More metro economies struggling in 2013: report

One-third of US cities see a decline or stagnation in their economies

Shreveport-Bossier City, LA has had the worst economic growth in 2013 compared to 2012.
Greg Pearson/The Times/Shreveport-Bossier Convention and Tourist Bureau

More U.S. metropolitan areas are struggling in 2013 than last year, with one-third of the cities and their surrounding suburbs seeing a decline or stagnation in their economies, according to a report released Monday by the U.S. Conference of Mayors.

The report found that 119 cities are struggling this year compared to 73 in 2012. Shreveport-Bossier City in Louisiana saw the largest decline, with a 6.2 percent drop this year compared to 2012. 

Economist and author David Cay Johnston credits rapidly diminishing property taxes, which have put U.S. cities under tremendous stress, for the economic decline. "As we have deindustrialized America, the property tax revenues of many cities has shrunk," Johnston told Al Jazeera.

Johnston added that economic segregation is also a major factor for struggling urban areas. "There's been an increasing concentration of poverty and extreme poverty in cities because jobs in factories have been going away."

Deficit reduction policies over the past year may have also played a role, says Dean Baker, co-founder of the Center for Economic and Policy Research.

"The deficit reduction we have done in the last year has contributed to slowing the economy and is the main reason the economy is worse in 2013 than 2012," Baker told Al Jazeera. He added that the government should increase spending to boost the economy.

In October, the Treasury Department said the nation’s deficit for the 2013 budget year totaled $680.3 billion, down from $1.09 trillion in 2012. The deficit, the gap between the government’s tax revenue and its spending, narrowed for the budget year that ended on Sept. 30 because revenue rose while spending fell.

Cities with economic growth

Many more metropolitan areas experienced some economic growth in 2013, the report adds, but those gains were slim. Of the 244 areas where the economies expanded, 93 had growth of 1 percent or less, according to the report prepared for the mayors by IHS Global Insight Inc.

Texas recovered quickly from the 2007-09 recession. Midland, Texas, had the most robust growth this year at 7.3 percent, the report found. Midland was followed by the metropolitan area of Odessa, at 6.4 percent.

The nation’s largest cities, New York and Los Angeles, will see a rise in their economies by 2 percent and 2.3 percent respectively. Chicago’s economy will rise by 1.3 percent.

The report also looked at employment, given that nearly 90 percent of U.S. non-farm jobs are found in metropolitan areas. It expects that 290 areas saw some job growth, more than three times the 73 areas that will see flat or declining employment. Texas also will see some of the largest employment increases, according to the report. Houston, for example, will see employment growth of 3.6 percent, while employment in the Dallas area will likely increase by 3.4 percent.

Al Jazeera and wire services

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