Brookings Institution: Fresno reflects unevenness of five-year recession recovery

Fresno experienced modest growth in jobs and average wages during five years of economic recovery through 2014. But a report by the Brookings Institution indicates that the effects of the recovery have tended to benefit people with higher incomes, and whites to a greater degree than people of color.

The Brookings Metro Monitor report, released last week by the Washington, D.C.-based think tank, examined factors of growth, prosperity and inclusion across the 100 largest metropolitan areas in the U.S. Researchers evaluated job growth, productivity, wages and poverty, and also charted the recovery’s effects across ethnic/racial lines.

Fresno’s overall results reflected what researchers found in cities nationwide: that while economic growth during the recovery was geographically widespread, that growth was uneven. Additionally, how that growth contributed to greater prosperity of residents also was uneven in different regions of the country.

Fresno and other metro areas in Central and Southern California, as well as Arizona, New Mexico and Florida, were hit hard by the housing bust and still are struggling to balance their economies, said Richard Shearer, a Brookings senior research analyst and co-author of the report.

“It’s harder for them to generate growth, and to grow their economies through good-paying sectors – professional services, manufacturing and information technology – that are driving robust growth in other parts of the country,” he said.

Between 2009 and 2014, Brookings reports that Fresno’s 5.5 percent growth in jobs ranked the city 55th among the 100 largest metro areas, and the collective value of all wages, salaries and benefits for all workers in the community grew by 6.6 percent (61st out of 100). But the gross metropolitan product – the collective value of goods and services produced in Fresno’s economy – rose by a paltry 1.6 percent, or 95th out of 100 cities.

But while the total payout of wages and salaries grew in Fresno, the area’s median wage – the midpoint where half of workers make more money and half make less – fell by 7.5 percent, a decline that ranked the city’s wage growth at 94th out of 100 cities. According to the U.S. Census Bureau, the median wage among all workers in the Fresno metro area was $26,894 in 2014.

“The median wage, the measure of incomes of workers in the middle class, was down considerably,” Shearer said. “Incomes were increasing on average, but they weren’t increasing for workers in the bottom half of Fresno’s income distribution. All of Fresno’s income gain in the course of the recovery likely accrued to workers in the top 50 pecent of the region’s income distribution.”

In recent years, income inequality has become part of a national economic and political conversation. But Shearer said it also needs to be considered as a local metric. “We’re trying to look at how growth is achieved in terms of rising prosperity and who benefits,” he said. “If the economy is growing and becoming more prosperous, is that growth reaching everyone?”

The Brookings data indicates sharp differences in how whites and nonwhites (Hispanic/Latino, black, Asians and other minorities) fared in the recovery. Median wages shrank among both groups, and slightly more so among whites than nonwhites. Still, the 2014 median wage of $18,858 for nonwhites in Fresno was slightly more than half what it was for whites, at $35,295 per year.

And relative poverty – a measure of the numbers of people earning less than half of the area’s median wage – also was considerably higher among nonwhites. About 20 percent of whites were below that benchmark, compared to 29 percent of nonwhites.

The disparity in prosperity points to what Brookings researchers hope will nudge leaders to understand the factors related to economic growth in a community, “and to understand the dynamics of growth, prosperity and inclusion so they can design smarter or more effective strategies,” Shearer said.

Fresno is unique among large U.S. metropolitan areas in that its economy is dominated by agriculture and related industries, Shearer added. “Agriculture doesn’t explain much of Fresno’s performance in the growth in jobs, but it could be a larger factor in terms of gross metropolitan product and productivity.”

This story was originally published February 1, 2016 at 4:01 PM with the headline "Brookings Institution: Fresno reflects unevenness of five-year recession recovery."