Fact Checked

Postrecession, majority of job growth has been restricted to America’s largest cities

A man and a woman work together on steps outside office buildingImage: A man and a woman work together on steps outside office building
Editorial Note: Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our third-party advertisers don’t review, approve or endorse our editorial content. It’s accurate to the best of our knowledge when posted.

The economic divide between urban and rural areas in the U.S. has grown at an alarming rate since the financial crisis, claims a new report from the Brookings Institution.

Thanks mostly to job innovation brought on by new technology, large and heavily populated cities began pulling away economically from less-populated cities around the 1980s, creating a “spatial divergence,” or economic divide.

Fast forward to today. It’s been about a decade since the financial crisis and unemployment rates are at historic lows. But dig a little deeper and you see that the majority of job growth (72%) has occurred almost exclusively in American cities with populations topping 1 million, according to the Brookings report released last week.

On the other hand, the report says that smaller cities have seen only a fraction of the postrecession employment surge. Cities with populations between 50,000 and 250,000 (smaller metro areas) make up less than 6% of American employment growth since 2010. “Micro” towns and rural areas have seen even less growth, with many areas populated by less than 50,000 at below prerecession employment levels.

What’s the solution to bridging the “spatial divergence” gap? The authors of the report propose a few strategies for leaders and policymakers, including …

  • Promoting policies that increase digital know-how in communities that are being “left behind”
  • Increasing access to capital for small businesses in lagging communities
  • Expanding internet access across the more rural and sprawling areas of the U.S.
  • Identifying the most-promising midsize areas and working to give them an economic boost in the hopes that they’ll raise up the smaller communities around them
  • Providing federal financial support to those who want to make long-distance moves or commute to areas with more economic opportunity

Whatever course of action U.S. policymakers take, the authors say, the solutions need to invest in both people and places to slow the widening gap.

“Inaction, after all, is no longer an option,” they say. “The costs of spatial divergence to American economic and political life are now too great to ignore.”

About the author: Maizie Simpson leads the Content Strategy team and Data Journalism program at Credit Karma. Her team is dedicated to finding and publishing the human story behind financial stats and trends. To see a collection of the… Read more.