2014’s Most & Least Recession-Recovered Cities

by Richie Bernardo

WH-Best-Badges--Recovery-150x150For many American cities, the Great Recession is nothing more than a distant shadow of a troubled economic past. The longest downturn since the Great Depression officially ended five years ago, and cities across the country have more than fully recovered. Some in fact have even surpassed their pre-recession economic levels, thanks to lucrative industries that either sprouted from the ground post-recession or kept cities afloat through the crisis.

And yet the effects of the recession still reverberate in many towns, falling deeper into debt and leaving millions of Americans wondering whether the crisis has indeed been over for a while. Since 2008, a total of 13 municipalities — among them Westfall Township, Pa., Prichard, Ala., Stockton, Calif., and even Detroit — have declared Chapter 9 bankruptcy, a rare occurrence.

Whenever a city is left behind in a recovery, collateral effects are bound to afflict already struggling economies. From a public standpoint, this could lead to further complications: Crime rises, education suffers, local administrations collapse. In the private sector, property values decline and businesses shut down. If and when that happens, skilled workers are forced to seek better opportunities in more thriving communities. And a town that had little hope remaining is completely crippled.

To assess the accomplishments of local economies and how much work remains to be done, WalletHub compared the 150 largest U.S. cities to identify those that have experienced the most and least growth since the recession. We used 18 essential metrics — from the inflow of college-educated workers and number of new businesses to unemployment rates and home price appreciation — to examine how each city has evolved economically in the past several years. Check out the Methodology section at the end of this study for a more detailed description of how we ranked each city.

Main Findings

 

