Using the ACS to track the economic performance of U.S. inner cities 2017 ACS Data Users Conference May 11, 2017 Austin Nijhuis, Senior Research Analyst Initiative for a Competitive Inner (ICIC)
ICIC ICIC is a non-profit research and strategy organization and the leading authority on U.S. inner city economies and the businesses that thrive there. Founded in 1994 by Harvard Business School Professor Michael Porter, ICIC offers a market-based approach to inner city revitalization. 2
What is an inner city? ICIC defines an inner city as contiguous census tracts within cities that are economically distressed, based on the following criteria: Example: Washington, D.C. Inner city Rest of metro Source: State of the Inner Economies (SICE) Database; U.S. Census Bureau 2011 American Community Survey 5-Year Estimates; ICIC analysis Copyright 2017 ICIC 3
Role of inner cities on U.S. prosperity The 328 inner cities in the U.S. represent only 9% of the U.S. labor force, but have a much larger impact on the average prosperity of Americans 9% of U.S. labor force 16% of U.S. unemployment 22% of U.S. poverty 33% of U.S. minority poverty The poverty rate in inner cities is twice the national average: Average poverty rate in inner cities is 30% vs. 15% in the U.S. overall The unemployment rates is 1.5x the national average: The average unemployment rate is 13% vs. 8% in the U.S. overall Source: State of the Inner Economies (SICE) Database; 2015 American Community Survey 5-Year Estimates; ICIC analysis Copyright 2017 ICIC 4
Percentage Point Change in Unemployment Rate, 2000-2015 Increase in Unemployment Rate Reduction in Unemployment Rate Economic performance of inner city residents: Poverty and unemployment for the 100 largest cities (2000-2015) -10% -5% 0% -5% Laredo, TX Spokane, WA Kansas, MO Paradise, NV Fort Wayne, IN Glendale, AZ Madison, WI Seattle, WA Corpus Christi, TX Long Beach, CA New York, NY Los Angeles, CA Baton Rouge, LA Norfolk, VA Washington, DC San Diego, CA Riverside, CA -10% Indianapolis, IN Toledo, OH Henderson, NV Orlando, FL Detroit, MI -15% -20% -15% -10% -5% 0% -5% -10% Increase in Poverty Rate Percentage Point Change in Poverty Rate, 2000-2015 Reduction in Poverty Rate Note: In some inner cities, changes in poverty levels may be largely attributed to population migrations Source: State of the Inner Economies (SICE) Database; 2000 Decennial Census; 2015 American Community Survey 5-Year Estimates; ICIC analysis Copyright 2017 ICIC 5
Indexed Emp, 2003=100 Economic performance of inner cities: employment (2003-2014) During 2003-2014, inner cities lost significant jobs while the rest of the central city, MSA and USA gained jobs 110 Inner Employment vs. Other Geographies (2003-2014) 2003-2014 Net Job Growth CAGR Number 105 Inner -0.2% -335,600 100 Rest of Central 0.6% 2,147,000 Rest of MSA 0.3% 1,302,100 95 90 Rest of U.S. 0.1% 382,800 85 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Inner Rest of Central Rest of MSA Rest of USA Source: State of the Inner Economies (SICE) Database; U.S. Census Bureau County and ZIP Business Patterns 2003-2014; ICIC analysis Copyright 2017 ICIC 6
Understanding the big impact of small businesses on urban job creation: Evidence from five cities Key Research Questions: 1. How many jobs are associated with small businesses located in inner cities? Chicago, IL Detroit, MI 2. What impact would growing urban small businesses have on inner city unemployment? Los Angeles, CA Washington, D.C. 3. What strategies can support the growth of urban small businesses? Dallas, TX Inner city Copyright 2017 ICIC 7
Share of jobs created by small businesses Impact of small businesses in inner cities Urban small businesses (1 to 249 employees) rival the impact of large businesses in terms of creating employment opportunities: In 4 of 5 cities, small businesses create most of the jobs in the city and inner city 100% Share of jobs created by small businesses 90% 80% 70% 60% 50% 58% 70% 48% 53% 64% 74% 77% 62% 74% 40% 38% 30% 20% 10% 0% Inner Inner Inner Inner Inner Chicago, IL Dallas, TX Detroit, MI Los Angeles, CA Washtington, D.C. Source: Dun & Bradstreet Hoover s Database 2016; ICIC analysis Copyright 2017 ICIC 8
Inner Jobs/Labor Force Employment gap in inner cities Despite the impact of small businesses, an employment gap remains in inner cities 600,000 Inner Employment Inner Jobs Employment gap Total jobs in I.C. Inner Residents Unemployed Work in the I.C. 500,000 Work in the rest of the city Work outside the city 400,000 267,319 300,000 315,340 200,000 105,905 100,000 93,282 0 Jobs Labor Force Jobs Labor Force Jobs Labor Force Jobs Labor Force Jobs Labor Force Chicago, IL Dallas, TX Detroit, MI Los Angeles, CA Washigton, D.C. Source: Dun & Bradstreet Hoover s Database 2016; U.S. Census Bureau 2015 ACS 5-Year Estimates; U.S. Census Bureau OnTheMap 2014; ICIC analysis Copyright 2017 ICIC 9
Strategies for supporting urban small businesses growth ICIC s Playbook for Supporting Inner Small Business Growth Copyright 2017 ICIC 10
Using the ACS to track inner city economic performance The American Community Survey drives our understanding of the economic performance, business vitality and resident prosperity of inner cities: 1 Identify inner cities Identify economically distressed urban neighborhoods in 328 U.S. cities 2 3 Inner city analysis Researchdriven strategies Analyze and benchmark inner city economic performance using a variety of data sources Track resident demographics, employment, businesses Develop strategies to support the economic development and revitalization of U.S. inner cities Copyright 2017 ICIC 11
Austin Nijhuis Senior Research Analyst 617-238-3005 anijhuis@icic.org ICIC S MISSION IS TO DRIVE ECONOMIC PROSPERITY IN AMERICA S INNER CITIES THROUGH PRIVATE SECTOR INVESTMENT TO CREATE JOBS, INCOME, AND WEALTH FOR LOCAL RESIDENTS. WWW.ICIC.ORG