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What the RNC Means for Cleveland’s Struggling Economy

July 17, 2016, 9:00 PM UTC
Views Of Ohio's Second Largest City
Buildings standing in the downtown skyline are reflected in the Cuyahoga River in Cleveland, Ohio, U.S., on Saturday, April 12, 2014. Demand for manufactured products in Cleveland grew at a slow rate as building contractors reported that pipelines remained active while field work slowed, according to an April 16 U.S. Federal Reserve report. Photographer: Ron Antonelli/Bloomberg via Getty Images
Photograph by Ron Antonelli — Bloomberg via Getty Images

Alan Berube is a senior fellow and deputy director of the Brookings Metropolitan Policy Program. A former policy advisor to the U.S. Treasury Department, he is an expert on metropolitan demographics, low-wage workers, and urban poverty.

Election watchers will turn their eyes toward Cleveland this week, when the 2016 Republican National Convention commences.

While there is no shortage of national and global political intrigue surrounding Donald Trump’s likely nomination, there is also an important local aspect to the proceedings. Cleveland provides an important testing ground for many of the issues likely to animate the convention and the general election to follow, such as trade, taxes, education, immigration and race relations.

The RNC’s selection of Cleveland—a traditionally blue stronghold in a very purple state—is notable, not only for what it says about the Republican party’s aspirations, but also because the Cleveland area itself starkly illustrates many of the challenges facing the American economy today.

Brookings’s recent Metro Monitor report provides some insights into how local voters may view the state of the economy. The report ranks Greater Cleveland and the rest of the nation’s 100 largest metropolitan areas on three dimensions of economic success:

· Growth—is the economy expanding opportunities for businesses and workers?
· Prosperity—is the economy becoming more productive and boosting the standard of living?
· Inclusion—is the economy improving for all groups by income and race?

If Cleveland’s voters ask the question, “Am I better off than when President Obama took office?” most would probably answer in the affirmative. While the Cleveland metro area ranked only 54th on growth from 2009 to 2014, it ranked 15th and 16th, respectively, on prosperity and inclusion during that period. Indeed, the region’s GDP per capita—a common measure of the standard of living—increased at roughly twice the national rate over those five years.

Many voters in Northeast Ohio, however, are likely to take a longer view on their economic well-being. And there, the story is much more sobering. Since the early 2000s, the Cleveland metro area has posted one of the slowest economic growth rates in the nation (94th among the 100 largest metro areas), and the share of its residents with low incomes has risen by more than 6 percentage points (compared to less than 2 percentage points nationally). The typical Cleveland worker’s earnings were 10% lower in 2014 than in 2000.

This disparity between recent and longer-term trends in the Cleveland-area economy largely mirrors the trajectory of manufacturing in the region. Manufacturing firms employ about 120,000 people in Greater Cleveland today, up slightly from 2009. Yet that figure is down from nearly 200,000 workers in 2000. This indicates that the region shed many good-paying jobs over the decade, particularly for workers with less formal education, leading to a long-term drop in wages and an increase in poverty.

And although Cleveland has posted more positive recent trends in employment and wages, those gains have accrued disproportionately to white residents. From 2009 to 2014, typical earnings rose by 8% for whites, while they fell by 9% for African Americans. By 2014, 37% of the region’s nonwhite population had low incomes, compared to 25% of the white population.

Those trends represent, in a way, the emergence of two Clevelands. As the RNC delegates gather downtown, they will see a beautifully renewed Public Square, a vibrant cultural scene, and booming residential real estate. Yet many of Greater Cleveland’s lower-income black residents continue to live in distressed neighborhoods just a mile or two away, where transportation and training for accessing good jobs seems quite distant. This growing inequality by race and place is affecting many regions around the country today.

Cleveland thus represents an important crossroads, not only for the 2016 race, but for the future of America’s economy and society. In this way, the Republicans have chosen a critical venue for kicking off the general election. This week and the months to follow will reveal whether they and their Democratic opponents can present an affirmative vision for how Washington can better support the region’s prosperity—and perhaps win the nation’s most coveted electoral prize in the process.