We have much to celebrate this summer when millions of people will turn their attention to Northeast Ohio for the Republican National Convention. They will be greeted with a refurbished downtown Cleveland, a thriving “eds and meds” job center in University Circle, and inspiring examples of a tech-fueled economy generating new industry opportunities and high-paying jobs.
However, two recently released reports suggest that all that glitters isn’t gold, that our comeback is far from complete — and never will be until we better connect our legacy urban neighborhoods with the regional economy.
In late January, the Brookings Institution issued the latest iteration of its “Metro Monitor,” the box score for economic development junkies like me. In it, they compare how metropolitan economies have fared over one-, five- and 10-year time frames. A first reading of the data provides much encouragement that our long-term economic travails are at last turning the corner.
Usually in a recession, Northeast Ohio is the first to fall, the deepest in, and the one who never quite recovers. This has not been so in the latest business cycle.
The economic inclusion numbers suggest we have done well; our performance on metrics such as the change in relative poverty and median wage place us in the top 20 percent of metropolitan areas. But if you click through the data and look at economic outcomes by race, you will sober fast: We quickly fall to the bottom of the performance pile. As Brookings analyst Mark Muro has noted, “Too little growth is trickling down” to those who need it most.
This emerging tale of two economies came into even sharper focus in late February with the release of the Economic Innovation Group’s Distressed Communities Index, which examines economic well-being across seven dimensions at the neighborhood level. Shockingly, Cleveland came in dead last in terms of economic disparity among large cities, with Detroit just behind it.
While the citywide results generated some push back for the way data is rolled up, the ZIP code level findings suggest that we can't explain the results away.
So what’s going on? Are we, in fact, an economy on the rise? The “Comeback Kids” once more? Or are we the national poster child for the disappearance of the American Dream? The answer to both questions seems to be “yes.” Our regional economy is on the road to recovery, but we have entire neighborhoods disconnected and even cut off from the growth.
Does this matter? Yes, it does! Rising disparity is deleterious on multiple levels. For those with any compassion, rising intergenerational, place-dependent poverty is a moral outrage. Additionally, pockets of economic distress and disaffection are a recipe for social unrest.
At an even more fundamental economic level, economic disparity affects our ability to sustain our recovery. Economists around the globe have observed the negative correlation between economic disparity and sustained economic growth, and the Fund for Our Economic Future has confirmed this in our own “What Matters to Metros” research. Healthy economies are ones that provide access to opportunity for all citizens.
Amy Liu of Brookings called upon leaders to embrace inclusion in their economic strategies. She points to a recent survey of Harvard Business School alumni that found 71 percent of respondents felt their business had been harmed by rising inequality, growing poverty or limited economic mobility, and more than two-thirds of respondents believed addressing these issues mattered more than promoting economic growth.
Achieving economic growth while ensuring equitable access to opportunity through an economic development strategy begins with the simple understanding that neighborhoods — or even cities — don’t have economies, they have assets. Regions have economies. And the task is to connect those neighborhood assets to the regional economy.
The Opportunity Corridor is a wonderful case in point. Situated in some of the most economically downtrodden neighborhoods in the country, according to the Economic Innovation Group, it appears to be a devastated “economy” at first blush. Heck, it’s been called the Forgotten Triangle. Jobs have all but disappeared over the last 30 years. Only about half of working-age adults in the area immediately surrounding the Corridor are employed or looking for work; of those employed, 85 percent earn less than $40,000 a year, with 41 percent earning less than $15,000 annually.
However, that is not what many of us see in these neighborhoods. We see tremendous assets that, once connected to the regional economy, will lead to a powerful resurgence that will benefit all Northeast Ohio residents. The Opportunity Corridor has or will soon have unrivaled transportation access via interstate, rail and mass transit. It has large swaths of developable land in close proximity to downtown and University Circle professional, cultural and recreational amenities. It has a latent workforce within walking distance that is yearning for a hand up.
And all of this is occurring at a time when our region is experiencing a shortage of ready-to-go industrial space. We all must see this vision and muster the civic will to not only build the road, but to ensure it becomes the asset it can be and connects to the regional economy.
The Opportunity Corridor is but one example of addressing economic disparity in a way that benefits all of us. Similar opportunities exist in Akron, Canton, Lorain, Youngstown and elsewhere. Through conscious action, we can move past the tale of two economies into one integrated promise of growth and opportunity that benefits all our residents.