Prosperity Watch (Issue 59, No. 1)
March 1, 2016
Far too many local communities in North Carolina, and nationally, are being left behind by economic growth and a changing economy, according to new analysis by the Economic Innovation Group (EIG). Using U.S. Census data from 2010 to 2014, EIG calculates what it calls a Distressed Communities Index (DCI) using seven particular metrics: housing vacancy rates, the number of adults working, the poverty rate, median income, the number of people with high school degrees, the change in employment and the rate of business formation. Distress scores are calculated at the zip code level and ranked based on the seven selected metrics, with higher distress scores indicating greater economic distress.
The EIG report highlights that for families and individuals living in distressed zip codes, the years of the official U.S. economic recovery following the Great Recession have felt much more like an ongoing downturn. A community (defined as being at the zip code level) is considered “distressed” if its distress score falls in the highest 20 percent of zip codes in the state while those in the lowest 20 percent are considered “prosperous”.
North Carolina ranks 11th nationally for the share of its population living in distressed zip codes, with around one in four North Carolinians living in such communities. Families and individuals living in these communities are plagued by poverty, joblessness, and a deep ongoing recession, the EIG report notes. Counties in the eastern part of the state (which includes Bertie, Martin, and Edgecombe counties) and in the southern central part (which includes Scotland, Hoke, and Robeson counties) have deep concentrations of distressed communities. By contrast, the central part of the state (which includes Orange, Durham, and Wake counties) and the lower Piedmont (which includes Mecklenburg and Union counties) has a high concentration of “prosperous” communities.
The EIG analysis reinforces the reality of an unequal economic recovery in which the majority of jobs have gone to certain parts of the state – particularly to “prosperous” communities. Of the seven metrics used for the DCI, North Carolina fared the worst on the median income ratio – a measure of the ratio of a geography’s median income relative to the state’s median income.
The EIG report includes other signs of inequality based on the DCI analysis. For example, Greensboro (the largest city in Guilford County) ranks among the top 10 most spatially unequal cities among the 100 largest U.S. cities while Guilford County is among the 20 most unequal counties with populations over 500,000 people. This is an indication that economic prosperity is not broadly shared even in areas in which overall economic well-being for an area is relatively healthy. The entire EIG report can be viewed at this link.