain their efforts.
Our relaunched Metro Monitor can help these state and regional leaders keep their eye on the mix of metrics that matter. My colleagues Chad Shearer, John Ng, Alan Berube, and Alec Friedhoff have developed a three-part set of indicators—growth, prosperity, and inclusion (including by race)—that capture broader goals for economic success. Among other things, they find that economic growth alone, including rising numbers of jobs, does not necessarily yield more prosperous, inclusive communities.
We hope leaders use our new Metro Monitor to bring clarity and urgency to their efforts. We hope the Monitor informs the development of new regional metrics for success, as some metros are beginning to do. And while we know metro areas love peer rankings, we hope leaders will use this new Monitor to focus on their own growth trajectory.
Most state and regional leaders want to create communities that improve the quality of life for the people who live there, now and for generations to come. It’s time for our regional economic development metrics and strategies to match that ambition—not just more jobs, but better incomes and opportunities for all.