77% Of Inner City Jobs Held By Non-Inner City Residents.

The vast majority of jobs in America’s economically distressed inner cities — 77 percent — are not held by inner city residents, but rather by commuters from surrounding areas, according to the latest installment of an ongoing study released by the Initiative for a Competitive Inner City [ICIC].

The “State of the Inner City Economies” is the first national look at the economic performance and potential of inner cities as economies. The study also found that the average annual salary for jobs located in inner cities is $38,000, virtually the same as an average of $39,000 for the surrounding metropolitan areas.

In total, there are 12.7 million jobs located within America’s inner cities, representing 8 percent of the U.S. private sector economy. The largest inner city employers are hospitals, universities and local commercial services. These findings suggest that the inner city economies are much bigger and stronger than previously known.

And corporate chieftains have begun to take notice when it comes to the market opportunities in America’s inner cities. A survey, conducted by KRC Research and sponsored by Bank of America, of Fortune 1000 executives released today showed that 41 percent of respondents say their companies are likely to enter or expand into inner city areas over the next 10 years.

“These statistics demonstrate that several of our nation’s inner cities are indeed competitive locations for business,” said Michael Porter, a Harvard Business School professor who founded ICIC. “In fact, there is no basis for the idea that locating business operations in the inner cities makes it difficult to recruit labor. The reality is if you create jobs, the workers will follow.”

As part of its ongoing study of inner cities, ICIC looked at four key economic growth indicators: job growth, wage growth, business startup rate and bankruptcy rate. Job growth figures were based on a compound annual growth rate over a seven-year period.

The study found that more than 70 percent of inner city areas gained jobs, with nine cities showing faster job growth than the rest of their surrounding metropolitan areas. These cities include Tulsa, OK; San Jose; Jersey City, NJ; Boston; Augusta-Richmond County, GA; Milwaukee; and three North Carolina cities – Charlotte, Greensboro and Winston-Salem.

ICIC studied the inner cities of the top 100 U.S. central cities. Forty-one of the cities are based in the South region of the U.S., 30 in the West region, 20 in the Midwest, and nine in the Northeast.

In terms of overall job growth, ICIC found that inner cities still lag the national average. Inner city jobs grew at a rate of 1 percent over the seven-year period, compared to 5 percent growth nationally.

“Despite the gains made by inner cities, it’s clear there is still much work to be done,” Dr. Porter said. “And the data shows that corporate executives not only have the opportunity to help spur job growth in inner cities, but to also create opportunities for their companies and give them a distinct competitive advantage.”

ICIC defines an inner city as a U.S. census tract having a 20 percent poverty rate or higher, or two of these factors: a poverty rate or unemployment rate one-and-a-half times or higher than their surrounding metropolitan area or medium household income one-half or less that of the surrounding metropolitan area.

The study also found that 31 percent of inner city jobs are in so-called “traded clusters” as compared with 32 percent nationally. Traded clusters, which are considered a critical measure of economic vitality, are comprised of businesses that sell goods or services outside their immediate regions. These businesses are more interlinked with the national and global economy and tend to have higher rates of productivity, innovation and wages. The fastest growing sectors of inner city clusters are information technology, entertainment and business services.

The goal of the State of the Inner City Economies project is to stimulate the creation of jobs, income and wealth for inner city residents by:

Serving as a standard source for assessing inner city economic performance and competitive position;

Generating insights into the nature of inner city economic opportunities;

Raising the profile of inner cities as competitive business locations;

Motivating and catalyzing change in inner cities.

For more information at http://www.icic.org