COVID Deals Another Blow to Industrial Cities

At one point in time, industrial cities were the backbone of the American economy. 

After these metros suffered years of decline, COVID has now crippled them with even more unemployment.

Across Buffalo, Cincinnati, Cleveland, Detroit, Milwaukee, Pittsburgh, Rochester and St. Louis, the unemployment rate rose 9.1% from February to May 2020, according to a Brookings Institution analysis of US Bureau of Labor Statistics and Emsi data. From February to June 2020, the number of jobs in these cities declined by 9.6%. From June 2019 to June 2020, the number of job postings declined by a whopping 17.1%.

The pain wasn’t felt equally among all industrial cities, though. While St. Louis saw an 8.1% change in unemployment rate from February to May 2020, it suffered a 17.5% change in job postings between June 2019 and June 2020. Detroit saw a staggering 19.3% change in unemployment rate while it experienced an 11.7% change in employment postings between June 2019 and June 2020.  Both Milwaukee (25.1%) and Rochester (15.2%) saw dramatic declines in job postings between June 2019 and June 2020.

As the manufacturing sector has eroded over the past few decades, unemployment and a population exodus have plagued these cities.

Now, COVID has created an additional set of issues for industrial cities, Lavea Brachman, a former Brookings nonresident senior fellow and vice president of programs at the Ralph C. Wilson, Jr. Foundation, wrote in a recent blog. 

“Legacy cities also have fragile economies with long-standing structural weaknesses that expose them to more severe initial impacts and complicate their path to recovery,” she wrote.

But there is some good news. Many of these cities were in a better position before COVID than they were before the financial crisis. While the unemployment declined 1.4% between December 2007 and December 2019 across the U.S., many of these cities, including Cincinnati, Cleveland, Detroit, Milwaukee and St. Louis, saw more massive drops in joblessness, according to Brookings’ analysis of BLS data.

These cities also saw an influx of young adults moving back downtown. From 2010 to 2016, the number of 25- to 34-year-olds living within three miles of the central business district grew 32% nationally, according to City Observatory’s report, “Youth Movement: Accelerating America’s Urban Renaissance.” In Detroit, this number jumped 261% over the same timeframe. Pittsburgh, Milwaukee, Cleveland and Cincinnati all saw increases in young adults moving downtown that was greater than the national average.

“Legacy city downtowns are seeing a surge in condo construction and repopulation after decades of decline, with an uptick in 25- to 34-year-old college-educated residents,” Brachman wrote in the Brookings blog. “Meanwhile, public-private-philanthropic partnerships are making targeted, place-based investments in inner-city neighborhoods.”