Last month, City Observatory released a new report—Surging City Center Job Growth—chronicling a widespread rebound in city center jobs. For the first time in decades, job growth in city centers around the country has surpassed the rate of job growth in peripheral areas.
In an article called “Fool for the City,” Jacob Anbinder of The Week responded to recent media reports about the return of city centers, commenting that the issue may have been over-hyped in the media. You might think that a publication that bills itself as “All you need to know about everything that matters” might be a little bit more reticent in accusing others of hyperbole. Just the same, let’s take a minute to address the points raised in this article, and allay Mr. Anbinder’s fears.
As we described in our report, what’s remarkable about this trend is how it runs counter to the decades-long pattern of job decentralization. In analyzing data reaching back to the 1940s, we showed the steady ebbing of the relative economic importance of city centers. The message here isn’t a new era of urban triumphalism, so much as it is the end of a long period of unabated decentralization.
As a reminder, here are the key data points from our report:
We were careful in our work to flag the importance of the industrial composition of employment change through the business cycle on the observed patterns of job losses and gains. There’s no question that cities benefited from the strength of centralized industries, like professional services and finance, relative to the weakness of more decentralized industries like manufacturing, construction, and distribution. (In addition, contrary to the implication of the article that city center results were driven by government employment, our data excluded public administration employment.) But even after controlling for these industry variations, we showed that city centers had recorded a significant gain in their competitive position vis-a-vis suburbs.
The Week points out that for the entire nine-year period under consideration, many city centers were still below their 2001 level of employment. There is no question that the earlier 2002-07 period was a continuation of the historical trend, and that nearly all cities were then losing share of total metro employment. The key point in our study is that during the last four years for which we have data, the trend is quite different. (It is worth noting that 2002-07 was the height of the housing bubble and the peak of ex-urban development and job decentralization.) It’s hardly remarkable that most city centers didn’t grow fast enough in the four years coinciding with a very weak national economy to offset the relative decline they endured in the previous five.
Our report was quite clear that this pattern of city center revival isn’t universal. In the 2002-07 period, seven of 41 metropolitan areas outperformed their peripheries; in the 2007-11 period, 21 outperformed their peripheries. (21 of 41 is not an overwhelming majority; it is, however, a much bigger group than the 7 cities that saw this pattern in the previous time period.) As in politics, all economic geography is local: some city centers continue to follow the historic pattern of having growth that lags well behind their expanding suburban peripheries. We noted that job decentralization is still the order of the day in places like sprawling Houston and Kansas City.
It’s not surprising to find that the nascent urban comeback is happening faster in some places than in others: centralized employment did well in New York and San Francisco in the earlier 2002-07 period, when nearly all other city centers were lagging well-behind their peripheries in job growth. More analysis is needed to discern what sets of factors—industry mix, local policies, population movement—are at work in each metropolitan area.
There’s undoubtedly a lot to be learned from a closer, city-by-city and industry-by-industry examination of the data. This is the reason we published our report, and also why we’ve made our data available for others to download and analyze. Moreover, the underlying source of data, the Census Bureau’s Local Employment and Housing Dynamics series, is a powerful, yet under-used source of insight into the economic processes at work in our nation’s cities. We hope others will mine this data to generate an even richer picture of the changing geography of urban employment.
As we stressed in our report, four years of data drawn from a particularly turbulent time in our economic history is hardly the final word. We’re eager to see more recent data—the 2012 to 2014 data should be released by the Census Bureau later this year. When they are, we’ll be better able to judge whether the changes we’ve recorded in the past few years are a cross-current or a true turning of the tide.