America’s Fastest Growing Cities Are Becoming More Diverse, But Face Rising Inequity

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Ninety-eight percent of growth in the hundred largest cities since 2000 was from growth in minority populations. A Brookings Institution analysis of the 2011- 2015 American Community Survey found that despite this increased diversity in cities, racial segregation has only moderately declined. Dominantly white neighborhoods in cities were 79 percent white in 2000 and 72 percent white in 2015, despite the overall white population in cities having dropped from 64 percent to 56 percent during the same period. For neighborhoods outside of large metropolitan areas, this reduction was even lower, from 84 percent to 80 percent.

While these are national trends, there remained a marked difference in diversity between large coastal metropolises and smaller, inland cities. Cities such as Las Vegas and Orlando became markedly more diverse due to increased migration as well, particularly in the American south and sunbelt. This phenomenon has made Houston the most diverse city in America, surpassing New York in 2010. As a nation, higher birth rates for racial minorities are projected to make the aggregate minority population a majority of the country by 2043.

The fastest growing urban employers are high-skill and high-wage, while the largest net growers of jobs are lower-skill and lower-wage. There is an emerging cleavage between the largest urban employers and the fastest growing urban employers. In the majority of cities, the fastest growing employment sectors are high-skill and high wage, but unfortunately these sectors are not likely to add the same number of aggregate jobs as much larger and lower- skilled sectors like retail, food service and office administration.

The majority of wage growth over the past quarter century has gone to high-wage workers, while low and middle-wage workers have seen their earnings grow by only 14.7 percent and 16.8 percent respectively. This serves to exacerbate existing inequalities in educational attainment and economic access. Even more starkly, earned income growth was negative for the bottom 10th, 20th and 50th percentile of the workforce, while it reached 16.9 percent for the 90th percentile. In addition, the average median wage for people of color in the United States is more than 22 percent lower than the wage for white workers, making the lowest percentiles dominantly communities of color. Relationships like these are exacerbated by differences in educational attainment, where African-American and Hispanic Americans are 15 percent less likely to hold a four-year degree.

The fastest growing metropolitan areas will be responsible for the bulk of job and population growth, but also rising inequality.

The fifteen fastest growing metropolitan areas have already been responsible for over half of new jobs and three-quarters of births from 2000 – 2014. This incredible growth has also created challenges, as much of the population growth is from immigrant communities who face barriers to equal economic access. In an Urban Institute white paper, Pendall and Turner used growth, job quality, cost of living, diversity, and disparities in economic opportunity as indicators with which to cluster the largest 99 metropolitan areas of the country. Some of the main barriers to economic access in America’s cities include language barriers, affordable child care and healthcare, and access to public transportation.

Urban economies will be more segregated, and health and personal services will be the fastest growing employers.

As our economy becomes more segregated, cities will be no exception. In many cases, this segregation will be more severe in urban markets where rising real estate prices have outpaced wage growth. While it is difficult to say what the economy of the future will look like, there are indicators that will become more prominent and pervasive by 2020. The hollowing out of mid-skill and mid-wage employment will continue, albeit variated across geographic regions. While some urban centers will attract younger populations of high-earners, others will attract older populations, often supported by a low and mid-wage service industry.

Cities that are experiencing the greatest demographic growth will continue to grow a mixed economy, likely proving to be the most resilient over time. While cities will experience greater segregation between them, they will also see inequality grow within them. Cities that put in place policies that encourage the growth of a middle class, equal access to education and infrastructure (including financial and digital), and a floor for those most vulnerable will be the cities that encourage a diverse population and economy.

This piece originally appeared in NLC’s 2017 report: The Future of Equity in Cities. Read the full report here

Nicole DuPuis small.jpgAbout the author: Nicole DuPuis is the Manager for Urban Innovation in the Center for City Solutions at the National League of Cities.