The COVID-19 pandemic disrupted a decade of economic expansion and inclusive growth in some of the largest U.S. metropolitan areas — those with more than 1 million people — according to a Brookings Institution report. Meanwhile, large metro areas — those with fewer than 1 million people but more than 500,000 — as a group performed better than very large and midsized metro areas on inclusive growth measures like wage gains and racial and economic inclusion.
Inclusive growth is a measure of how economic growth is shared across groups. To model inclusive growth, Brookings researchers looked at 12 indicators across four categories: growth (e.g., GDP growth), prosperity (e.g., average wages), overall inclusion (e.g., employment rate), and racial inclusion (e.g., earnings gap).
“We intentionally broadened [the scope of the report] beyond traditional economic development metrics like jobs and GDP,” said Joseph Parilla, director of applied research at Brookings Metro and co-author of the report. “The economy is complicated, and it’s good to measure more holistically how the economy is working for people,” he said. The report looked at the 192 metropolitan areas in the U.S. with at least 250,000 people. Based on the metro areas’ performance on those measures, the researchers categorized them as resilient, emergent, tested, or stagnant.
One major takeaway is that many metropolitan areas with more than 1 million people were “tested” by the pandemic, according to the report, with more than 40% of them scoring in the bottom half of inclusive growth measures after they experienced strong, relatively inclusive growth pre-pandemic. Some of the country’s largest economies, including New York City, Los Angeles, San Francisco and Atlanta, were among those categorized as tested.
Metropolitan areas that were relatively prosperous during the pandemic sometimes shared common characteristics, such as being in the South or West or serving as business or technology centers rather than as hubs of tourism or energy. In addition, smaller yet still sizable metropolitan areas—those with fewer than 1 million people but more than 500,000 — tended to outperform the largest metro areas in inclusive growth. Metropolitan areas with strong inclusive growth scores during the pandemic include Cleveland, Sacramento, and Dallas.
Because updated Census data was unavailable during the height of the pandemic, Parilla said “it was hard to understand what was happening” on a large scale to people and cities outside of obvious indicators like job loss. Now, he said, the picture of how the pandemic affected inclusive growth in cities is clearer for city leaders.
Plus, “the [inclusive growth] framework overall is useful in just helping city leaders try to define what economic success looks like,” Parilla said.