Pensacola, Florida
Wednesday October 18th 2017

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Missing Out on the Boon

By Rick Outzen

Last week, Zach Jenkins, director of the Haas Center for Business Research and Economic Development at the University of West Florida, wrote a column that showed our region’s economic recovery has not equally impacted all segments of our community.

While Governor Rick Scott has touted our state’s recovery and job growth, people living in the most economically-depressed neighborhoods of our community have doubts the economy recovery even exists.

Jenkins wrote, ‘The Distressed Community Index for Northwest Florida communities demonstrates that such doubts are well-founded as recovery primarily benefitted the prosperous communities while distressed communities continue to lose jobs and businesses.”

Economic Innovation Group (EIG), a bipartisan think-tank based in Washington, D.C., created the Distressed Community Index  (DCI) score to measure the well-being of a community. EIG calculated a DCI for more than 26,000 ZIP codes within the United States, using the U.S. Census Bureau’s American Community Survey data on employment, education, poverty, housing vacancies and income.

A DCI of 55 for a ZIP code indicated the “community” represented by this ZIP code is in the 55th percentile of economically distressed communities in its state. A score of 20 or below indicates a “prosperous” community, while an 80 or above indicates a “distressed” community.

Escambia County had DCI score of 51.6, Santa Rosa 18.7. However, the DCI changed dramatically between zip codes. The 32504 zip code area covers Northeast Pensacola around Cordova Mall and the Pensacola International Airport. Its DCI score was 94. The 32505 zip code area encompasses West Pensacola, stretching north to the Brent and Ensley communities. Its DCI score was 35.7.

“When you look at the communities that are most distressed, what you see is a stark change between the prosperous communities that don’t have any distress and the ones that are distressed,” Jenkins told Inweekly. “Particularly, with respect to the recovery, you see a lot of employment growth and you see a lot of businesses growing and more businesses coming into the prosperous communities. That’s not true for the communities that are considered in distress.”

The Haas Center used DCI to compare the top fifth to the bottom fifth of Northwest Florida’s 91 ZIP codes located in the 14 counties west of Jefferson County. In Northwest Florida’s most prosperous communities, employment grew by an average of 11.9 percent, and business establishments increased by 2.3 percent from 2010 to 2013. However, the most distressed communities saw employment decrease by 7.7 percent on average and business establishments fall by 7.54 percent over the same time period.

Jenkins said that distressed neighborhoods have trouble turning around, because people don’t believe the economy is recovering. The neighborhood is caught in a spiral of decline.

“If you’re walking down the street and you’re seeing vacant homes all over the place, the vacancies show a lack of investment in the community and the residential area becomes rundown,” said the Haas Center director.  “Also, it shows that people have voted with their feet. They’re fed up with their community and the lack of job opportunities, and so they’ve left.”

Jenkins said another sign of community distress is the number of businesses closing and leaving an area.

“These areas were also losing businesses, when the rest of the country was experiencing pretty significant growth since the Great Recession,” he told Inweekly.

He added increases in the number of adults without a high school diploma make an area less attractive for businesses.

Jenkins added, “Obviously, your workforce has got a problem. No businesses are going to want to come into those areas, and it’s a dangerous cycle because you’ve got a problem with the workforce that is going to continue to get worse—which means it’s less attractive for even more businesses. It’s really going to be difficult to break that cycle.”

In Pensacola, we almost have two different cities—one that is in an economic boon while the other has fallen further behind.

While Northeast Pensacola has seen its employment improve by 1.7 percent, West Pensacola has suffered more than a 20-percent decline. Businesses have increased by 2.8 percent in the 32504 zip code and are relatively flat in the 32505 zip code. The poverty rate is more than double on the west side versus east side of Pensacola.

For the past two years, considerable attention has been given by area leaders to help with the recovery of north Escambia County, particularly in the Town of Century. Its zip code, 32535, has a DCI score of 98.5, ranking 11 out of 923 zip codes in Florida.  Nearly three-fourths of its adults are not working. A quarter of the population does not have a high school degree, and the change in businesses has dropped 15.5.

Jenkins said the wide gap between the prosperous and distressed neighborhoods is referred to as “spatial inequality.”

“What that means, in kind of layman’s terms, is you’re looking at what’s the average level in the community and then how wide are they spread around there,” he said. “In fact, a lot of the Florida counties that I looked at—Escambia, Bay County, and then, in particular, Okaloosa—they were pretty high on the level of disparity between, essentially, the haves and the have-nots, relative to the national averages.”

Haas Center analysts found that Escambia, Okaloosa and Bay counties had spatial inequality scores of 19.8, 16.3 and 22.3, respectively. The findings were consistent with Economic Innovation Group’s generalization that counties in the Southeast United States have the highest levels of spatial inequality in the country. EIG attributed this finding to the presence of economically distressed low-density rural and high-density urban areas within the same county as prosperous suburban communities.

“You’ve got downtown Pensacola and Gulf Breeze doing pretty well in different pockets, “ said Jenkins. “Then, you cross a couple blocks and all of a sudden you’re in an area that’s the complete opposite.”

The research by the Haas Center provides more support for the need for a Promise Zone designation for West Pensacola (Inweekly, “Breaking the Zip Code Poverty Link,” April 14) and job training efforts of George Stone Technical Center and Pensacola State College.

For more information about the UWF Haas Center for Business Research and Economic Development and its research, visit haas.uwf.edu.