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Prosperity in U.S. Metro Areas Inversely Linked to Population Growth Rates

January 7, 2011 • United States, Daily Email Recap

Many thanks to Al Bartlett for letting me know about this important study by his friend, Eben Fodor who wrote the book “Better, Not Bigger” in 1999. In that book he documented how urban population growth does not pay for itself. Now he has taken on a bigger task, and the results he cites are very impressive and convincing. Following is a summary by Eben Fodor with a link to the full report. At http://growthbusters.org/2010/12/cities-with-stable-population-outperform-fast-growing-cities/ you can see a short interview with Fodor and a summary by Dave Gardner of the report’s highlights.

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Dear Friends and Colleagues,

Most cities in the U.S. have operated on the assumption that growth is inherently beneficial and that more and faster growth will benefit local residents economically. Local growth is often cited as the cure for urban ailments, especially the need for local jobs. But where is the empirical evidence that growth is providing these benefits?

I have just completed a new study examining the relationship between growth and prosperity in US metro areas. The study found that those metro areas with the most growth fared the worst in terms of basic measures of economic well-being.

The study looked at the 100 largest US metro areas (representing 66% of the total US population) using the latest federal data for the 2000-09 period. The average annual population growth rate of each metro area was compared with unemployment rate, per capita income, and poverty rate using graphical and statistical analysis.

Some of the remarkable findings:
• Faster-growing areas did not have lower unemployment rates.
• Faster-growing areas tended to have lower per capita income than slower-growing areas. Per capita income in 2009 tended to decline almost $2500 for each 1% increase in growth rate.
• Residents of faster-growing areas had greater income declines during the recession.
• Faster-growing areas tended to have higher poverty rates.

The 25 slowest-growing and 25 fastest-growing areas were compared. The 25 slowest-growing metro areas outperformed the 25 fastest-growing in every category and averaged $8,455 more in per capita personal income in 2009. They also had lower unemployment and poverty rates.

Another remarkable finding is that stable metro areas (those with little or no growth) did relatively well. Statistically-speaking, residents of an area with no growth over the 9-year period tended to have 43% more income gain than an area growing at 3%/year. Undoubtedly this offers a ray of hope that stable, sustainable communities may be perfectly viable – even prosperous – within our current economic system.

Here is a link to the new study:
Relationship between Growth and Prosperity in 100 Largest U.S. Metropolitan Areas
http://www.fodorandassociates.com/Reports/Growth_&_Prosperity_in_US_MSAs.pdf

This independent research was funded by Fodor & Associates as a public service.

Please feel free to share this email and study link with others who may be interested.

Best wishes,
Eben

Eben Fodor
Fodor & Associates LLC
Eugene, Oregon
www.fodorandassociates.com


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