This year’s Milken Institute report illustrates how some of the nation’s most innovative cities are better poised to recover from COVID-19.
ACROSS AMERICA —The coronavirus pandemic has affected the economic performance of U.S. cities in profoundly different ways. However, a new ranking suggests cities will bounce back more quickly if workers not only have job opportunities in high-tech and other innovative industries but also an affordable place to call home.
The Best-Performing Cities Index, now in its 22nd year, measures the economic vitality of 200 large and 201 small metropolitan areas. Compiled by the Milken Institute — a nonprofit, nonpartisan think tank — the primary goal for this year’s index is to provide insight into how well-prepared cities are to meet challenges and opportunities for growth post-pandemic.
The Institute’s findings reveal that the index’s usual top-performing coastal cities have been profoundly more affected than their inland neighbors, and likely will have a harder time recovering from a pandemic-induced recession.
Additionally, high housing costs in these cities have only exacerbated the economic effects of the pandemic-induced recession.
To compile this year’s index, researchers looked at a city’s one-year and five-year job growth, wage growth, and gross domestic product in high-tech and innovative industries such as information technology, software processing, and aerospace manufacturing.
While the index was initially created to define a “best-performing city” as a center of sustainable job creation, this year’s index pivoted to also gauge inclusivity. It did this by taking into account factors such as housing affordability and broadband access in each community.
“Both factors have been really significant in terms of attracting and offering job opportunities during the pandemic,” said Misael Galdamez, a senior policy analyst with the Milken Institute who co-authored this year’s report. “These are real issues both during and leading up to the pandemic. People aren’t viewing cities as viable options if they can’t afford to raise their family there.”
Also new this year, cities were grouped into five tiers, offering policymakers, business leaders and residents the ability to more easily compare a similar city’s economic performance to their own.
Among the cities hardest hit by the pandemic, according to this year’s index, are “superstar cities” that historically have ranked high on the index.
For example, California standout cities including San Jose and San Francisco fell out of the top five this year to place at No. 24 and No. 22, respectively. In last year’s rankings, San Francisco topped the list for best-performing large cities, and San Jose tied at No. 5.
“While these cities offer lots of high-pay, high-skill work, they also tend to have lots of low-pay, low-skill work,” Galdamez said, noting that low-skill, service industry jobs have been affected most by pandemic-related layoffs and closures.
The biggest challenges for these cities are “equity and access,” according to Galdamez, who said leaders should look for ways to not only add more middle-class job opportunities but also ensure people can afford to live and work there.
Meanwhile, large cities in the Mountain West and South are outperforming many areas on the coasts, mainly due to high levels of short-term job growth and more affordable housing options.
For instance, Salt Lake City moved up 21 spots to No. 4 this year, and Huntsville, Alabama, had one of the largest jumps on this year’s index — the city moved up 39 spots to round out the top 10 larger cities.
Here are the top 10 best-performing large cities of 2021, according to this year’s index:
1. Provo-Orem, Utah
2. Palm Bay-Melbourne-Titusville, Florida
3. Austin-Round Rock, Texas
4. Salt Lake City, Utah
5. Raleigh-Cary, North Carolina
6. Boise, Idaho
7. Phoenix-Mesa-Chandler, Arizona
8. Nashville-Davidson-Murfreesboro-Franklin, Tennessee
9. Ogden-Clearfield, Utah
10. Huntsville, Alabama
These are the top 10 best-performing smaller cities:
1. Idaho Falls, Idaho
2. Logan, Utah-Idaho
3. The Villages, Florida
4. St. George, Utah
5. Daphne-Fairhope-Foley, Alabama
6. Coeur d’Alene, Idaho
7. Sioux Falls, South Dakota
8. Sebastian-Vero Beach, Florida
9. Gainesville, Georgia
10. Charlottesville, Virginia
See the full 2021 Best-Performing Cities Index at MilkenInstitute.org.
Megan VerHelst | Patch.com