Reno’s economy relies on gaming and tourism, two industries which have been hit extremely hard by the recession.
December 2007 is when the Great Recession officially began and it officially ended in July 2009. But that doesn’t mean the economy has returned to where it was before the steepest downturn since the Great Depression and may not for years. Employment is not expected to return to its pre-recession peak until 2014, according to a recent report by IHS Global Insight.
To be sure, parts of the U.S. are recovering. Experts expect the economy to grow an average of 3 percent in the second half of this year. Thirty metropolitan areas will have reached their pre-recession peaks by the end of 2011. More than half of the nation’s 363 metropolitan areas are expected to return to their employment peaks by 2014 or before. Others are not so lucky.
The IHS report lists 37 metropolitan areas which are not expected to return to peak employment until after 2021. These areas are facing a “Lost Decade.” Some may never fully recover, although it’s probably useless to try to predict what may happen a decade or more from today.
One trait shared by most of these troubled cities is that they were built on declining industries that will never regain their earlier glory days. Many of these metropolitan areas are part of the “Rust Belt,” an area covering portions of the Mid-Atlantic and Midwest that was once an international center for heavy manufacturing. Cities such as Canton and Youngstown, Ohio were once hubs of the steel industry. Detroit and Flint, of course, were at the heart of the American automobile industry. These areas were decimated by the recession and some have unemployment rates in the double digits. Unlike other parts of the country, they have not been able to replace the old manufacturers with new businesses. According to IHS, unemployment has dropped in many of these areas since the worst parts of the recession, but “the current surge in manufacturing payrolls is not anticipated to last, and by the latter part of the decade the sector is expected to be in secular decline again.”
Some cities are forced to address problems beyond manufacturing, yet in the end they face the same results. Atlantic City’s gaming industry has lost its previous strength due to increasing competition from neighboring states such as Pennsylvania which have legalized gaming in recent years. Hickory, North Carolina, was once a major center for furniture production. Many jobs there have since been sent overseas, causing textile mills to close down and workers to be laid-off.
The ten American cities discussed in this article were chosen for the large sizes of their workforces and the fact that they are not expected to have recoveries to their pre-recession employment rates until after 2021. They have lost the industries which once made them prosperous and they will probably never get them back.
10. Canton-Massillon, Ohio
Change in employment 2001-2011: -10.1 percent
Unemployment: 9.3 percent
Poverty level: 12.3 percent
Median income: $44,799
Like many of the cities on this list, Canton was once a powerful industrial city but has since come on hard times. Major employers, such as LTV Steel and The Hoover Company, have either closed down or moved away from the city. Between 2000 and 2010, the city lost just under 10 percent of its population. The city’s economy is now becoming more service-based, although it will be hard to replace the number of jobs which were once provided by the steel and iron industry.
9. Dayton, Ohio
Change in employment 2001-2011: -10.3 percent
Unemployment: 9 percent
Poverty level: 13.3 percent
Median income: $47,145
At the turn of the century, Dayton generated more patents per capita than any other U.S. city. Dayton was a major manufacturing center and was also home to a number of GM plants. Currently, things are not going as well. According to George Zeller, a Cleveland-based economic research analyst, in the Dayton Daily News, “Dayton is in the worst recession that it has ever seen since the Great Depression.” As manufacturing continues to decline in the area, health and education services seem to be the only hope for employment.
8. South Bend-Mishawaka, Indiana
Change in employment 2001-2011: -10.9 percent
Unemployment: 9.1 percent
Poverty level: 13.7 percent
Median income: $44,579
South Bend-Mishawaka was once a major industrial hub, known primarily for manufacturing automotive parts. Most employment in the area is now in education, health care, and small businesses. Unfortunately, these are among the sectors which have shed the most jobs in recent years. According to numbers from the Bureau of Labor Statistics, the private educational and health services sector lost 1,500 jobs between 2009 and 2010 — the most out of any industry. The sector to lose the second largest number of jobs was government, which includes public schools and hospitals.
