It isn’t enough just to have economic growth and prosperity; the bounty has to be shared widely.
That isn’t happening – just look at persistently high jobless and poverty rates in some struggling places. That helps explain why so many Americans are so anxious about their finances, even as the stock market soars and the economy overall continues its third longest expansion ever – 93 months from the Obama years into the Trump presidency.
In its latest study of economic development in metro areas, the Brookings Institution looked at all three measures – growth, prosperity and inclusion – for the 100 biggest. It found that while 63 metro areas had economic growth between 2010 and 2015, only 37 made progress on inclusion. Only 11 improved in all nine indicators used in the analysis, and they’re all big into knowledge-based industries.
Surprisingly perhaps, none of those are in California. San Jose did best: It ranks at the very top in prosperity (which measures the quality of growth), sixth in growth and No. 15 in inclusion. San Francisco does well in growth and prosperity, but ranks No. 48 in inclusion. While Bakersfield is in the middle of the pack for growth and prosperity, it ranks third in inclusion.
The Sacramento metro area doesn’t come out nearly as well across the board: No. 66 in growth, 46th in prosperity and No. 58 in inclusion.
Dive deeper into the numbers, and there are more warning signs. On measurements of growth, Sacramento is in the middle of the pack on increases in jobs and economic output, but it ranks No. 88 in jobs at new companies, with a 12 percent drop. On the indicators of prosperity, Sacramento is 17th in annual wage growth, but ranks No. 60 in improved standard of living. And on inclusion, Sacramento is above average in the jobless rate, but below in median wage and poverty.
It shows again that new Mayor Darrell Steinberg and top economic development officials have their work cut out. The city’s economic development director just resigned, so new City Manager Howard Chan is doing a national search for a replacement. Besides the new police chief, this may be the most important hire Chan makes.
Unless Sacramento gets its act together and pumps up inclusive growth, we won’t become the diverse and prosperous city we want.
By the numbers
The national rankings in measures of economic growth for selected metro areas in California:
Source: Brookings Institution