Your Zip Code Can Impact Your Job Opportunities

The Distressed Communities Index (DCI) combines seven complementary metrics into a broad-based assessment of community economic well-being in the United States.

-Adults without a high school diploma
-Poverty rate
-Prime-age adults not in work
-Housing vacancy rate
-Median Income Ratio
-Change in employment
-Change in Establishments

From 2011 to 2015, Census Bureau data has been the source to determine the number of seats each state has in the U.S. House of Representatives and the allocation of federal funding for education programs in states and communities.  The DCI covers over 26,000 zip codes and 99.9 percent of the U.S. population (244 million Americans over the age of 16) as well as cities, counties and congressional districts, enabling Americans to understand how their local well-being stacks up at every scale of life. The DCI groups places evenly into five different tiers based on their performance on the index: Prosperous, comfortable, mid-tier, at risk, and distressed.

The DCI a customized dataset examining economic distress was created by the Economic Innovation Group (EIG) that came together because members felt the recovery from the Great Recession was not as strong as it should be.  The EIG’s goal is to foster broad-based economic growth and revitalization through new public policy solutions.  EIG brings entrepreneurs, policy experts and investors to the table to generate new solutions, and then works alongside policymakers to identify opportunities for bipartisan cooperation, build coalitions, engage private sector allies, and turn good ideas into successful legislation.

The 2017 DCI that EIG created found that 52.3 million Americans live in economically distressed communities.  This means that one-fifth of zip codes scored low on the DCI which represents one in six Americans, or 17% of the U.S. population.  However, 84.8 million Americans or 27% of the country’s population live in prosperous communities.

What does this mean for America's job opportunities?
It means in America's elite zip codes the economy is growing and job opportunities are available. Since 2011-2015, 57% of the national rise in business establishments and 52% of employment growth were in prosperous areas.  This means that jobs are going the most prosperous cities in the country.  The new businesses that are forming are often open in thriving communities where educated workers live.  These new job opportunities are almost exclusively going to people with education beyond high school thriving.  In fact, the fastest growing zip codes are in the western cities (such as Gilbert, Ariz., and Plano, Texas) and "tech hubs" (Seattle, San Francisco, Austin) which dominate the list with growing economies.

On the other side, the economic stability of the distressed communities is rapidly deteriorating.  Therefore, your economic opportunity is more tied to your location.  New jobs are available in the economy's best-off places forcing talented people to leave places with little economic opportunity, even if they have personal and family reasons to stay, and move to communities where there is opportunity.

A large portion of the country is being left behind by today's economy, according to the research only one of every four new jobs for the bottom 60% of zip codes.  Cities that were once industrial powerhouses in the Midwest and Northeast are now more likely to be on the distressed end of the spectrum, like Cleveland , Detroit and Newark.  These distressed communities have seen zero net gains in employment and business establishment since 2000. In fact, more than half have the communities have net losses on both fronts.

With less new companies forming than ever before, it further impacts distressed communities.   There are a huge number of people and places being left out living in distressed zip codes while attempting to find gainful employment with only a high school education.  While business growth in elite zip codes seems to be especially strong compared to the rest of the country, startup advocates are urging investors to look outside of California, New York and Massachusetts, the three states that get more than two-thirds of venture capital funding.  They are encouraging them look at areas that are suffering economically to help rebuild these communities.

The challenge for our policymakers is rebuild how these distressed communities.  This matter is urgent and complex, but needs to be addressed immediately in many areas especially in the south which seems to be hit the hardest.  In many of these distressed communitiess, hard work, ingenuity, entrepreneurial energy and the desire to get ahead can be found in the people that live there.  However, the job opportunities are not.  In order for America to have a solid economy, we cannot continue to leave these distressed communities behind.  Policymakers need to create ways to entice investors to look at these distressed communities to build employment opportunities with new business establishments.