7. Youngstown-Warren-Boardman, Ohio-Pennsylvania
Change in employment 2001-2011: -11 percent
Unemployment: 9.1 percent
Poverty level: 15.5 percent
Median income: $40,734
Youngstown, Ohio, is a former steel city and is the center of an area called “Steel Valley”, the largest part of which was Pittsburgh. The disappearance of the steel mills has left the city’s economy dependent on health care and education, notably Youngstown State University — the city’s largest employer. According to one local paper, the city has more than 4,500 vacant structures and a shrinking population.
24-7 Wall St.: Skyrocketing costs of child care: 1960 to today
6. Atlantic City-Hammonton, New Jersey
Change in employment 2001-2011: -11.5 percent
Population: 274,549 Unemployment: 12.5 percent
Poverty level: 10.6 percent
Median income: $54,934
Atlantic City’s tourism-driven economy has been hurt in two ways. First, the recession has caused revenues to nosedive at the city’s casinos, as people have less money to gamble with. Second, there is growing competition from neighboring states such as Pennsylvania, Delaware, Connecticut, and Maryland, which have legalized gaming in recent years. As a result, it is unlikely Atlantic City will see the traffic that it once did when the economy returns to pre-recession levels.
5. Toledo, Ohio
Change in employment 2001-2011: -12.1 percent
Unemployment: 9.4 percent
Poverty level: 15.4 percent
Median income: $45,657
Toledo is the last of four metropolitan areas within Ohio to be included on this list. Toledo is a major center for production of auto parts and is home to major GM and Chrysler plants. The auto industry was one of the industries hit worst by the recession, and from its peak Toledo lost about 40,500 jobs. Employment has gotten somewhat better over the last few months, yet the road to recovery is still quite bumpy for the auto industry. In April 2011, 3,400 jobs in the industry were lost nationally, according to the Bureau of Labor Statistics.
24-7 Wall St.: Ten signs the double-dip recession has begun
4. Hickory-Lenoir-Morganton, North Carolina
Change in employment 2001-2011: -13.6 percent
Unemployment: 11.7 percent
Poverty level: 14.4 percent
Median income: $40,181
Unemployment in Hickory, NC, soared from 2 percent to 16 percent during the recession, according to USA Today. The jobless rate has since decreased to 11.7 percent, although this is still significantly higher than the national average of 9.1 percent. The area’s economy is largely based on the production of furniture and fiber optics. Both industries have seen mass layoffs in recent years. According to an article in the Washington Post, “the region has lost more of its jobs to international competition than just about anywhere else in the nation.”
3. Detroit-Warren-Livonia, Michigan
Change in employment 2001-2011: -15.8 percent
Unemployment: 11.1 percent
Poverty level: 14.2 percent
Median income: $52,954
Detroit was once one of the country’s largest and most industrious cities. Since 2005, the Detroit-Warren-Livonia area experienced a loss of 323,400 jobs. The recession was particularly hard on the area. As it is located at the heart of the nation’s auto industry, The Motor City was devastated by the Chapter 11 filings of GM and Chrysler. Although lower now, unemployment almost reached 30 percent in late 2009.
2. Flint, Michigan
Change in employment 2001-2011: -15.8 percent
Unemployment: 10.8 percent
Poverty level: 17.3 percent
Median income: $44,376
Flint is another city which has struggled due to the decline of the U.S. auto industry. In this way, the city’s problems cannot be fully attributed to the recession — the U.S. was already losing market share to Japanese auto companies before 2007. In 1960, General Motors, which was started in Flint, employed 80,000 people there. Today, it employs fewer than 8,000. Home values have dropped 10 percent in the last 12 months, and the city has a vacancy rate of 14 percent.
1. Reno-Sparks, Nevada
Change in employment from peak: -16 percent
Unemployment: 11.7 percent
Poverty level: 11.7 percent
Median income: $55,578
Although Nevada was one of 24 states to see a decrease in unemployment this past May, unemployment increased in Reno. The city’s economy relies on gaming and tourism, two industries which have been hit extremely hard by the recession. Additionally, about “25 percent of the (city’s) workforce is employed in the fields of construction, manufacturing, transportation, communications, public utilities, and finance related services,” according to Reno’s website. These sectors cannot flourish without the development produced by gaming within the city. It will now take more than a decade for the 36,000 jobs lost in the metropolitan area during the recession to return to the area, according to IHS.
Photo credit: Get Away Vacation Ideas