TAILIEUCHUNG - Why Some Cities Are Growing and Others Shrinking

The ECE industry in California directly employs around 154,000 to 169,700 individuals caring for children. In licensed FCC homes there are 38,989 providers and 19,262 paid assistants (CCCRRN 2009 and Whitebook et al. 2006c), 2 and in licensed centers there are 44,600 teachers, 22,600 assistant teachers, and 6,900 directors (CCCRRN 2011). We estimate that between 24,100 and 39,800 Californians are employed in license-exempt FCC (authors’ analysis, see Appendix C). The vast majority of ECE workers are female. The highest paid center-based teachers with at least a BA earn on average $34,382 (CCCRRN 2011), which is around $16,000 less than the average California kinder- garten teacher (Whitebook et al | Why Some Cities Are Growing and Others Shrinking Dean Stansel Over the last three decades large cities like Pittsburgh Detroit Cleveland Buffalo and Toledo have seen their populations shrink while areas like Houston Atlanta Dallas Tampa and Phoenix have seen their populations grow rapidly. Examining the policy differences between high-growth and low-growth areas can provide evidence that may help declining cities reverse their fortunes. In 1980 Austin Texas and Syracuse New York were roughly the same size. The Austin metro area had a population of about 590 000 and the Syracuse metro area had about 643 000 residents. By 2007 Austin s population had increased by more than 1 million while Syracuse s population had been stagnant. That same disparity exists when one examines the growth of employment and real personal income. Another disparity between the two areas is the tax burden. State and local taxes accounted for nearly 13 percent of personal income in Syracuse but only about 9 percent in Austin. Although there are numerous factors that can influence the growth of individual economies one finds a consistent relationship between low taxes and high economic growth in metropolitan areas in states and in nations. This article details that relationship between taxes and growth for the 100 largest . metropolitan areas. In the 10 highest-tax metro areas the state and local tax burden accounted for about percent of personal income. In those same areas population grew by Cato Journal Vol. 31 No. 2 Spring Summer 2011 . Copyright Cato Institute. All rights reserved. Dean Stansel is an Associate Professor of Economics in the Lutgert College of Business at Florida Gulf Coast University in Fort Myers. He thanks Edward J. Lopez Jeff Noble and an anonymous referee for useful suggestions. 285 Cato Journal percent from 1980 to 2007 employment grew by percent and real personal income grew by percent. In contrast taxes were only percent of personal income .

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