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- When asked about the slow growth of\u00a0the US economy, Chicago Mayor Rahm Emanuel and Newark Mayor Ras Baraka both said that urban inequality and a lack of public transit are two of the largest causes.<\/strong><\/li>\n
- More than 80% of the nation’s GDP\u00a0comes from cities.<\/strong><\/li>\n
- If urban economies become less productive, the country’s economy will be slower to grow, contributing to low wages.<\/strong><\/li>\n<\/ul>\n
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\nIn the United States,\u00a0economic growth\u00a0slowed in the first quarter of 2018 \u2014 the economy grew 2.3%, slightly less than the 2.9% rate at the end of 2017.<\/p>\n
The Great Recession ended nearly a decade ago, but the US is still grappling with a slow-growth economy, as President Donald Trump has\u00a0noted\u00a0since his campaign. From the late 1940s to early 1970s, the economy grew an average of 3.8% per year. But since 2004, the growth rate has dropped by almost half.<\/p>\n
GDP growth helps increase wages and salaries, allowing more people to enjoy the country’s wealth,\u00a0according to the Bureau of Economic Analysis.\u00a0But currently, two factors are contributing to the country’s slow economic growth and low wages, according to the mayors of two major US cities. Rahm Emanuel from Chicago, Illinois and Ras Baraka from Newark, New Jersey recently spoke about the problem at\u00a0a conference<\/a>\u00a0hosted by The Wall Street Journal.<\/p>\n
In a discussion about the future of American cities, Emanuel and Baraka agreed that urban inequality and a lack of public transit are likely hurting the nation’s economy overall.<\/p>\n
Urban inequality slows economic growth in cities<\/h2>\n
![\"newark](\"https:\/\/amp.businessinsider.com\/images\/5ae7796319ee861e008b46be-750-500.jpg\")
People cross a street during mayoral elections in Newark, New Jersey, May 13, 2014.\u00a0<\/em>Reuters<\/span><\/span><\/em><\/em>\u00a0<\/figcaption><\/figure>\n GDP growth is largely driven by\u00a0an increase in labor productivity and an expanding pool of workers. When people can’t find or access jobs, that has a ripple effect on the national economy, Emanuel and Baraka each pointed out.<\/p>\n
Since Trump took office, cities have seen a decline in federal money dedicated to infrastructure, housing, and health services. Emanuel said that lack of investment hurts the country overall \u2014 not just local metro areas.<\/p>\n
“Eighty percent of the nation’s GDP comes from cities,” Emanuel said. “You have an administration that is openly hostile \u2014 whether that’s on public transportation or on housing \u2014 to the places that are creating the greatest amount of economic growth. It’s basically undermining America.”<\/p>\n
Baraka offered a few ways that the US can address economic inequality in cities, which are becoming increasingly expensive places to live. He said free or low-cost higher education, a higher minimum wage, more affordable housing, and stabilized rent regulations can help.<\/p>\n
In early May, the city of Newark announced a proposed ordinance that will\u00a0provide<\/a>\u00a0low-income residents with free lawyers during eviction proceedings. The city is also attempting to increase the number of college graduates there. Rutgers University, for example, is partnering with several private, public, and nonprofit groups to give\u00a0free tuition<\/a>\u00a0to students from Newark households with an income of $60,000 or less.<\/p>\n
“Equity is incredibly important, because that’s what affects the labor force,” Baraka said, adding, “The country’s wealth is coming from cities, and inequality is stunting America’s growth.”<\/p>\n
Public transit helps fuel economic growth<\/h2>\n
Historically, urban areas have received\u00a0less federal investment\u00a0per capita than their suburban counterparts. After World War II, the federal government devoted billions toward building new\u00a0American suburbs\u00a0and\u00a0the interstate highway system, for example.<\/p>\n
\n“If we allocated the same resources toward cities and mass transit, it would spur economic growth,” Emanuel said, referring to the government’s suburban investments in the 20th century.<\/p>\n
There’s evidence that reliable public transit helps\u00a0boost economic productivity, innovation, and wages over time,since it encourages more people to live and work in a city center. According to\u00a0a 2013 paper<\/a>\u00a0from Rutgers University, the hidden economic value of transit could be anywhere from $1.5 million to $1.8 billion per year, depending on the size of the city.<\/p>\n
![\"newark](\"https:\/\/amp.businessinsider.com\/images\/5b02e851bd6fc24d088b4fe7-750-500.jpg\")
Train schedule is seen as commuters walk at Newark Penn Station, Friday, March 11, 2016, in Newark, N.J.\u00a0<\/em>AP<\/span><\/span><\/em><\/figcaption><\/figure>\n New York City is a strong example of this phenomenon \u2014 it has\u00a0one of the most productive local economies, is the densest metro in the US, and has\u00a0one of the most robust public transit systems\u00a0in the US.\u00a0Some experts say\u00a0these three characteristics are dependent upon each other.<\/p>\n<\/div>\n
\n“Folks want to live close to transportation,” Baraka said. “They want to live by the train stations and amenities. They want to be able to hang out after work a little longer, which is driving business to cities. Industrial parks in the suburbs are no longer working.”<\/p>\n
The nation’s economy may continue to lag unless it invests in equity, he added.<\/p>\n
“Until we begin to focus on how to include everybody in the right way, we’re not going to see significant growth in the US GDP in a way that competes with the rest of the world,” Baraka said. “Inequality has haunted us for 300 or 400 years.”<\/p>\n<\/div>\n<\/div>\n
- More than 80% of the nation’s GDP\u00a0comes from cities.<\/strong><\/li>\n