INC NEWS - Area faces wide gap in incomes of rich, poor (Herald-Sun)

[John Schelp]

Area faces wide gap in incomes of rich, poor
By Ray Gronberg, Herald-Sun, 29 June 2008

A Washington, D.C., think tank says the western Triangle is among the country's most increasingly productive urban economies, but also warns it's facing a wide gap in the incomes of its richest and poorest residents. 

The Brookings Institution found that the four-county region centered on Durham experienced the 11th-highest growth in productivity in the country from 2001 to 2005. 

Brookings researchers arrived at that figure by comparing the area's annual gross domestic product with the number of people living here. The Durham area's productivity grew at a rate of nearly 3.4 percent a year early this decade. 

Among North Carolina urban areas, its performance ranked behind only that of the six-county region around Charlotte, which ranked fifth overall and grew by almost 3.8 percent a year. 

The Durham area's performance was markedly better than that of the three counties that include Raleigh, which ranked 96th among the country's top 100 metro areas and saw their per-capita product grow by less than 1 percent a year. 

The Greensboro region ranked just behind Raleigh, coming in 97th. 

But the flip side, as Brookings analysts see it, is that the Durham area's poor aren't keeping up with those who are better off. The richest 10 percent of the workers here on average made 6.8 percent more money per hour in 2005 than the poorest 10 percent. 

That was the seventh-biggest such disparity in the country's 100 largest metro regions and the widest among North Carolina's. Raleigh's was the 22nd-widest. Its wealthiest residents made 6.2 percent more an hour in 2005 than its poorest. 

One of the analysts who spearheaded the Brookings study, Mike Muro, said the pattern Durham is seeing is common to so-called "creative class" economies laden with high-tech, high-skills jobs. 

"Creative economies employ a winner-take-all structure or a growing reward for education," Muro said. "This is by no means Durham's problem alone." 

Muro added that "only one or two" of the 100 metro regions Brookings discussed in its report earlier this month "actually saw their income disparities narrow." 

He speculated that those regions were able to hold onto more of their traditional manufacturing base and thus preserve job opportunities that aren't as heavily reliant on an advanced education. 

The Brookings study highlighted urban-area economic performance because the think tank's researchers see that as the core of the national economy. 

The 100 largest metro areas cover only 12 percent of the country's land but house 65 percent of its people. They generate 68 percent of the country's jobs and 75 percent of its gross domestic product, Brookings said. 

Durham's showing in the Brookings study is not solely attributable to the city of Durham. Far from it: When Brookings and federal statisticians say "Durham," they usually mean everything and everyone in Durham, Orange, Chatham and Person counties. 

Likewise, when they say "Raleigh," they mean Wake, Johnston and Franklin counties. 

That said, the Brookings team found that the Durham area outperformed the Raleigh area in most of the economic and environmental metrics it considered. 

The Durham area's gross domestic product, for example, clocked in at $93,389 per job in 2005, compared with the Raleigh area's $87,955 per job. 

About 40 percent of the Durham area's residents have at least a bachelor's degree, compared with the Raleigh area's 39.2 percent. 

The average resident of the western Triangle drives less and emits less carbon than their Raleigh-area counterpart. But in contrast to its anti-spawl reputation, the western Triangle used almost 2 acres more of rural land for every new unit of housing than did the Raleigh area. 

The comparisons where the Raleigh area had a clear advantage over the Durham area were in the social metrics Brookings considered. 

In addition to the findings about income disparity, Brookings found that the Durham area's share of middle-income families fell by 9 percentage points between 1970 and 2005. The Raleigh area's share dropped by 4.5 percent points. 

Durham-area residents were also somewhat less likely to have graduated from high school than Raleigh's. About 85.2 percent of Durham's residents made it through high school, versus 87.3 percent of Raleigh's. 

The overall lesson of the study, Muro said, is that very few urban areas in the country do well across the board. In fact, the only one that did in the Brookings study was Boise, Idaho, which among other things benefited from a heavy reliance on hydroelectric power and a diversified economy. 

The Brookings study is available at http://www.brookings.edu/reports/2008/06_metropolicy.aspx.