Despite tough economic times, America’s 51 largest metro areas have the opportunity to collectively realize $218 billion in much-needed new wealth by focusing on performance improvements in three key areas: increasing the educational attainment of their citizens, reducing the number of vehicle miles traveled per person each day and reducing the number of people living in poverty, according to a new analysis, City Dividends, released by CEOs for Cities.
City Dividends, which was developed by Portland, Ore., economist Joe Cortright and presented to members of CEOs for Cities at its National Meeting in Chicago, calculates the monetary gains the top 51 metros could realize if they increase their college attainment by one percentage point (The Talent Dividend), reduce VMT by 1 mile per person per day (The Green Dividend) and reduce the number of people in poverty (The Opportunity Dividend) by one percentage point.
City Dividends is designed to help urban leaders make the case for pubic policies that will help raise incomes, encourage citizens to drive less and increase opportunities for bringing people out of poverty. City Dividends establishes a framework for examining the policies, actions and conditions that are needed for cities to actually realize these gains in practice.
In an era of fiscal constraint at every level of government, leaders must innovate new ways for producing wealth and opportunity. Representing the nation’s primary source of wealth, employment and global competitiveness, cities are where the strategies to keep America moving forward must be developed and launched. Our objective in this work is to estimate the economic and fiscal stakes involved in each of these key aspects of urban revitalization. City Dividends can be customized and applied to the situations of individual metropolitan areas and used as a tool in policy planning.
Carol Coletta, former president and CEO of CEOs for Cities
Per capita income and college attainment rates are closely correlated. Using data from 2010, each additional percentage point improvement in aggregate adult four-year college attainment is associated with a $856 increase in annual per capita income. Raising the median adult four-year college attainment rate of the top 51 metro areas from 30.7 percent to 31.7 percent would be associated with an increase in income of $143 billion per year for the nation.
In the 51 largest U.S. metro areas, the average person drives about 25 miles per day. If we could reduce that by one mile per day (about 4 percent), 156 million Americans would collectively drive 156 million fewer miles per day, or about 57 billion fewer miles per year. At $3.50 per gallon for gasoline, the nation would save $10 billion per year on fuel. Add the expense of purchasing and maintenance of vehicles, and the total savings would be $31 billion per year.
In the nation’s 51 largest metro areas, the median public expenditure on Medicaid, food stamps and assistance to families including the Temporary Assistance to Needy Families (TANF) program, Earned Income Tax Credit (EITC), and other state administered general assistance was $19,000 per person living in poverty in 2010. At this level, the national Opportunity Dividend, resulting from a one percentage point reduction in poverty, is calculated at $31 billion per year.