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Recovery: Few Cities Recoup Jobs

Blog Jan 19, 2012

Over 90 percent of the U.S. metropolitan regions have not succeeded in the Recovery of the jobs lost in the last recession that ended in 2009. This underlines the slow rate of recovery in urban areas.

Out of the 363 U.S. metro areas only 26 have witnessed employment come back to pre-recession highs. This is according to a report from IHS Global Insight and released by the U.S. Conference of Mayors. What’s more, it is anticipated that almost 80 areas will not experience a rebound for more than five years.

“It’s very clear that there is a great deal of economic malaise throughout the country,” Los Angeles Mayor Antonio Villaraigosa, a Democrat who is president of the mayors’ group, told reporters in Washington “Most of our cities will be struggling with their economies for another five years.”

The erratic rate of recovery has seen many cities struggling through two and a half years after the so-called end of the recession, which has reduced tax receipts and forced city officials to fire workers, terminate public-works projects and bump up fees in order to tackle deficits.

As stated in the report, the cities that are forecast to bounce back to pre-recession highs by the year-end are New Orleans, LA; Burlington, VT; Pittsburgh, PA; Madison, WI; and Dallas, TX. Those cities with the least likelihood of recovery are Reno, NV; Tallahassee, FL; and Santa Rosa, CA.

Last year, President Obama proposed $447 billion economic-stimulus plan, with funds aimed at preventing further job cuts by local governments This failed to win enough support in Congress, where officials are focused on curbing the nation’s out-of-control budget deficit, seen by many as a contributing cause of joblessness. With that in mind, Congress reduced a grant program for cities by $1 billion, which the mayors’ report estimates may have cost 35,000 possible jobs.

IHS said it anticipates that spending reductions at federal, state and local levels will continue to lower economic growth by half a percentage point in 2012.

The report does point to some regional improvement. Cities with economies tied to international trade, transportation and utilities will benefit this year, with those industries expected to create 563,000 jobs in 2012.

“The detrimental and costly effects of the Great Recession have been felt in all 363 metropolitan statistical areas that we measure,” according to the report. “The recovery is very uneven across U.S. regions.”

It is difficult at times to know where we stand when jobs reports come out. In an article dated January 6, 2012 the New York Times reported, “Employers in the United States added 200,000 jobs last month.” So, what does that mean?

If there were 208,000 jobs created a month (that’s the average monthly rate for the best year of job creation this decade, according to Brookings), it would take 11.5 years to reach the pre-recession employment levels. If 321,000 jobs were created each month (the average monthly rate for the best year of job creation in the 1990s), it would still take almost five years. That means that any number less than that translates into going backwards in job growth, or on this case job non-growth recovery.

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