Wednesday, January 05, 2011

High growth city = poorer city?

I came across an intriguing new study, courtesy of the HoustonTomorrow website, which headlined it, "Fast metro growth =lower incomes: Study links poverty, growth." The study itself, "Relationship between Growth and Prosperity in 100 Largest U.S. Metropolitan Areas," by consulting firm Fodor & Associates, looked at the fastest-growing and slowest-growing U.S. metro areas 2000-2009, and looked at per capita income, unemployment rate, and poverty rate. It found that faster growth rates were associated with lower incomes, greater income declines, and higher poverty rates.

Charlotte-Gastonia-Concord and Raleigh-Cary were among the fastest-growing metros the study looked at – no surprise. The report's writers say it throws some cold water on the often-stated belief on the part of many elected and business officials that growing fast is an automatic route to prosperity.

One caveat: In a quick skim of the report I didn't see enough data to tell me whether it had taken into account the fact that many of the fastest-growing cities in the South and the West were poorer to start with, and the slower-growing cities in the North and Midwest were places with higher pay (manufacturing, unions, etc.) but less economic growth, hence less population growth. In other words, does the study show causality or just correlation? If any academics or others have time to pore through the report and offer an analysis, it would be welcome.


Anonymous said...


Back in 2006 I read an obscure yearly CMS document called the Equity Report. It is(was) from a committee that used its citizen sensibilities to look at the treatment of and by the school system. The period covered in this report was 2004-2005.

The report showed a net 4200 new students in the system. All but 87 were Free and Reduced Lunch eligible. Mind you this is net. That means no growth in the affluent CMS families. Whatever number on new white and black affluent families arrived,were offset by an equal number that either moved away or switched to private schools to . If you believe that CMS is a reflection of the total population then this should mean something to you.

It has been the same trend every year since. This is no secret to CMS, the business community or the Observer.

While I have no proof, my thoughts are that in the last two years the number of poverty families coming into Mecklenburg has risen more than in 2004-05 while the total affluent and affluent middle class has decreased.

Another increase has been from families with children having serious medical problems. This town has superb care centers, often at little cost to residents not because of generosity but for the inability to pay. Our community is a magnet for high-need low-income families. The results are that Charlotte is destined to be a city split by classes. Sort of negates whats been going on since Fred Alexander.

Bolyn McClung

aegreen said...

Your caveat seems to be on the right track. On page 14 of the study there is a table comparing the 25 slowest growing and 25 fastest growing top 100 MSAs. If you take out California, virtually all of the fastest growing are in the South and Southwest, and all of the slowest growing in the the North and Midwest. The relationship then looks to be more about geography than growth. A more academic study would test for this by controlling for region as an intervening variable, and ultimately report whether the original relationship is spurious.

Anonymous said...

High taxes in Charlotte has spurrred more growth in the low tax areas of Lancaster and York County South Carolina. I much prefer to live in a place that allows me to keep the fruits of my labor.

therestofthestory said...

Bolyn, you are pretty close ot correct. Tara has traced this data for a number of years now so you can "google" her columns and look at it yourself. The white population has remained close to the same since the 2000 or so. BOE has looked at this a couple of times but derail theselves when the K population is disapportionately a higher percentage but then rapidly falls off by the end of elementary school age.

S-townMike said...

Even if it is the case that the fastest growing cities were poorer to begin with, doesn't it follow that the high growth did nothing to lift impoverished and working class segments to a higher level of opportunity and prosperity as promised by elected and business officials?

Sunbelt city wealth may have simply shifted laterally with new growth and emerging chattering classes, but it never trickled down to the grassroots as predicted. It seems to me that regardless of how the data is interpreted, the need to check and balance growth with sustainability stands.

Andy said...

In response to your caveat, findings #2-5 (p16 of the report) suggest the rates of change in income since 2000 and during the period of the recession have been more favorable for slow-growing places than fast-growing ones. Of course, as a Michigander I can attest we appeared to be the sad exception to this trend this decade :(

The other findings are mostly spurious since as you correctly noted, the authors didn't bother controlling for initial income levels, which makes them look either lazy or ignorant.

Anonymous said...

Could it be that fast growth makes more jobs available, which allows more poor people get jobs, hence attracting more poor people who want to work?

Now that our growth has been flatlined, we'll become a richer city. The poorly skilled unemployed will slip away as their unemployment ends, leaving behind only the better off. Then, on average, our city will be richer!

That won't be of much comfort to all of our other unemployed barely hanging on...

Anonymous said...

This has to be the longest string of intelligent and well thought out replies to a column I've ever seen.