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Larger metro areas have recovered from recession quicker than others

 
San Francisco has benefited from the growth of nearby Silicon Valley. That metro area added 30,000 jobs in the past year.
San Francisco has benefited from the growth of nearby Silicon Valley. That metro area added 30,000 jobs in the past year.
Published Nov. 22, 2014

PALO ALTO, Calif. — Traffic these days is brutal on U.S. 101 between San Francisco and San Jose, choking the commute to Google, Facebook and hundreds of startups you've never heard of. This is the most frustrating gauge of just how hot Silicon Valley's economy is right now.

Out here it's easy to forget there was ever a Great Recession. The metro area that the 101 freeway bisects added 30,000 new jobs in the past year, a 3.5 percent increase from September 2013.

A similar story is playing out around the nation: Big metro areas are mostly booming after the recession, and everywhere else is still digging out.

As of this year's third quarter, according to a Brookings analysis of Moody's Analytics data, America's 100 largest metro areas were collectively 1.3 million jobs over their pre-recession peak. All the other parts of the country, combined, were still 300,000 jobs below peak. That's a 1.5 percent gain for the big metros and a 0.7 percent loss for everywhere else. The gap would be much wider if not for an oil- and gas-drilling bonanza that is lifting job growth in North Dakota and other largely rural areas.

Those diverging fortunes help explain why people in broad swaths of the country perceive that the recession, which ended officially in mid 2009, still hasn't loosened its grip on their lives.

"In an ideal world," said Joshua Lehner, an economist for the Oregon Office of Economic Analysis, "you'd have jobs for everyone that wanted them" — regardless of where they live.

It could be that this geographic jobs gap is a permanent feature in an economy increasingly driven by brainpower and innovation, an economy in which clustering smart people in relatively small areas appears to boost labor productivity. That's what the economists think at the Brookings Metropolitan Program.

Oddly enough, government budget cuts might be one driver of the disparity between big metro areas and everyone else. Smaller communities tend to have less diverse economies than major cities, Lehner said, and so when cuts force layoffs of teachers and civil servants, those smaller areas have fewer other jobs to cushion them. That's a factor in his state, Oregon, where Portland has gained back all its lost jobs, plus 2 percent, whereas the rest of the state is still 4 percent below its jobs peak.