Economic Recovery Boom Has Left Behind Poor Areas, Report Finds

NPR's Robert Siegel talks to John Lettieri, co-founder of the Economic Innovation Group, about a report on how the post-recession, recovery boom is leaving behind poor areas. As a result, the wealth and well-being gap is widening further.

ROBERT SIEGEL, HOST:

Here's a central question in the political debate this year. Have we recovered from the Great Recession, or is it still hard times? Well, according to a new reports released today by the economic innovation group, it depends on where you live - what ZIP code. The report looks at inequality through a spatial lens, and it shows that the recovery has left behind many poor areas. Joining us now is a John Lettieri, cofounder of the Economic Innovation Group and one of the lead authors of the report. Welcome to the program.

JOHN LETTIERI: Thank you.

SIEGEL: There are lots of studies of inequality. You look at something a little different - the geography of economic well-being and distress. What did you find?

LETTIERI: We found some really startling results. First and foremost, we're looking at the recovery years here. This dataset starts in 2010 - so after the recession is over. And what we find is that not only does the recovery not lift distressed communities, it actually bypasses them altogether. In the worst decile of the country in terms of ZIP code...

SIEGEL: The bottom percent.

LETTIERI: The bottom 10 percent - the recession continues at a pretty breakneck pace. You see double-digit loss in employment. You see significant loss in business establishments - again, double digits. This just does not mirror what's happening in the rest of the country. So those that were most vulnerable before the recession are worse off after those early years of the peak recovery.

SIEGEL: And you would say that 50 million Americans live in distressed ZIP codes. You've mentioned a couple of the measures of life there that are different. The number of people who've finished high school - very different from elsewhere in the country.

LETTIERI: Exponentially different. If you look at the topmost prosperous and the bottommost distressed, it really is like looking at two different countries. In the most-prosperous ZIP codes, you're unlikely to run into somebody who hasn't graduated from high school. You're unlikely to see a vacant home. Your're unlikely to run into somebody who lives below the poverty rate. All of those factors are inverted in the bottom decile, where you have the vast majority of adults out of work. You have establishments eroding very quickly.

SIEGEL: One in 7 houses vacant.

LETTIERI: One in 7 houses vacant. And during the years we looked at, 1 in 10 businesses closing down. So these really are poles apart. I guess on the brighter side, the most prosperous decile is also the most populous. So of any category, that's where the most people in America live. And that's something we find, generally, in the report, is that prosperity is more broadly found than distress.

SIEGEL: Yeah. The prosperous cities you find are typically newer cities that are outside old core cities. You write at one point that there is only one core city that ranks as a prosperous area in the United States of America. Just wait for five seconds to tell us so people can guess. They won't.

LETTIERI: It's Bismarck, N.D.

SIEGEL: Bismarck, N.D., is the only prosperous core city in U.S.

LETTIERI: That's right. When we look at prosperity in cities, they tend to be small cities. They tend to be on the outskirts of fast-growing metro areas. They tend to be on the outskirts of metro areas that experienced a harsh recession.

SIEGEL: What can the country use with this data that you've come up with?

LETTIERI: Well, where we start is really an important foundational point, which is, place truly does matter. Where you start has an enormous impact on where you end up in life. We know that better than ever before thanks to (unintelligible) and some other very interesting analysis we've seen in recent years.

SIEGEL: Where you start, meaning what neighborhood, what ZIP code you're from.

LETTIERI: What ZIP code - that's right. And so understanding more about the variant experiences of the post-Great Recession economy from geography to geography, from ZIP code to ZIP code, is important to understanding what kind of intervention, if any, you need from a policymaking standpoint. That really starts with understanding what the experiences are of these people on the ground in their neighborhood.

SIEGEL: John Lettieri, thanks a lot for talking with us.

LETTIERI: Thank you.

SIEGEL: John Lettieri is cofounder of the Economic Innovation Group and one of the lead authors of its report on the recovery gap. It's called "The Distressed Community Index."

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