From Great Recession to Great Reshuffling

What we found amounts to a “Great Reshuffling” – a sorting of human capital, job creation, and business formation that has had vast implications for Americans and their communities. In the years following the recession, top-tier places have thrived, seeing meteoric growth in jobs, businesses, and population. Meanwhile, the number of people living in America’s most distressed zip codes is shrinking as the nature of distress becomes more rural. But the gaps in well-being between prosperous areas and the rest have grown wider, and national rates of growth have become more distant from the experience of the median community. What was once a country of disparate places that converged towards prosperity is now a country of places drifting further apart.The Great Reshuffling has left more Americans enjoying prosperity. The number of people living in prosperous zip codes swelled by 10.2 million between the two periods to a total of 86.5 million—more than any other quintile. Meanwhile, the number of Americans living in distressed zip codes fell by 3.4 million between the two periods to a total of 50 million—the smallest population of any quintile.While the overall population in distressed zip codes declined, the number of rural Americans in that category increased by nearly 1 million between the two periods. Rural zip codes exhibited the most volatility and were by far the most likely to be downwardly mobile on the index, with 30 percent dropping into a lower quintile of prosperity—nearly twice the proportion of urban zip codes that fell into a lower quintile. Meanwhile, suburban communities registered the greatest stability, with 61 percent remaining in the same quintile over both periods. Urban zip codes were the most robust—least likely to decline and more likely than their suburban counterparts to rise.