Nation's Mayors Worry as Job Growth Moves Out of Cities

A new report from the United States Council of Mayors claims that only 26 of the country’s 363 metropolitan statistics areas (cities, in layman’s terms) have regained the jobs lost in the recession. Another 26 are expected to regain those jobs this year. The 80 markets that are worst off will not recover lost jobs for another five years. The news may be bad for cities, but for the balance of the U.S., the data is a good sign.

The assumption has been that job growth in the U.S. must come from large and medium-sized cities. That is not true now. America has begun to add jobs, albeit at a modest pace. While city employment growth has staggered, jobs have been added in some areas with few large cities. The last data from the Bureau of Labor Statistics shows that job growth was strong in Georgia, South Carolina and Tennessee. Among the states with the lowest unemployment were Iowa, Nebraska, South Dakota and Vermont. The urbanization of America may have started to reverse itself. That will permanently damage cities, but will permanently help areas that are suburban and semirural.

To make sense of the data, it is worth looking at which industries have added and will add jobs. Energy production has become a larger part of the economy. So has mining and agriculture. The demand for U.S. crops continues to rise. America is in the midst of becoming more independent. Wind farms are not located in cities, and shale oil production usually comes from remote areas.

Most economists expect that cities will have to continue to operate with fewer tax resources. That is not just true today. The Council of Mayors report shows it may be the case for some time into the future. Cities will have to reset their expectations. Whether it is good or bad, America’s urban areas will have to prepare for a period that looks nothing like the past.

Douglas A. McIntyre