Odd Sign of Strength: Trenton Tops City in Per Capita GDP

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The New York Sun

As unlikely as it may seem, the New York metropolitan area has a lower per capita gross domestic product than Trenton, N.J., and even Casper, Wyo., according to a new economic study. Paradoxically, economists say it may be a sign of New York’s economic strength.

The report, “Human Capital and Economic Activity in Urban America,” compiles a list of the country’s top 20 metropolitan areas in terms of their average per capita GDP between 2001 and 2005. The greater New York area surveyed for the report comes in at no. 15, with an average of $51,440.

Casper takes sixth place, with an average of $57,558, and the Trenton-Ewing area is no. 10, with an average of $52,843. The Fairfield County, Conn., area, which includes the cities of Stamford and Greenwich, takes the top spot, with an average of $74,261.

One of the authors of the study, Todd Gabe, who co-wrote it for the New York branch of the Federal Reserve, pointed to New York’s “human capital” — its amount of skilled and educated workers — as a variable that must be taken into account in order to understand the raw numbers.

Although New York has a large population of unskilled workers with low human capital, it also has a remarkably thriving financial and management sector, Mr. Gabe said.

“If you look at the group of the population in New York that really doesn’t have those skills, it’s remarkable that you have such a high GDP per capita, because you have a group in the population that does have a high human capital, and it’s able to support and drive this human economy,” Mr. Gabe said.

The study’s release comes at a time when the gap between rich and poor in New York is coming under increased scrutiny. Earlier this week, Mayor Bloomberg adopted a new measurement of poverty that says 23% of New Yorkers are impoverished, a far greater percentage than estimated by the federal government.

A Harvard economist who specializes in urban economics, Edward Glaeser, said the economic report was a testament to New York’s ability to incorporate its impoverished residents, especially immigrants.

“Part of the deal is that New York attracts relatively poor people because it’s a relatively good place to live, if you don’t have a lot of assets,” Mr. Glaeser said. “If your city attracts immigrants because it has social services and the ability to get around without a car, then your per capita income is going to be lower because more people live there, but it’s also a sign of economic opportunity.”

He added: “It’s not a sign of the city’s weakness — it’s a sign of the city’s strength.”

Other variables that must be taken into account when thinking about the rankings are the size and different resources of the areas studied, economists said. The areas listed are defined by the federal government and are known as “Metropolitan Statistical Areas.” The selection of the boundaries can appear arbitrary, making one metropolitan area difficult to compare to another.

“You have to compare likes with likes. You’ve got to compare New York with Los Angeles, Miami, Chicago, places like that,” Nobel laureate Edmund Phelps, a Columbia University economics professor, said. He added that “hamlets” such as Anchorage, Alaska — which took ninth place in the list — have too small a population to offer perspective on per capita rankings.

The New York metropolitan area is the country’s most populous, with about 18,815,998 residents, according to a 2007 estimate by the federal Census Bureau It includes all of New York City, two counties of Long Island, twelve counties in Northern and Central New Jersey, and one county in Pennsylvania.

By contrast, according to those same estimates, the Fairfield County region has 895,015 residents — only 5% as many as New York’s. The Trenton-Ewing region has 365,449 residents, the Anchorage region has 362,340, and the Casper region has 71,750.

In general, focusing on these rankings can lead readers to miss the point of the study, Messrs. Phelps and Gabe both said. The paper focuses on how differences in human capital can come from education both inside and outside of schools.

Nevertheless, top officials from Fairfield County and Trenton, upon learning of the study, showed pride in the list.

“I’m pleasantly surprised,” Stamford’s mayor, Dannel Malloy, said. “This is a tremendously strong region. We’re not a bunch of hayseeds.”

A spokesman for the Trenton mayor’s office, Kent Ashworth, expressed similar feelings in an e-mail message. “With all respect to the Big Apple, maybe we’re the Little Apple!” he wrote.


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