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Report: Can Distressed Communities Achieve the ‘American Dream’?

If you grew up in what is being considered a distressed community, it is more likely than not that you will not achieve the American Dream.

Harsh words, yes; but they summarize the results of a 30-plus page report released by the Economic Innovation Group (EIG) in February.

The 2016 Distressed Communities Index shines a light on the gap between the richest and the poorest communities in the United States. The report breaks down communities by zip codes and highlights that many of the country’s distressed communities stretch along the southern region of the county.

Read the full report here.

Map of distressed communities in United States Economic Innovation Group

“The Distressed Communities Index (DCI) is an attempt to map and analyze the dimensions of basic community well-being across the United States,” states the report. “The analysis finds that for those living in distressed zip codes, the years of overall U.S. economic recovery have looked much more like an ongoing downturn. Large swathes of the country are indeed being left behind by economic growth and change.”

“In the most distressed 10 percent of zip codes, our analysis found double-digit losses in employment and business establishments."

Seven indicators based on Census data between 2010 and 2014 were used to determine the overall health and well-being of American communities. These indicators included: no high school degree, housing vacancy rate, adults not working, poverty rate, median income ratio, change in employment and change in business establishments.

Figure 1. Profile of the average distressed zip code Economic Innovation Group

Plagued by poverty and joblessness, the report found that the average distressed zip code had 25 percent of adults without a high school diploma, more than half are not working, “nearly one in seven homes stands vacant, and 27 percent of individuals live in poverty.”

Based in Washington, D.C., EIG was founded in March of last year. Since that time, they have been working incrementally on the report. John Lettieri, EIG co-founder and senior director of policy and strategy, said many cities are booming but economic growth is failing to reach their most vulnerable and distressed pockets

“We were surprised -- and troubled -- by the extent to which distressed zip codes continued to decline during the peak years of national economic recovery,” Lettieri told NBCBLK via email. “In the most distressed 10 percent of zip codes, our analysis found double-digit losses in employment and business establishments, compared to an economic boom in the most prosperous zip codes.”

Average values across the seven indicators of community well-being in the top and bottom 10 percent of U.S. zip codes Economic Innovation Group

While they did not focus their research on the demographic makeup of the most distressed communities, Lettieri said simply looking at the map can lead anyone to making initial connections.

“Many of the most distressed zip codes in the Southwest are home to large struggling Native American populations. The large pockets of severe distress in the Deep South are predominantly African-American communities,” he said. “In places like San Antonio and elsewhere in southern Texas, Hispanic populations look to be the most distressed.”

There are other trends that can be discerned as well.

“For example, the share of the adult population without high school degrees, which is one of our seven metrics of distress, runs highest in places where the non-native born population is large,” he said. “But there’s clearly more to tell.”

Matching up the demographic data is being seen as an obvious next step, EIG reports. They expect the outcome of the demographic data to produce some pretty urgent and troubling insights, Lettieri said.