Overall Rank City Employment and Earning Opportunities Rank Economic Environment Rank
1 Laredo, TX 33 1
2 Irving, TX 3 9
3 Fayetteville, NC 6 11
4 Denver, CO 1 16
5 Dallas, TX 59 2
6 Corpus Christi, TX 5 22
7 Minneapolis, MN 2 29
8 Lubbock, TX 16 18
9 Garland, TX 24 17
10 Raleigh, NC 87 4
11 Tulsa, OK 38 14
12 Lexington-Fayette, KY 10 31
13 Amarillo, TX 23 25
14 Aurora, CO 97 5
15 New Orleans, LA 65 7
16 Anchorage, AK 11 39
17 Brownsville, TX 70 3
18 Miami, FL 32 20
19 Houston, TX 36 19
20 San Francisco, CA 8 45
21 Pittsburgh, PA 26 30
22 Durham, NC 17 38
23 Bakersfield, CA 64 15
24 Lincoln, NE 27 36
25 Baton Rouge, LA 42 24
26 Grand Prairie, TX 115 6
27 Augusta, GA 9 59
28 Rochester, NY 78 12
29 St. Paul, MN 18 43
30 Fort Worth, TX 34 32
31 Oklahoma City, OK 6 65
32 Albuquerque, NM 96 8
33 Madison, WI 4 74
34 Tacoma, WA 21 48
35 San Jose, CA 12 64
36 Boston, MA 108 10
37 Seattle, WA 21 52
38 Washington, DC 47 35
39 Buffalo, NY 52 28
40 Wichita, KS 74 21
41 Columbus, GA 116 13
42 Jersey City, NJ 49 40
43 El Paso, TX 19 71
44 Sioux Falls, SD 14 76
45 Austin, TX 92 23
46 Arlington, TX 85 33
47 Nashville-Davidson, TN 30 68
48 Plano, TX 83 34
49 San Antonio, TX 45 62
50 New York, NY 55 50
51 Atlanta, GA 86 37
52 Omaha, NE 51 57
53 Santa Rosa, CA 31 77
54 Newport News, VA 29 78
55 Portland, OR 60 55
56 Little Rock, AR 74 51
57 Toledo, OH 71 54
58 Chula Vista, CA 95 42
59 Memphis, TN 90 46
60 Columbus, OH 52 67
61 Fremont, CA 36 83
62 Orlando, FL 130 26
63 St. Petersburg, FL 99 41
64 Yonkers, NY 74 58
65 Norfolk, VA 133 27
66 Pembroke Pines, FL 100 49
67 Shreveport, LA 48 81
68 Fort Lauderdale, FL 89 63
69 Grand Rapids, MI 24 98
70 Montgomery, AL 40 87
71 Colorado Springs, CO 63 72
72 Kansas City, MO 80 60
73 Chattanooga, TN 15 107
74 Honolulu, HI 102 47
75 Overland Park, KS 113 43
76 Philadelphia, PA 79 70
77 Chesapeake, VA 72 69
78 Birmingham, AL 42 90
79 Oxnard, CA 57 79
80 Garden Grove, CA 44 89
81 Cleveland, OH 74 75
82 Tampa, FL 103 61
83 Oakland, CA 13 115
84 Greensboro, NC 122 53
85 Worcester, MA 20 117
86 Baltimore, MD 28 110
87 Winston-Salem, NC 101 66
88 Louisville, KY 106 73
89 Knoxville, TN 80 95
90 Virginia Beach, VA 119 80
91 Chandler, AZ 88 96
92 Gilbert Town, AZ 73 99
93 Santa Ana, CA 66 104
94 Chicago, IL 50 114
95 Fort Wayne, IN 46 120
96 Scottsdale, AZ 39 124
97 Vancouver, WA 67 108
98 Charlotte, NC 126 84
99 Los Angeles, CA 98 100
100 Richmond, VA 103 92
101 Milwaukee, WI 111 97
102 St. Louis, MO 93 105
103 San Diego, CA 58 118
104 Sacramento, CA 108 102
105 Providence, RI 134 85
106 Hialeah, FL 146 56
107 Des Moines, IA 117 101
108 Cincinnati, OH 68 121
109 Jackson, MS 91 113
110 Akron, OH 68 122
111 Port St. Lucie, FL 35 138
112 Rancho Cucamonga, CA 130 93
113 Tallahassee, FL 103 111
114 Glendale, CA 60 126
115 Salt Lake City, UT 82 123
116 Irvine, CA 145 82
117 Indianapolis, IN 127 103
118 Ontario, CA 54 132
119 Moreno Valley, CA 55 133
120 Springfield, MO 40 144
121 Reno, NV 147 88
122 Las Vegas, NV 149 86
123 Peoria, AZ 135 116
124 Jacksonville, FL 128 119
125 Fresno, CA 138 109
126 Oceanside, CA 118 125
127 Santa Clarita, CA 140 106
128 Henderson, NV 148 91
129 Long Beach, CA 107 130
130 Spokane, WA 112 129
131 Mobile, AL 125 127
132 Fontana, CA 84 140
133 Huntsville, AL 144 94
134 Huntington Beach, CA 113 135
135 Mesa, AZ 94 145
136 Aurora, IL 121 137
137 Anaheim, CA 136 131
138 Phoenix, AZ 139 128
139 North Las Vegas, NV 150 112
140 Riverside, CA 122 139
141 Tempe, AZ 120 142
142 Glendale, AZ 129 141
143 Tucson, AZ 124 146
144 Cape Coral, FL 130 143
145 Detroit, MI 110 147
146 Modesto, CA 143 136
147 Newark, NJ 142 134
148 Boise City, ID 62 149
149 Stockton, CA 137 148
150 San Bernardino, CA 141 150

Best_Worst_Cities_Recession_Recovery_072414

Ask The Experts

Local economies still struggling to manage the downturn are in danger of many lasting effects such as losing their skilled workforce or filing for bankruptcy — if allowed by the state — as a last resort. But such cities and individuals in financial straits may be able to avoid extreme measures with some strategizing.

Below, we've expanded the discussion with insight from various experts in the fields of economics, political science, and public management and policy. They offer advice to local policymakers, businesses and the general population as to what they can focus on in both the short and long terms to achieve recovery. Click on the experts’ profiles to read their bios and responses to key questions. You also can click on the left and right arrows to view the comments in the order that the experts appear.

  1. How can local administrations stimulate speedy economic recovery in their cities?
  2. Although aimed at lifting a city’s economy, what is the worst decision that a local administration can make?
  3. Compared with economic incentives and stimulants, how important are other factors such as a city’s culture and entertainment industry to its economic recovery?
  4. When a city has been negatively impacted by an economic downturn, when should people consider a new place to live? In other words, what signs indicate a good time to relocate?
< >
  • Juan Carlos Suárez Serrato Assistant Professor of Economics, Duke University
  • Ernie Goss MacAllister Chair & Professor of Economics, Creighton University
  • Katherine G. Willoughby Professor of Public Management and Policy, Andrew Young School of Policy Studies, Georgia State University
  • Laura Reese Professor of Political Science, Michigan State University
  • Jayce L. Farmer Assistant Professor of Political Science, Texas State University
  • Chih Ming Tan Professor and Page Endowed Chair in Applied Economics, University of North Dakota
  • David T. Flynn Professor of Economics and Director, Bureau of Business & Economic Research, University of North Dakota

Juan Carlos Suárez Serrato

Assistant Professor of Economics, Duke University
Juan Carlos Suárez Serrato
How can local administrations stimulate speedy economic recovery in their cities?

