Story at a glance
- New Orleans saw the biggest jump in productivity growth since 2007, new research from the Kenan Institute of Private Enterprise shows.
- The city’s shift toward high-productivity sectors like technology and health care helped drive its rise to the top.
- Meanwhile, Las Vegas saw the biggest dip in productivity ranking since 2007.
New Orleans topped the list of U.S cities with the greatest jumps in productivity growth over the past 15 years, according to a report published Wednesday by the Kenan Institute of Private Enterprise.
Of the 50 largest U.S. cities, New Orleans’ rank rose by 28 places since 2007. The city ranked 11th overall for workforce productivity.
The “Power of Productivity” report, part of The American Growth Project, ranked Pittsburgh in second place, as it rose 23 places over the past 15 years. It was followed by Salt Lake City; Portland, Ore.; and Columbus, Ohio, respectively.
Researchers defined productivity as the “level of economic output generated by each worker.” Several methods can help boost this metric, including mechanization and more efficient energy use. They calculated productivity by dividing the gross domestic product of an extended metropolitan area (EMA) or industry by respective employment levels.
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Fresno, Calif.; San Antonio; Cincinnati, Oklahoma City and Cleveland rounded out the top 10 most improved cities.
The findings reflect a shift away from less productive sectors in these regions towards areas like technology and advanced manufacturing, researchers said. Meanwhile, cities like Tampa, Fla., and Las Vegas have struggled to rebound from pandemic-era slowdowns and ranked at the bottom of the list.
“New Orleans’ No. 1 spot on our list of top gainers may come as a surprise, but the city’s shift in industry mix during the last 15 years toward high-productivity sectors such as tech, education and healthcare explains much of what we are seeing in the data,” said Gerald Cohen, chief economist at the Kenan Institute in a statement.
The city’s technology sector grew by 35 percent in the window studied, only outpaced by that of Seattle and San Francisco.
“It’s worth noting that New Orleans’ population remains below pre-Hurricane Katrina levels, and deep-seated inequality is still a problem,” authors wrote. “Moreover, our 2007 starting point means that some of this growth reflects the recovery from Hurricane Katrina, which occurred two years earlier.”
Four of the top 10 cities are located in the Rust Belt region, an area typically associated with industrial decline. The regions tended to see expansion in higher education, health services and professional and business services, researchers said. Although these economies experienced an efficiency boost, they’ve also seen relatively weak job growth.
Since 2007, the disparity between the most and least productive areas widened, signaling a rising trend of inequality between cities. There was a 45 percentage point gap between the most and least productive cities in 2007: Hartford, Conn. and Greenville, S.C., respectively. In 2022, the gap between the most productive city, San Francisco and the least productive, Orlando, Fla., grew to 113 percentage points.
Authors also cautioned “labor productivity is not a singular determinant of societal health,” adding “richer cities also tend to have higher costs of living, so residents of those microeconomies may not be as well off as the numbers suggest.”
Furthermore, although U.S. productivity has steadily increased during the last 130 years — rising by about 2.1 percent annually — recent figures suggest 2022 will see the largest productivity decline in the past half-century, as productivity in all 50 of the largest U.S. cities declined this year.
Virginia Beach, Va., Milwaukee; and Memphis, Tenn., joined Las Vegas and Tampa in the bottom five slots on the list, with rankings falling by 16, 15 and 14 places, respectively.
Published on Dec 07,2022