By Dave Gatton
February 3, 2003

the Conference of Mayors and the Council for Investment in the New American City released its first U.S. Metro Economy Report on Employment, on January 22 at the 71st Winter meeting of the mayors in Washington, D.C. The report, unveiled by Detroit Mayor Kwame M. Kilpatrick, Chair of the Investment Council, gave little hope that metro areas would see improvement in unemployment levels for the coming year.

"Our employment report indicates that we had a precipitous and perilous drop in job creation within our U.S. metro areas," said Mayor Kilpatrick. "Job creation will be anemic in the next few years, and we will not return to our previous rate of performance unless we have a national economic recovery plan," he told over 300 mayors at the opening session of the conference.

According to the report, prepared by Global Insight, Inc, U.S. metro areas saw negative job growth in 2002, losing over 646,000 jobs. In total, 213 of the nation's 319 metro areas saw declines in employment in 2002. New York lost over 82,000 jobs; Chicago 56,000; Atlanta 51,000; and San Jose, 49,000, demonstrating that job losses in 2002 were remarkably broad based and not confined to one or two regions of the country.

On a percentage basis, cities that had the steepest job losses over the past 12 months were Decatur (-4.0 percent), Flint (-3.6 percent), and Boulder (-3.2 percent), followed by Albany, GA, Athens, Binghamton, Elmira, Gary, Saginaw, San Jose, Seattle, and Wichita, each losing more than 2.5 percent of employment last year.

In 2001, when the economy was in official recession, U.S. metros also experienced steep job declines, particularly in manufacturing and high tech sectors. Detroit lost 55,000 jobs, Cleveland 19,000, Chicago 16,000, Seattle 15,000 and San Jose 13,000.

In looking forward, the report predicts a continuing jobless recovery for most of 2003. One hundred eighty-one of the 319 metro areas are expected to record job gains of less than 1 percent, a rate of job growth so weak that little, if any, improvement in the overall unemployment rate will occur.

Using 2001 as a mid point, the economy's anemic job growth is dramatic. Between 2001 and 2004, the economy will produce over 3.3 million fewer jobs than the period 1998-2001.

The unemployment rate in the nation's top 20 metros will remain flat for most of the year, with job growth averaging .9 percent or less. Los Angeles, Boston, and Detroit will see only a .5 percent gain; Newark .3 percent and San Francisco will see no growth in jobs.

Seventeen of the top 20 metro areas will see declines in manufacturing jobs in 2003; 9 out of 20 will see declines in construction; and 8 out of 20 will see job declines in government. Only the services sector (1.7 percent) and the transportation/communications/utilities sector (1.1 percent) will experience job growth above 1 percent.

The largest 20 metro areas are projected to contribute over $4 trillion to gross domestic product in 2003, over 36 percent of nation's overall economy.

The employment report is a new installment of the Mayors' U.S. Metro Economy series. Annually the series calculates the gross metropolitan product of the nation's 319 metro areas—the only such report of its kind.

Through the metro economy series, mayors documented for the first time that the U.S. economy functioned as set of metro regional economies, not states. According to the 2002 report, U.S. metro economies contributed over 86 percent of GDP, 88 percent of labor income, and 84 percent of national employment. During the robust 1990s, 86 percent of economic growth was generated by metro areas, earning their new claim that they are the engines of the American economy.

In his speech, Kilpatrick told the mayors, "while legally, we may be creatures of our states, economically our states are creatures of us." The statement was greeted with loud applause by the nation's mayors.