Local administrators have a limited toolkit when confronting a national downturn such as the Great Recession and their actions in response to such a downturn are likely to have little impact. However, some cities are more resilient to recessions and this might be shaped by local administrators over the long run. When we look at cities like San Antonio, TX that weather the recession relatively well, we find a diversity in employment across industries like health care, higher education, military, tourism, as well as a bourgeoning high tech sector. These sectors, especially military and health care, tend to be more “recession-proof” and in some cases, such as higher-ed, they might even be counter-cyclical as laid-off workers seek to re-tool themselves for the job market. To the degree that local administrators can shape the industrial portfolio of a city, their actions shape how the city will respond to a recession.

Although aimed at lifting a city’s economy, what is the worst decision that a local administration can make?

Local administrators can have a great impact on the development of a city but there are problems that arise or may be exacerbated during a downturn that require state or federal action. When local administrators take unilateral actions to deal with these problems, their actions can be counterproductive. Dealing with inequality or with insufficient aggregate demand may be two such examples. For instance, while stimulus spending may increase the recovery nationally, it may not have a large effect at the local level and might leave a city with long-term financial problems. Similarly, while it may make sense to address inequality by taxing high income individuals at the national or state level, doing so at the very local level might lead to the flight of the rich towards cites with lower taxes, reduce local revenues as well as demand for services that employ non-rich individuals.

Compared with economic incentives and stimulants, how important are other factors such as a city’s culture and entertainment industry to its economic recovery?

One of the best metrics of a city’s success is the share of college graduates in the city. Over the last thirty years we have seen a diverging pattern in the location patterns of college graduates towards cities that are rich in amenities such as entertainment, museums, etc… To the extent that such amenities are complicit in attracting college graduates to a city, they may be encouraged by local administrators. However, amenities are not a silver bullet for economic development. A city’s success will largely depend on other aspects of economic development and subsidizing amenities to any given city may not alter the long-term development of a city, especially when these subsidies may represent a substantial financial burden.

When a city has been negatively impacted by an economic downturn, when should people consider a new place to live? In other words, what signs indicate a good time to relocate?

New research has shown that as workers relocate to cities that may not be as affected by a recession, these incoming workers might not be sharing in the city’s success in averting the recession. That is, there is a very small degree to which workers can insure their earnings by relocation to other cities. The reasons for this may lie in the fact that in bad times all cities have excess workers and those with a local network will be first in experiencing the benefits of a recovery. Unfortunately for the movers, their relocation might sever their professional networks and place them in a less competitive situation relative to previous residents. Nonetheless, when a recession has devastating consequences for the main industries or sources of employment in a given city, workers would be wise to consider relocating as large, irreversible adjustments often occur during recessions. For example, while manufacturing employment has been decreasing in many cities for a long period of time, large adjustments that presage future economies opportunities, such as large plant closings, tend to happen more often during recessions.

Ernie Goss

MacAllister Chair & Professor of Economics, Creighton University
Ernie Goss
How can local administrations stimulate speedy economic recovery in their cities?

“Focus on the fundamentals” should be the mantra for all local policymakers. During an economic downturn, most local economic metrics turn negative. These include higher unemployment, lower sales and sales tax receipts, slower growth in property tax collections. At the same time, the demands placed on local services grow. For example, higher crime resulting from climbing unemployment demands greater police surveillance. However, rather than cutting city services during the economic downturn, policymakers should spend reserves (that is what they are for) and issue bonds. Typically an economic downturn is an ideal time to borrow funds since interest rates are generally much lower. However, borrowing should only be done if the downturn is cyclical or chronic. It would be a mistake for local policymakers to allow a deterioration of local infrastructure. Normally, this only exacerbates the problem as individuals, families and businesses abandon the area for more desirous locations outside the city.

