Job Growth Focused on Largest Cities

Rural America has been adding jobs since 2013. But there are still fewer people working there than before the Great Recession. Through 2015, nearly all of America’s job recovery has been in the nation’s largest urban areas.

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National employment has been on the rise since 2010, but most U.S. counties still have fewer jobs today than they did when the Great Recession started in 2008.

Half of all metropolitan counties (580 out of 1,165) had fewer jobs in 2015 than they did in 2008. And a stunning 67 percent of nonmetropolitan counties (1,326 out of 1,969) had fewer jobs last year than they did before the recession.

All the job growth has been in metropolitan America. But a closer look at Bureau of Labor Statistics data shows that all the gains occurred in large metropolitan areas – ones that have at least 250,000 residents. And most of the growth occurred in metro areas with 1 million or more residents. These largest metro areas had 5.6 percent more jobs in 2015 than they did just before the recession.

At the other end of the county-size spectrum, the result is flipped. In nonmetropolitan counties where fewer than 20,000 residents lived in a city, there were about 5 percent fewer jobs last year than before the recession.

The urbanization of the U.S. economy is evident even when you look at the simple divisions of metropolitan (counties in a metro area with a core city of 50,000 or more), micropolitan (counties in a metro area with a core city of 10,000 to 49,999) and rural or “noncore” (counties with no city of 10,000 residents or more).

Here’s what those annual job-change numbers look like. Metro is above zero, but micro and rural aren’t.

Click on chart for larger version.

But the real story emerges when we sort the counties using a classification system called the rural urban continuum code, developed by the USDA Economic Research Service. This divides U.S. counties into nine categories, with 1 being the largest (a million residents or more) and 9 being the smallest (not more than 2,500 residents living in a city).

The top two categories are the only ones that are in positive territory for job growth since the recession. The rest (including the smallest metropolitan areas) still had fewer jobs. And the more rural the county, by and large, the greater the percentage of job loss since 2008.

The top two largest categories gained gained 4.5 million jobs since 2008.

Every other county category had fewer jobs in 2015 than in 2008.

You can see in the chart that counties higher on the 1-9 list do better than those lower on the list. The bigger the town in or near the county, the more jobs that county gained.

The economy is becoming more citified. Businesses are finding it increasingly valuable to locate in larger cities, where they have access to large labor pools, the latest technology, a wide array of suppliers and the knowledge that transfers from face-to-face meetings among people. Young workers have filled city centers, and employers have chased them, moving offices to the downtowns of the largest urban regions.

Will this trend last? There’s a great debate about what will happen, as millennials age and start families, and as technology makes it easier to live away from large cities.

Over the last decade, however, the figures show convincingly that economic growth is a big city affair.



Topics: Economy

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