Cross-posted at

In this least good year in decades, someone has to sit at the
bottom. For the most part, the denizens are made up of "usual suspects"
from the long-devastated rust belt region around the Great Lakes. But
as in last year’s survey, there’s also a fair-sized contingent of former hot spots that now seem to resemble something closer to black holes.

Two sectors have particularly suffered worst from the recession, according to a recent study
by the New America Foundation: construction, where employment has
dropped by nearly 25%, and manufacturing, which has suffered a 15%
decline. The decline in construction jobs has hit the Sunbelt states
hardest; the manufacturing rollback has pummeled industrial areas such
as the Great Lakes as well as large swaths of the more recently
industrialized parts of the Southeast.

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Then there is California, a state that should be doing much better
given its natural advantages and vast human capital but whose
regions–with the exception of government-rich Hanford–share various
degrees of distress. The bursting of the real estate bubble has hit the
Golden State hard, but seeing so many poor performances in my adopted
home state is distressing and points to much deeper problems. Rankings
author Michael Shires,
pointing to the looming prospect of high taxes and expanding
regulation, notes that "While California’s economy has come roaring
back many times before, a resurgence this time will be slowed by the
state’s increasing willingness to aggressively tax and regulate those
who will make it happen."

Rust Belt Ruins

The traditional manufacturing heartland long has suffered, and in
this recession industrial jobs have declined rapidly and only now seem
to be slowly expanding. Ever since we started these surveys back in the
early 2000s, cities and towns along the rust belt have inhabited the
bottom rungs.

Starting up from the last place finisher, No. 397 Warren-Troy,
Mich., these old industrial cities dominate the nether regions; of the
bottom ten finishers overall, six come from the Wolverine State,
including long-suffering Detroit, which ranks 394th overall and 65th on
the list of large metros (next to its neighbor, Flint, in last place).
Other rust belt bottom-dwellers include No. 395 Elkhart and No. 392
Kokomo in nearby Indiana.

Perhaps more disturbingly, many of those at the bottom come from
what used to be called "the new South," cities that industrialized late
and often benefited from the flow of jobs from the old rust belt.
Places such as No. 396 Morristown, Tenn., No. 390 Dalton, Ga., and No.
389 Hickory-Lenoir-Morganton, N.C., have suffered from a recession that
has either forced companies to shut down or move overseas.

Sun Belt Busts

Ever since the collapse of the housing bubble in 2007, we have seen
a remarkable turnaround in many Sunbelt regions. Traditionally, these
led the list as emerging boomtowns. Now many appear more like

Take a look at the rapid decline of such hot spots as Las Vegas,
which now ranks 57th out of the 66 largest metros in the country;
Phoenix, now lurking at No. 51; and No. 61 West Palm Beach, No. 56 Fort
Lauderdale, No. 54 Tampa and No. 45 Miami, all in Florida. Many of
these cities stood proudly near the top of the list as recently as
three years ago. Perhaps nothing illustrates the reversal of fortunes
than the fall of Reno, once our fastest-growing mid-size region, now
No. 92 in the same category.

California: The Great Disaster

No state has suffered a greater reversal of fortunes than
California. Five or six years ago California regions generally
inhabited the top half or third of our lists. Today they generally have
fallen even faster than the other Sunbelt states, even though the
state’s economy boasts many assets beyond merely real estate

California now accounts for a remarkable 7 of the bottom 20 regions
on our big metro list. The diversity of the disaster spans both the
urban centers and the exurbs–witness exurban Riverside-San Bernardino
at No. 63 and the city of Oakland at No. 62. Historic high-flyers No.
59 Los Angeles and neighboring Santa Ana-Anaheim Irvine, which checks
in at an abysmal No. 60, didn’t fare much better.

Perhaps more shocking is the poor performance handed in by the state
capital, Sacramento, a former high-flyer now mired at No. 54, and San
Diego, a high-tech haven with a near-perfect climate, that resides at
No. 48. Even No. 47 San Jose/Silicon Valley has done poorly, despite
all the consistent hype about the world class tech center. The likes of
Steve Jobs of Apple and Eric Schmidt at Google may be minting money,
but the region, paced by declines in construction, manufacturing and
business services, now has 130,000 fewer jobs than a decade
ago. San Francisco does not do much better, clocking in No. 42, just
ahead of its equally celebrated alter-ego Portland, Ore.

Prognosis From the Emergency Room

If this list tells us the current occupants of intensive care, what
then are the prognoses for recovery? It seems the story differs for
each of our three basic categories. For the rust belt cities, relief
will only come when the country decides to reprioritize industry, while
allowing for the restructuring of firms and contracts. On the bright
side is the recovery of Ford and the potential for a second life for a
greatly reduced General Motors and even Chrysler. A modest surge in
production of these firms and related industries, such as steel and
electronics, could help some selected regions rise up from the bottom.

The recovery of the Sunbelt economies seems likely to take hold
first. Despite the giddy predictions of East Coast pundits that places
like Las Vegas, Phoenix, Orlando and Tampa are doomed to what Leon
Trotsky allegedly described as the "dustbin of history," this is not
the first time these areas have suffered a setback. They have still not
shown much life yet, but I would not count them out for the long term.
There is a lot to be said for a sunny climate, greatly enhanced
affordability and what many see as a high quality of life.

Ultimately, notes Rob Lang, director of Brookings Mountain West and
professor of sociology at the University of Nevada-Las Vegas, the
assets of these regions have either not changed–pro-business
administrations and warm weather–or, in the case of housing
affordability, have become more attractive. "Phoenix and Las Vegas will
be fine," Lang predicts, noting that Las Vegas
is working to reinvent itself beyond gaming to becoming a "convening
capital" for the world economy. Similar dynamics could also boost
cities in Florida, particularly if they begin focusing beyond tourism
and housing.

And then there is California, which by all rights should be leading,
not lagging, the current recovery. Statewide unemployment, already
12.6%, has been rising while most states have experienced a slight
drop. Silicon Valley companies, Hollywood and the basic agricultural
base of the state remain world-beaters. But the problem lies largely in
an extremely complex regulatory regime that leads companies to shift
much of their new production and staffing to other states as well as
foreign countries. The constant prospect of a state bankruptcy, in
large part due to soaring public employee pension obligations, does not
do much to inspire confidence among either local entrepreneurs or

Hopefully this will be the year when Californians decide that it
needs an economy that provides opportunities to people other than
software billionaires, movie moguls and their servants. It will have to
include much more than the endlessly hyped, highly subsidized "green
jobs." More than anything, it will take rolling back some of the
draconian regulations–particularly around climate-change
legislation–that force companies, and jobs, to go to places that,
while not as intrinsically attractive, are friendlier to job-creating

This article originally appeared at

Joel Kotkin is executive editor of and is a
distinguished presidential fellow in urban futures at Chapman
University. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.