An economic downturn can also be an ideal time to re-negotiate contracts and pensions that were overly generous during the time of robust economic growth. Across the U.S., local political subdivisions have made economic promises to current and future retirees that they can never fulfill. An economic downturn is an ideal time to “size” these benefits to the long-run prospects of the city.

Although aimed at lifting a city’s economy, what is the worst decision that a local administration can make?

The worst mistakes are to slash spending and allow the city’s infrastructure to fall into disrepair. Also pursuing a quick fix policy such as providing overly generous incentives to a firm, film company or other organization to relocate to the city. “Quick fix” policies only work for politicians that are “moving on” to higher office only to leave the problems to those who follow.

Compared with economic incentives and stimulants, how important are other factors such as a city’s culture and entertainment industry to its economic recovery?

I think a “grow your own” approach works best for most cities. Getting into bidding “wars” with other locales for the recruitment of businesses is, in my judgment, a mistake with costly results. Local businesses not receiving the incentives resist and those receiving the incentives often relocate when the incentives dissipate. For example, providing economic incentives to movie and film companies is a complete “waste of money.” Detroit only enriches Hollywood with a few at the top experiencing the benefits.

“Growing your own” means: 1) the provision of venture capital to startups in your community. 2) The provision of high quality training and education to your citizens 3) re-examination of regulatory environment including zoning laws and regulations.

When a city has been negatively impacted by an economic downturn, when should people consider a new place to live? In other words, what signs indicate a good time to relocate?

Individuals, families and businesses should look at the long run outlook for a city. For example, several years ago it was advantageous for a mass exodus from Pittsburg. Today, Pittsburg is a viable, attractive place to live.

The long run outlook is affected by the location (cold, warm), demographics (age distribution), infrastructure and industrial base. The most important of these are:

1) The infrastructure -- strong schools, excellent transportation, and efficient delivery of services.

2) Industrial base. Are the industries forming the core jobs in the city forward looking? For example, Detroit is heavily dependent on an industry, automobiles, that has a poor economic outlook. On the other hand, Omaha is heavily on an industry, food, agriculture, and agriculture research, which has a very healthy outlook.

Katherine G. Willoughby

Professor of Public Management and Policy, Andrew Young School of Policy Studies, Georgia State University
Katherine G. Willoughby
How can local administrations stimulate speedy economic recovery in their cities?

Except for in cases of cataclysmic events like natural disasters or military conflicts, it usually takes time for a government to fall into financial distress. Therefore, it is rare to have a speedy economic recovery for a city that has reached this point. Coming out of fiscal distress requires (1) focused attention on current and future obligations and the funds to pay for them, (2) making (often) painful choices about expenditures and revenues, and (3) extreme discipline to carry out such decisions. Local government public officials, department heads, program staff, taxpayers and residents must be willing to face problems head on and objectively.

For elected officials, this means taking the heat for initiating discussions about possible new revenue sources and tax increases as well as spending cuts. That is, changing the fiscal trajectory of the government cannot rest solely on either raising revenues or cutting expenditures, but must consider both.

For public employees, this means exposure and assessment of program and service performance, including measurement of client loads, unit costs, personnel pay and benefits. For residents and taxpayers, helping to initiate economic recovery requires acceptance that the public services they receive cost money.

Taxpayers must consider, deliberate about and then follow through with their support for the mix of public services and programs that they indicate they want by virtue of their living and/or conducting business in the locality. Local administrations would do best to establish and maintain clear and open communication with residents, taxpayers and the media regarding the level of stress evidenced and the steps noted above that are necessary to move toward recovery.

A flagging economy often brings about the re-negotiation of contracts and pensions of government employees. Many local political subdivisions have made economic promises to current and future retirees in flush times that they have difficulty fulfilling in a downturn. These governments often look to make adjustments to pensions and benefits as a means of alleviating fiscal stress.

Although aimed at lifting a city’s economy, what is the worst decision that a local administration can make?

State and local governments in the United States compete for business by using various incentives to enhance economic development. Incentives such as special bonding, industrial development and tax allocation districts provide the means for incoming entities to avoid local taxes (for specified periods of time) in lieu of the development promised. Government acceptance of overambitious estimates of the benefits to be produced and/or underestimates of the costs associated with such economic development incentives packages can have a deleterious effect on local budgets that can last for years.

