President Trump last week wrote an OP-ED in the Washington Examiner:

Estimates predict the U.S. economy grew at an annualized rate of more than 3 percent in the fourth quarter of last year – just like it did in the two quarters before that. The economy has created more than two million new jobs, and the unemployment rate has fallen to its lowest rate in 17 years: 4.1 percent.

On the White House website:

The economy has come roaring back to life under President Trump. The stock market has hit record high after record high, helping more Americans build wealth and secure their futures. Through needed tax cuts and reform, the Administration will bring jobs back to our country. The President is helping U.S. workers by expanding apprenticeship programs, reforming job training programs, and bringing businesses and educators together to ensure high-quality classroom instruction and on-the-job training.

Despite the news media’s reluctance to report on the much-improved economy,  it’s there. It’s real. I’m posting before the State of the Union address. I’m sure the economy will be a major component of the president’s speech.

America needs the economic momentum to not only continue, but to grow and spread.

For areas all across the US to grow, succeed, and prosper, they must be innovative.

The Milwaukee 7 Framework for Economic Growth has stated: “Regions need to capitalize on innovation – the only long-term driver of overall growth.”

The Council on Competitiveness defines innovation as creating new markets and new value.

Management consultant Peter Drucker says “Innovation is the specific instrument of entrepreneurship, the act that endows resources with a new capacity to create wealth.”

Innovation leads to growth and prosperity as opposed to distress that is gripping far too many American communities.

In late 2017, using data from the US Census Bureau, the Economic Innovation Group compiled the Distressed Communities Index (DCI).

The report examined 99% of the US population, so it’s quite thorough. The index reveals a highly disturbing trend happening in America.

Here’s the glaring headline. America’s elite zip codes are home to a spectacular degree of growth and prosperity. Outside of those top communities, millions of Americans live where what little economic stability exists is quickly eroding.

The scope of the problem

In total, 52.3 million individuals live in economically distressed zip codes. That means one in six Americans, or 17 percent of the U.S. population.
Such communities can be found in every region of the country and in rural areas, suburbs, and city centers.

A quarter of the distressed population is under 18 years of age, meaning roughly 13 million American children are growing up in communities likely to have serious negative neighborhood effects on young people’s future earnings potential.

Nearly a quarter of adults in the average distressed community lack even a high school diploma.

Roughly one in seven homes stands vacant.

The following is startling. Most of today’s distressed zip codes have no gains in employment or business establishments to show for the first 15 years of this century. A full two-thirds of distressed zip codes contained fewer jobs in 2015 than they did in 2000, while roughly 72 percent saw more businesses close than open over that same time period.

Virtually all of the net new jobs created during the economic recovery—99 percent of them—went to workers with at least some college education. The pool of college-educated workers eligible to fill such jobs is 5.5 times larger in prosperous zip codes than in distressed ones.

Residents of the average distressed county die nearly five years sooner than their neighbors in prosperous counties.

Geograpy

Where is the distress?

In the Northeast, more than two-thirds of the population living in distressed zip codes reside in very high density neighborhoods. Distress in the Northeast is a predominantly urban phenomenon.

In the South, by contrast, nearly 60 percent of the distressed population resides in low density, mainly rural zip codes.

All types of distressed communities can be found in all regions—evidenced most clearly in the Midwest, where the distressed population is relatively evenly distributed across neighborhood types.

There are several prototypes of distressed communities in the United States: Entrenched inner city poverty in the Northeast and Midwest, deeply-rooted intergenerational distress in the Deep South, and grinding economic and social isolation on Native American reservations in the West.

Prosperity is predominately suburban throughout the United States. Larger cities, with a broader mix of neighborhoods, income levels, and demographic fall towards the mid-tier and comfortable categories.

Smaller cities with industrial legacies that typically lack the economic diversification of their larger counterparts tend to be the worst off.

Both large and small cities with long industrial legacies are most likely to be distressed.

Seven of the 10 most distressed large cities in the country are major urban cores in the Northeast or Midwest. The DCI found that Milwaukee is one of the ten most distressed of the country’s 100 largest cities.

Economic well-being runs far higher in large, populous counties than it does in small, mainly rural ones.

Like the zip code level, far more people live in prosperous counties.

Fully half of the nation’s 135 counties with over 500,000 people are considered prosperous. Small counties are not only less likely to be prosperous than their larger counterparts, but they are also much more likely to be distressed.

Counties with fewer than 100,000 people are 11 times more likely to be economically distressed than counties with more than 100,000 people. And distressed counties are almost exclusively small ones.

The urban-rural prosperity gap would have been much larger were it not for the oil and gas boom that lifted economic well-being across large tracts of the interior of the country, specifically from North Dakota to Texas. Keep in mind, populous counties often do not register as particularly distressed because they contain a broad mix of neighborhoods.

The DCI concludes that the further we go down the path of geographically exclusive growth, the more we limit our nation’s economic potential as a whole—and the more fractured our society risks becoming.