With a More Than One Trillion Dollars Loss of Economic Output, Metro Economies Study Underscores Need for Direct Aid from Congress
Washington, D.C. – Today, the U.S. Conference Mayors (USCM) released a Metro Economies Report studying the impact of the COVID-19 pandemic on American cities. The report paints a dire picture for metro economies, with output shrinking by more than one trillion dollars, an average of more than $10,000 per household, and unemployment remaining elevated – above 10 percent in many places – for the remainder of the year. The pandemic and necessary response measures have stalled economies in cities big and small, triggering precipitous declines in tax revenues. The resulting budget shortfalls are forcing painful decisions in local governments, including layoffs, furloughs and cuts to important public services.
To mitigate these budget crises and help cities maintain employment and critical services, the USCM is urging Congress to provide direct aid to American cities in the next COVID-19 response legislation. With the release of the report, USCM President and Louisville Mayor Greg Fischer issued the following statement:
“This pandemic has laid bare the systemic inequity that has long existed in our economy, and it’s clear the economic fallout from this pandemic will be with us for some time. We must rebuild our economies in a way that creates greater opportunity for those who’ve been denied it, and we cannot do that when cities are forced to cut jobs and critical services. The stark numbers in this report will only worsen if we do not get this pandemic under control soon. We need strong cities to have a strong recovery, and that’s why it’s so important that Congress not leave American cities behind again.”
The study, sponsored by The United States Conference of Mayors and The Council on Metro Economies and the New American City and prepared by IHS Markit, includes economic growth and unemployment projections both nationwide and in 381 individual metro economies. The full study can be found here, and key takeaways include:
- The sum of real metro GMP will fall by 8.8% in 2020, equating to a $1.45 trillion drop in metro economic output, an average of $14,700 of reduced output per household.
- Losses in GMP will be greater than 10% in 88, or 23%, of all metros; 193 metros, 50.6% of the total, will suffer GMP losses exceeding 8%. And 92%, 352 metros, will see GMP decline by at least 5% for this year.
- For the full year 2020, the average unemployment rate will be above 10% in 161 metros, 42% of all. It will be above 8% in 75%, or 284 metros, and above 6% in 96%, or 366 of 381 metro areas.
- Among large metros, Detroit, New York, and Chicago will remain more than 10% below pre-pandemic job levels. Overall, employment in 24 metros will still be down at least 10% in 2021Q1, and 123 will be at least 5% depressed.