The 10 most distressed large cities in America

DetroitRebecca Cook /ReutersLaborer Brian Kuhn paints over graffiti on a blighted building near downtown Detroit in Detroit, Michigan, December 10, 2014.

Detroit, Michigan is America’s most distressed city, according to a new study by
the Economic Innovation Group (EIG) that analysed over 25,000 ZIP codes in the US.

The study examined these seven variables: educational attainment, housing vacancy rates, unemployment rates, poverty levels, median income ratios, per cent changes in employment, and per cent change in establishments.

In order to determine educational attainment, the study looked at the per cent of the population 25 years and over who have earned high school degrees. Meanwhile, the median income ratio calculated the ratio of the ZIP code’s median income to the median income in the state as a whole. These figures, along with the unemployment rate, poverty rate, and housing vacancy rate, are based on numbers from the American Community Survey from the 2009-2013 period.

The per cent change in establishments and change in employment estimate the change in the number of businesses and number of people employed in a particular ZIP code and reflects the business growth rate.

Based upon those criteria, EIG then ranks the cities according to the percentage of population who lives in a ZIP code that falls into the top 15% of distressed ZIP codes in the US. The study ranked only cities with populations of at least 400,000.

According to the EIG’s study, here are the top 10 most distressed large cities in the US:

1. Detroit, Michigan

Distressed Population: 94%

A vacant, boarded up house is seen in the once thriving Brush Park neighbourhood with the downtown Detroit skyline behind it in Detroit, Michigan March 3, 2013. ReutersA vacant, boarded up house is seen in the once thriving Brush Park neighbourhood with the downtown Detroit skyline behind it in Detroit, Michigan March 3, 2013.

Detroit is the most distressed city by a long shot, the report found. Detroit has been hit by one of the worst economic declines in American history, filing for bankruptcy in 2013 and has often made headlines in recent years because of its ridiculously cheap houses.

As of May, the Detroit metro area had an unemployment rate of 6.6%. Nearly 40% of the city’s population were living under the poverty line over the 2009-2013 period.

The city’s median income ratio is also one of the worst in the US, with a median household income of $US26,325 compared to $US48,411 for the entire state of Michigan.

2. Memphis, Tennessee

Distressed Population: 68%

Like much of the South, the home of Elvis Presley struggles with poverty and unemployment.

Although Memphis residents are better off than 72% of ZIP codes in America when it comes to its median income ($US36,912 per year over the 2009-2013 period), it is on the other end of the spectrum when it comes to poverty levels and unemployment ratios.

In May 2015, the unemployment rate in Memphis was 6.6%, according to the Bureau of Labour Statistics (BLS) That’s 1.3 percentage points higher than the national average. Over the 2009-2013 period, over a quarter of the people in the city lived in poverty compared to less than 18% for the entire state of Tennessee.

3. Milwaukee, Wisconsin

Distressed Population: 55%

Milwaukee was once home to many companies andproduced everything from beer to water tanks, but the city was badly pummelled by the Great Recession.

Over the 2009-2013 period, over 29% of the city’s population was living below the poverty line. As Richard Florida reported for Atlantic Cities last year, Milwaukee is also part of a large metro area where the poor are segregated from everybody else.

The unemployment situation in the city of almost 600,000 people also remains high at 7.4% in March 2015.

4. Atlanta, Georgia

Distressed Population: 52%

Atlanta is known as the economic engine of the South but has a shockingly high poverty rate, as Business Insider has previously noted.

In this city of almost half a million people, a quarter was living under the poverty line over the 2009-2013 period.
Its poor neighbourhoods have also been expanding very quickly in recent years, according to a 2014 report from the Brookings Institution.

5. Baltimore, Maryland

Distressed Population: 48%

Baltimore has been in the news over the last few month
s because of
riots sparked by the death of Freddie Grey. Its deep-seated problems are reflected in the EIG’s study.

The median income for a household over the 2009-2013 period was $US41,385 compared to $US73,538 in Maryland and $US53,046 in the US. More than 23% of the city lived in poverty over the same period.

6. Fresno, California

Distressed Population: 48%

Over aquarter of the city’s inhabitants living in povertyover the 2009-2013 period. Theunemployment rate in May 2015was still at 9.8% in this city of almost 1 million people.

The city’s poverty has gotten national attention in recent years. In 2009, The New York Times reported on a “surge in Shantytowns” in cities such as Fresno.

7. Las Vegas, Nevada

Distressed Population: 46%

Las Vegas was hit hard by the housing bust. Even in 2010, when the rest of the US was recovering, the New York Times reported that it was still in its “deepest economic rut” since the 1940s.

Las Vegas still deals with major unemployment, and the metro area including Vegas had an unemployment rate of 6.6% as of May 2015.

Still, the city’s median income, at $US51,143 a year per household over the 2009-2013 period, puts the city in the 40 most favourable ZIP codes areas in the country.

8. Chicago, Illinois

Distressed Population: 42%

In Chicago, high unemployment rates and poverty levels are the major causes for the city’s distress.

Over 20% of the city’s 2.7 million citizens were living in poverty over the 2009-2013 period.

Despite those hardships, the city ranks in the upper 30 most favourable ZIP codes areas in terms of change in business establishments, showing that business in the city is growing.

9. Tucson, Arizona

Distressed Population: 39%

Poverty levels have been persistent in this city where over a quarter of the population was living in poverty over the 2009-2013 period.

Tuscon, with a population slightly over half a million people, has not been recovering well from the Great Recession. As of last year, WalletHub ranked Tucson as one of the worst cities in terms of employment and earning opportunities and economic environment.

10. Houston, Texas

Distressed Population: 38%

Houston skylineAP Photo/Pat SullivanA railing from an apartment complex and the Houston skyline overlook the Buffalo Bayou as it snakes its’ way into downtown Friday, April 18, 2014

Although Houston ranks as the 10th most distressed city in the US, it is also home to great disparities.

The city benefits from oil and gas profits, but 22.9% of its population lived in poverty over the 2009-2013 period. Here’s how the American Bar Association described Houston this year:

“In spite of a booming economy, gleaming new office structures towering over downtown like California Redwoods and ubiquitous construction sites throughout the region, almost one-fourth of the city’s population find themselves living below the poverty line despite the fact that the area’s median income is on the rise. And 38 per cent of the city’s children are mired in poverty; many with little hope of escaping their circumstances.”

NOW WATCH: Why mosquitoes bite some people and not others

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.