Also, many governments do not take the long view and in good economic times may over promise to their employees, residents and taxpayers. During an economic boom, governments might enhance employee pensions and other benefits, add new public programs, expand old ones, make tax cuts or engage some mix of these. Then, when the economy turns, these governments are in a real pickle—they must fulfill promises for expanded spending on a weaker tax base and with fewer revenues. Local administrations need to maintain a multi-year perspective concerning their budgets and consider the impacts to these budgets across an ever changing economy.

Compared with economic incentives and stimulants, how important are other factors such as a city’s culture and entertainment industry to its economic recovery?

Economic incentives are important for governments to peak interest, spark development and generate vibrant communities. But, incentives alone do not determine how easily or quickly a local government can recover from fiscal distress. For example, US state governments differ in the types of powers afforded to their local governments for raising revenues. In some states, local governments have strong abilities to raise revenues using different types of taxes, fees, charges and by issuing debt; in other states, such powers are greatly restricted. Also, states differ regarding local ability to file for bankruptcy as well as the amount of support the state will offer to a locality as it falls into financial distress and then attempts to recover. The level of public trust that residents and taxpayers have in their government to move transparently through steps toward recovery can influence the ability of the government to regain its financial foothold. Finally, timing can play a role in the economic recovery of a city. Notice, for example, that since declaring bankruptcy in July, 2013, Detroit has benefited from significant attention to make a comeback. The same energy and support may not be available to Flint, however, should it go down the same path. It is not surprising that the public and potential investors can become immune to cries for help in an environment saturated with governments in distress.

Laura Reese

Professor of Political Science, Michigan State University
Laura Reese
How can local administrations stimulate speedy economic recovery in their cities?

I actually don't think there is any such thing as a speedy recovery. In most cases (baring a natural disaster for example) the economic problems of cities have developed over the course of many years -- thus the recovery is going to take some time. If the problems are structural -- not enough jobs, a mismatch between jobs and skills, a mismatch between tax base and need -- it will take a good bit of time to change the basic economy of a city. Using Detroit as an example -- the city will get out of bankruptcy relatively easily. But this just means the debts have been restructured. The basic structural problems that caused the fiscal crisis are all still there and will take years to fix. And, "fix" entails a very different (smaller and more compact) city.

Although aimed at lifting a city’s economy, what is the worst decision that a local administration can make?

I am on record as not being a fan of economic development incentives -- particularly those directed at particular firms. Giving away your local tax base to try to attract or retain a firm doesn't make any sense in the long run. It gives away the money needed for the truly important things like schools and public safety with no guarantee of payoff for the city. Indeed, in most cases, the incentives just pay the firms (with tax dollars) to do what they would have done anyway.

Compared with economic incentives and stimulants, how important are other factors such as a city’s culture and entertainment industry to its economic recovery?

There are far more important things that contribute to economic recovery than incentives. Based on my research -- there is no relationship between economic development policies of any type and economic growth. What is associated with economic growth? Good local public schools, low crime rates, spending for parks and recreation and culture. This is not the same as saying cities should set up entertainment districts for tourists. It is saying that the most important thing local officials can do is avoid giving away tax dollars and invest in good basic local services that serve local residents and improve their quality of life. Particularly the school system -- paying attention to the needs of families is just as or more important than worrying about the creative class. You don't need to be a cool city -- you just need to be a solid, well-run one.

When a city has been negatively impacted by an economic downturn, when should people consider a new place to live? In other words, what signs indicate a good time to relocate?

Cities are not comodities -- they are places with histories and cultures and people develop ties to them. They are not disposable things that you just walk away from when things get bad. The folks loyal to Detroit -- because they grew up there or their parents are from there or new young people who want to contribute -- don't view that place as something they walk away from when things get bad. I guess I would like to see people's first reaction be an attempt to improve things rather than walk away. Obviously many people have left that city and the most critical "push" factors are probably property values, schools and safety (which are all tied together of course). So again, cities need to take care of their traditional services.

Jayce L. Farmer

Assistant Professor of Political Science, Texas State University
Jayce L. Farmer
How can local administrations stimulate speedy economic recovery in their cities?

One of the best things that local administrators can do to speed recovery is to focus on “quality” economic development. This means focusing policies and funding efforts towards attracting businesses that can bring stable and quality jobs to communities. Simply put, cities should focus on attracting businesses from industries (high-tech for example) that can provide sustainable salaries. Sustainable salaries will give employees the ability to spend money that would then go back to the local economy. Likewise, jobs from such industries can provide salaries high enough for employees to buy homes and invest in property, which can also stimulate local economic growth as well as local government revenues through property taxes.

