Entrepreneurship is driving economic growth in Harrisburg, but data show that it isn’t being shared equally among all its residents.
African American and Asian residents in the Harrisburg-Carlisle metro area saw decreased annual wages from 2010-15, even as wages for whites and Hispanics increased, according to a recent report from the Washington, D.C.-based Brookings Institute. Poverty also rose during that time period for all demographic groups except Hispanics.
Brookings economists surveyed data from the nation’s 100 largest metro areas for its “2017 Metro Monitor,” a report aimed at shaping regional and metropolitan economies. The Harrisburg-Carlisle metro area achieved middling to above-average rankings on its job growth and prosperity, but fell far behind its peers on measures of inclusivity.
The variation of economic outcomes among demographic groups mirrors national trends, according to the report, which is available in full here.
“Despite improving economic conditions during the 2010 to 2015 period, most metro areas still face gaps between headline growth and bottom-line prosperity and inclusion,” the executive summary reads.
“The Metro Monitor” evaluates cities on three criteria: growth, prosperity and inclusivity. Though Harrisburg trailed other metro areas on growth indicators, ranking 56th nationally overall, it ranked 12th for its growth of jobs at young firms.
The report defined a “young firm” as a private-sector firm in business for five years or fewer. In the Harrisburg metro area, jobs at these companies increased by 17 percent between 2010 and 2015.
Harrisburg saw 3.8-percent job growth overall and a 5.8-percent increase in gross metropolitan product. Brookings says that Harrisburg is underperforming the nation, which had an almost 9 percent change in job growth from 2010-15.
While gains in prosperity were uneven across the nation, Harrisburg ranked in the top quarter of metro areas for its productivity and average annual wage growth.
Brookings found, however, that rising wealth had not spread equally among all members of the population.
Although annual average wages in Harrisburg increased by 6 percent, that growth was shared mostly by white and Hispanic residents. Hispanics saw the largest increase in annual earnings: almost 13 percent during the survey period. Whites saw a 1 percent change.
Black and Asian residents, meanwhile, saw their annual earnings fall by 8.3 percent and 3.2 percent, respectively.
As a result, Harrisburg ranked 97 out of 100 metro areas on the report’s metric of inclusivity.
Gerald Cross, director of the Pennsylvania Economy League, said that income inequality is particularly pernicious in a state like Pennsylvania, where aging tax codes place disproportionate strain on urban areas.
“Our local government system is old fashioned in that we assume that everyone has wealth and it’s equally distributed, but that isn’t true,” Cross said.
Since local governments rely on taxing property and income, Cross added, the growing prosperity among whites has benefitted suburban areas. Meanwhile, the tax bases in more diverse, urban areas have shrunk.
“Places that lose wealth and earning power lose revenue, which means they lose services or have a harder time financing them,” Cross said. “That will lead to reduced services or higher taxes, and often you are [increasing] taxes on citizens with a lower ability to pay them.”
One trend that united almost all of the demographic groups in Harrisburg was the rise in relative poverty, or the share of people earning less than half of the local median wage.
Relative poverty rates rose by 6.8 percent among whites, 5.3 percent among blacks and 4.1 percent among Asians. In the Hispanic community, however, it fell by almost 2 percent.