Friday, December 26, 2014

Philadelphia lags other metro areas in recovery

The Brookings Institution examined 150 metro areas around the world to see how they fared before, during and after the recession.

Philadelphia lags other metro areas in recovery

When we hear that the U.S. economy is expected to strengthen in 2011, as economists are now forecasting, the statistic they’re wielding is “gross domestic product.”

That’s the value of goods and services produced in a country each year.

But just as Philadelphia is a city of neighborhoods, so too is the United States a nation of metropolitan areas. Cars, vaccines, mutual funds, and social media websites are all dreamed up, designed, assembled, marketed, and distributed from some actual city or suburb. Thus, U.S. GDP is actually composed of lots of smaller gross metropolitan products.

Researchers of the Brookings Institution have been trying to tell us for the last 15 years that success in the global economy will come to those metro areas that are magnets for capital, both human and financial.

The Washington think tank recently released an overview of how 150 global metropolitan economies fared before, during, and after the global recession. Philadelphia was in the pool, and while I’m happy to report that we didn’t drown, we didn’t make the starting lineup either.

In fact, the only major metro area in the United States that Brookings found had escaped the recession and is enjoying the recovery is San Antonio, Texas. Philadelphia was solidly in the “mixed decline/recovery” category along with Pittsburgh, Baltimore, New York and 74 other metro areas.

Topping the Brookings list was Istanbul, where per-capita income rose 5.5 percent and employment increased by 7.3 percent from 2009 to 2010. Just behind was Shenzhen, China, with 5.9 percent increases in income and employment, and Lima, Peru, with increases of 5.6 percent in income and 5.7 percent in employment.

Why does it not surprise me that Philadelphia actually recorded its highest ranking during the recession? Perhaps that’s a reflection of the colossal economic air bag that is the area’s health-care and educational sector. The region was ranked at No. 119 prerecession, rose to No. 78 while the real estate bubble burst elsewhere, and has slumped back to No. 127 in the recovery time.

From 2009 to 2010, Philadelphia experienced a 1.5 percent increase in per-capita income, but a 2.1 percent decline in employment.

The point of all of this, according to Brookings senior fellow Alan Berube, is not to drive Americans to despair. Rather, it’s a call for us to recognize where the growth is occurring in the global economy and for U.S. metro economies to adapt to meet the needs of the growing middle class in China, Brazil, and India.

The recession smacked the United States full on. But Berube said the data show there were plenty of major metro areas outside the U.S. that “either didn’t feel it at all or received only a glancing blow.”

Envelope, Please

Joseph A. Frick, the president and chief executive officer of Independence Blue Cross who is retiring Wednesday, will receive the Greater Philadelphia Chamber of Commerce’s 2010 William Penn Award.

Handed out each year in April since 1949, the William Penn Award is the chamber’s top honor, given to an executive for his or her contributions to the region.

Charles Pizzi, president and CEO of Tasty Baking Co., won the award last year.

Mike Armstrong Inquirer Columnist
About this blog
Mike Armstrong blogs about Philadelphia corporations and business-related topics. Contact him at 215-854-2980. Reach Mike at marmstrong@phillynews.com.

Mike Armstrong Inquirer Columnist
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