Although aimed at lifting a city’s economy, what is the worst decision that a local administration can make?

One of the worst decisions that administrators can make is to invest in poorly planned tax increment finance (TIF) endeavors. Tax increment finance is when a city invests up front in property for a private developer, who will then come in and develop the property through building infrastructure or establishing a business on that property. The idea is that as the developer develops and uses the property, the value of the property rises from the initial investment, and the developer repays the city over time by paying annual property taxes on the increased property values. Such efforts can be extremely great for a city when implemented correctly. However, these deals come with very high risk, as businesses and developers, when not properly incentivized to follow through, can renege on such deals. Additionally, TIF efforts can go horribly wrong when cities enter into such deals without clear commitment from businesses. When this happens, the local government is stuck with an under used building or piece of property that now must be paid for and maintained, leaving nothing more than a burden for taxpayers.

Compared with economic incentives and stimulants, how important are other factors such as a city’s culture and entertainment industry to its economic recovery?

While economic incentives are extremely important to economic recovery, other aspects as mentioned above are just as or in some cases even more important. While businesses want to go where they can get the best deals in regards to tax incentives, some also consider the quality of life for their employees as a very important factor as well. According to a study conducted in 2003 by the Center for Urban and Regional Studies at the University of North Carolina – Chapel Hill, the quality of life is becoming an increasing important consideration in business location decisions. Businesses are seeking locations that attract and retain a well-educated work force. The Area Development Online cited Terence Spielman as stating that it was the quality of life, mixed with the educated workforce that made PayPal select Austin, Texas as its home location.

When a city has been negatively impacted by an economic downturn, when should people consider a new place to live? In other words, what signs indicate a good time to relocate?

Its all about jobs. People generally leave their city when jobs are no longer available. When cities can no longer sustain jobs, and it is not feasible to commute to a nearby area, people will tend to relocate in order to find work. This trend is not only a reality today, but if you think back to the earlier days of our country, settlers relocated from the east to the west in order to find better opportunities for prosperity. According to Forbes, the Austin-Round Rock-San Marcos metropolitan area is the fastest growing in the country with one of the best job markets. Although its not explicitly stated, in this situation one could easily make the connection between fast population growth and the vibrant job market.

Chih Ming Tan

Professor and Page Endowed Chair in Applied Economics, University of North Dakota
Chih Ming Tan
What can local administrations do in order to stimulate a speedy economic recovery of a city?

My sense is that, at the city level, the problems could be very specific to that city so that there may not be a one-size-fits-all solution available. The nature of the solutions for each city will therefore depend on the particularities of the problems faced by that city as well as whether the problems are assessed to be cyclical/transient in nature or structural/long-term. We also need to account for the preferences of the inhabitants of cities.

What are the worst decisions local administrations can make, that although aimed at the economic recovery of a city can backfire?

One set of solutions may be perfectly acceptable to the inhabitants of one city but be entirely intolerable to those of another city facing similar problems because of ideological and other differences. Finally, we should also be cognizant of the fact that policies enacted by city administrators potentially have distributional consequences. More broadly, they could affect some subpopulations of inhabitants very differently from others, and those most affected inhabitants are potentially those who will be most likely to organize for or against the proposed measures. Given that the interactions between administrators and inhabitants are long-running in nature, the level of trust and social capital embodied in these relationships also need to be protected. Otherwise, conflict over one set of problems could negatively color future interactions between all participants.

David T. Flynn

Professor of Economics and Director, Bureau of Business & Economic Research, University of North Dakota
David T. Flynn
What can local administrations do in order to stimulate a speedy economic recovery of a city?

This depends greatly on the size/scale of the city and the type of economic recovery needed. My general answer is that direct responses to the crisis are unlikely to yield cost effective outcomes. Making sure business conditions are as favorable as possible, and communicating this fact to the business community and others, would be one way to stimulate a speedy recovery. Depending on the tax situation in the city there may be some ability to make changes that would benefit recovery, though again, I think that is somewhat questionable. This has the added downside of potentially creating problems in the medium- to long-term fiscal situation for the sake of questionable short run gains.

What are the worst decisions local administrations can make, that although aimed at the economic recovery of a city can backfire?

