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More than 52 million Americans live in
deeply-disadvantaged, “distressed” neighborhoods, report
Distressed areas saw declines in both jobs and business
establishments despite economic recovery.
Wealthy neighborhoods have dominated the recovery,
generating 52% of the country’s new jobs.
There’s a new interactive tool
online that helps Americans visualize just how deeply
economically divided the nation has become — and it’s not a
The country’s deep income and wealth inequalities, which
match levels not seen since before the Great Depression, have
been widely reported.
But the Distressed Communities Index, published by a
Washington-based non-profit called Economic Innovation Group
(EIG), adds some startling new detail and localized specificity
to the widening and persistent gap between the country’s rich and
poor, the worst of any “advanced” economy.
The US economy has, on paper, been recovering from the Great
Recession since the summer of 2009. Recently, growth has hovered
around 2% per year, and the unemployment rate has fallen to just
Still, much of the population has not felt the gains of this
rebound, which is among the
longest in modern history but also the weakest.
“It is fair to wonder whether a recovery that excludes tens of
millions of Americans and thousands of communities deserves to be
called a recovery at all,”
the EIG says in its Distressed Communities Index
Economic Innovation Group
“The consequences extend far beyond the individual communities
being left behind. The further we go down the path of
geographically exclusive growth, the more we limit our nation’s
economic potential as a whole — and the more fractured our
society risks becoming in the process.”
This finding is in line with a recent shift in thinking at major
institutions like the International Monetary Fund, which now
argues that too much inequality is
actively harmful to the long-run growth potential of
Here are some depressing findings from the EIG report, which
finds more than 52 million Americans are living in distressed zip
• Job growth in the average distressed zip code was negative from
2011 to 2015, trailing the average prosperous zip code by more
than 30 percentage points.
• Distressed zip codes were the only group in which the
number of both jobs and business establishments declined during
the national recovery.
• Most distressed zip codes contain fewer jobs and places
of business today than they did in 2000.
• Distressed zip codes contain 35% of the country’s
“brownfield” sites marked by “
the presence or
potential presence of a hazardous substance, pollutant, or
• 58% of adults in distressed zip codes have no education
beyond high school.
Meanwhile, on the right side of the tracks:
• 88% of prosperous zip codes experienced job growth from 2011 to
2015, and 85% saw rising numbers of business establishments.
• Prosperous zip codes have dominated the recovery,
generating 52% of the country’s new jobs and 57% of its net new
business establishments from 2011 to 2015.
• Adults with any level of postsecondary education are more
likely to live in a prosperous zip code than any other type of
• 45% of the country’s advanced degree holders live in
prosperous zip codes, more than in the bottom three quintiles of
zip codes combined
The richest one-fifth of US zip codes were the “unambiguous
drivers” of the recovery, the report found; 88% of them saw
job growth and 85% had rising numbers of business establishments
from 2011 to 2015.
“Outside of the upper echelon, however, growth rapidly becomes
less pervasive,” EIG adds. “Only three out of every four
comfortable zip codes saw job growth over the period, and the
number of business establishments rose in only two out of every
three zip codes in this second best-performing tier.”
For the poorest Americans, “stagnation and decline were the rule,
not the exception.”
Just two of five distressed zip codes saw any job growth over the
five years of recovery, and only about one in five saw the number
of business establishments rise.
More than half (55%) of distressed zip codes experienced net
declines in both jobs and business establishments over the
2011-2015 recovery period, compared to fewer than one quarter of
mid-tier zip codes and a mere 3% of prosperous zip codes.