Superstar cities aren’t only ones getting richer

There has been a ton written over the past few months — some but far from all of it inspired by Amazon.com Inc.’s “second headquarters” search — about the diverging economic fortunes of America’s metropolitan areas. A lot of it has been very interesting and informative. Taken as a whole, though, it can be pretty confusing.
Are we, for example, supposed to be worrying about “The Growing Inequality Between America’s Superstar Cities, and the Rest,” as urban scholar Richard Florida wrote in CityLab last month, or cheering the fact that “Second-Tier Cities Boast First-Rate Job Figures,” as the Wall Street Journal’s Shayndi Raice reported.
One partial explanation for the warring narratives is that regional wealth disparities are continuing to grow, but the insane housing market conditions this has created in the richest metropolitan areas are driving many of their residents toward places where the cost of living is lower. I’m starting to think, though, that a better description of what’s going on may simply be that some metropolitan areas are doing well and some aren’t, and there isn’t always an easy shorthand for separating the winners from the losers.
Ben Casselman offered a nice illustration of this in the New York Times by describing the diverging fortunes of booming Nashville, Tennessee, and not-so-booming Birmingham, Alabama. The cities are less than 200 miles apart, and in 1980 their metropolitan-area populations were nearly identical. Now metro Nashville has 65% more people and 106% more economic
output than metro Birmingham.
Here’s another way of illustrating diverging metropolitan fortunes: I ranked 100 largest metropolitan areas, which together account for two-thirds of the US population, by change in real per capita GDP since 2001, and these are the top 15. The figures show some areas score well on just because they were bouncing back from experiences during the Great Recession.
The metro areas in the bottom 15 have a lot in common. All feature per capita incomes well below the national metro-area average of $53,617, and all but one are in the Sun Belt. Most of the top 15 have incomes above that threshold, but five are below it. They also hail from every
region of the country.
That’s not quite right, though. Among the cities in the latter list, some are experiencing rapid population growth while some are barely growing at all. Population growth is of course usually taken as a sign that a region is succeeding.
Rising per capita GDP seems like a reasonable one, and it happens to support the general narrative that “superstar cities” keep getting super-starrier — the metropolitan areas with highest incomes and the biggest populations saw faster per capita GDP growth than the rest.
Tulsa, Des Moines, Provo, Pittsburgh, San Antonio and Buffalo really don’t fit the label of superstar cities, and their inhabitants aren’t rich, either. But they are getting richer, which is a hopeful sign that maybe other less-than-glamorous metropolitan areas can learn to do the same.
—Bloomberg

Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”