Fiscal changes for short run gains that fail to take into account the medium- to long-term fiscal consequences.

Do you believe that just economic incentives can contribute to the economic recovery of a city or are other aspects equally important, like culture, entertainment, etc.?

Culture, entertainment, and other factors are important to the identity of a city - very similar to how they see themselves. This can be a constraint the city places on themselves. Is that a good thing? It depends. If the city feels a loss of identity or distinction there can be a greater loss or threat to economic recovery. If the city and the citizens accept the costs, such as a slower recovery, that may result from keeping culture, entertainment, or identity in mind, then it is not really a problem. The city level cost-benefit calculation should lead them in the appropriate direction.

When a city is affected by an economic downturn, when is the right time for people to start seeking a new place to live? Which are the signs that it's time to leave that city ?

Once a city is in a downturn, residents are already potentially behind the curve in terms of departure. Part of the issue clearly involves their ability to relocate. Do they have skills in demand elsewhere? Some signs I would look to include the fiscal position of the city over time. For example, are they failing to contribute to employee pensions? Are necessary infrastructure projects delayed due to funding issues? These are signs of potential tax increases in the future, though not a guarantee. What are businesses that generate jobs doing? Are large employers staying and making a big public show of it? Are they leaving? This would be a good sign of the labor conditions in the local area. I would also keep track of population figures and population dynamics. Are there enough births and in-migrants to replace deaths and departures? If so, a community can stay viable. If not, if population is leaving, or aging significantly, that can alter the viability of the community for certain types of businesses and create a chain of events to the detriment of the city and make a downturn into a systemic decline.

Methodology

To evaluate the progress of local cities in propelling their economic growth, WalletHub compared the 150 largest U.S. cities to identify those that have experienced the most and least improvement since the recession. Using 18 key metrics — from the inflow of college-educated workers and number of new businesses to unemployment rates and home price appreciation — we examined how each city has evolved economically in the past several years. By doing so, WalletHub can help consumers assess how their present financial situations might be affected by the economic health of their cities.

For this particular study, we chose each city according to the size of its population. Population, in this case, does not account for residents in the surrounding metropolitan areas. The metrics as well as the corresponding weights we used to construct our overall rankings are based on the most recently available data. The two categories under which the metrics are listed were used for organizational purposes only and did not factor in to our overall rankings.

Employment and Earning Opportunities

  • Unemployment Rate Decrease: 0.5
  • Inflow Increase of College-Educated Workers (%): 1
  • Ratio of Part-Time to Full-Time Jobs Decrease: 1
  • Median Household Income Increase: 1

Economic Environment

  • Median Home Price Appreciation: 1
  • Foreclosure Rate Decrease: 1
  • Poverty Rate Decrease: 1
  • Public Assistance Rate Decrease: 1
  • Population Growth Rate Increase: 0.5
  • Uninsured Rate Decrease: 1
  • Bankruptcy Rate Decrease: 0.25
  • Number of Businesses Growth: 0.5
  • Average Experian Vantage Credit Score Increase: 0.5
  • Consumer Non-Housing Debt Decrease: 2
  • Violent Crime Rate Decrease: 1
  • GDP Growth Rate: 0.5
  • Opportunity to Start a Business Ranking: 0.25
  • Municipality Bankruptcy: 2

Sources: Data used to create these rankings is courtesy of the U.S. Census Bureau, the U.S. Bureau of
Labor Statistics, the United States Courts, the U.S. Bureau of Economic Analysis, the Federal Bureau of
Investigation, Zillow Real Estate Research, Experian, PBS NewsHour and WalletHub Research.

Author
User
Richie Bernardo is a financial writer at WalletHub. He graduated with a Bachelor of Journalism and a minor in business from the University of Missouri-Columbia. Previously, Richie was a journalism…
814 Wallet Points
Are you using municipal level data or MSA? And what year is the data?

I'd like to see the data sets used for each metric.
Jul 29, 2014  •  Reply (3)  •  Flag
I agree, the data sets would be very helpful. I wish this study would cite it's sources.
Jul 29, 2014  •  Reply  •  Flag
Go do your own research if you are not satisfied with the data; it's FREE and you're not paying.
Aug 31, 2014  •  Reply  •  Flag
This isn't data. It's a list generated from mystery data sets with unclear methodology. But yes, it's free. So is the trash on the street.
Aug 31, 2014  •  Reply  •  Flag