Report says cities battle high unemployment, growing skills gap

Washington – Despite many indications of economic health, numerous municipal economies have not fully rebounded, due largely to stalling job growth, according to a recent report from the National League of Cities (NLC).

According to the report, titled 2013 Local Economic Conditions Survey, reasons for these lags are myriad, including the expanding needs of cities' vulnerable populations, local employer requirements misaligning with workforce skills, and growing unemployment rates.

“While today’s report shows some signs of progress, it reminds local leaders across the country that we must continue to drive economic development and job growth in our communities every day,” said NLC President and Mayor of Avondale, Ariz., Marie Lopez Rogers in a release.

Despite the national recovery from the recession, the NLC report found that while 52 percent of survey respondents saw improvements in their cities' unemployment rates, 66 percent of city officials said unemployment continues to be a cause economic instability.

Data from surveyed cities also shows discrepancies between the skills of the workforce and the needs of employers is becoming more of a problem. 53 percent of officials reported that their workforce's lack of skills are causing lags in economic recovery, with 88 percent reporting that workforce alignment has not improved over the past year. Education is also a factor in this problem, with 82 percent of officials saying that the percentages of local residents with post-secondary degrees have not significantly increased.

Consequently, the lack of employment opportunities in these cities has lead to a marked increase in homeless and transitional populations. 53 percent of city officials reported that the demand for basic survival services including food, heat, and clothing is a widespread problem in their community, and 25 percent claimed the condition has actually worsened in the past year.

Not all the NLC's findings were bleak. The report revealed increasing confidence in spending and investment activities. More than 50 percent of city officials said they anticipate an increase in new infrastructure and capital projects; although this spending would be contingent upon federal government not setting new limits on the income tax exemption for interest earned on municipal bonds.

“This report clearly reinforces the urgency for the federal government to accelerate the nation's growth through smart investments and strategic cuts that will help build healthy local economies,” said Clarence Anthony, NLC’s executive director in a statement. “Local leaders continue to press for investments in workforce education to train workers to compete in the next generation of jobs, and in infrastructure investments that put people back to work while improving the ability of business to move products around the country.”

For more information on the NLC and to read the full report visit: http://www.nlc.org/find-city-solutions/center-for-research-and-innovation/economic-development/economic-development-leadership/2013-local-economic-conditions-survey