Opportunity Corridor: By the Numbers

What would it take for the Opportunity Corridor project to spark a revitalization of Cleveland’s urban core? That was the question I set out to answer this summer while working as a research assistant at the Fund for Our Economic Future. Through analysis of demographic data from the Census Bureau, I learned that not only does this project have the potential to be transformational, but that transformation is achievable. Below is a breakdown on how we get there.

Background

At the most basic level, Opportunity Corridor is a road project designed to improve regional transportation connectivity by linking the I-77/I-490 interchange with the regional economic engine of University Circle. In the process, the project will pass through some of the most economically challenged neighborhoods in Northeast Ohio. On its face, Opportunity Corridor may resemble merely an attempt to whisk suburban and exurban residents through the core city, with little to no benefit for those people whose communities will be bisected by the new road. However, with deep community engagement and coordinated, visionary planning, this $330+ million project could build on the area’s existing assets to catalyze reinvestment in the neighborhoods and bring jobs to the people who sorely need them.

Key community institutions and economic development organizations are already undertaking efforts to ensure that Opportunity Corridor becomes more than just a road. The following analysis seeks to inform those efforts by pinpointing the kinds of outcomes necessary to substantively improve conditions in these communities.

Who Could Benefit?

The entire Opportunity Corridor project comprises 300+ acres of land in Cleveland’s urban core. To illustrate the scale of the project, the map below shows the planned project in blue, surrounded by a one-mile shaded zone. The red shading indicates economically distressed areas identified by the Fund. The Fund defines economically distressed areas as those Census tracts that both fall in the bottom quartile of median household income and have less than 65 percent labor force participation among “working-age” residents (those between the ages of 25 and 64). In 2012, this represented about 5 percent—or one in 20—of the 4.4 million residents living in Northeast Ohio.

It is clear that development along Opportunity Corridor would touch a significant portion of Cleveland’s economically distressed population.

Here are some sobering numbers to consider:

  • 35,334 people live within a mile of Opportunity Corridor.[1]
  • 20,571 of those people live in areas identified by the Fund as economically distressed, representing 20 percent of Cleveland’s economically distressed population. In other words, one fifth of Cleveland’s economically distressed population and one-tenth of the region’s economically distressed population live within walking distance of this project.
  • The median household income for the area within a mile of the project is about $18,000 a year—less than half the regional average of $47,000; in the economically distressed areas within this radius, the median household income is about $15,000,[2] or less than one-third of the regional average. Even more alarmingly, a full-time worker making $15,000 a year is making an hourly wage below Ohio’s minimum, suggesting that many of those who are employed in these distressed communities work only seasonally or part-time.[3]
  • The labor force participation rate in the area within a mile of the project is 65 percent, but in the economically distressed areas, it drops to 56 percent.[4] That means one in three working-age adults within a mile of the project is neither employed nor even looking for a job, and that in the economically distressed areas, the proportion is a staggering one in two.

These figures illustrate the potential scope of Opportunity Corridor’s impact on neighborhoods that face some of the grimmest economic conditions in Northeast Ohio. The project represents a rare chance to address blight and poverty in core city neighborhoods that have been crying out for wholescale reinvestment for decades.

What Will It Take?

Cleveland is not the only Rust Belt city looking to revitalize its urban core by capitalizing on a large-scale project in the works. Milwaukee’s 30th Street Corridor and Philadelphia’s Lower Schuylkill River District are two examples of similar efforts. Broadly speaking, both aim to retool and revive industrial corridors hollowed out by the decline of manufacturing and the flight of jobs to the suburbs. Combining investment in existing neighborhood assets, civic engagement and a carefully thought out master plan, these areas aim to become economic and employment hubs.[5] Supposing that Opportunity Corridor is Cleveland’s chance to anchor a similar hub in our region, ensuring that residents gain access to the opportunity the project offers is crucial.

The Lower Schuylkill Master Plan calls for the creation of about 20 jobs per redeveloped acre. Translating that job density to the 300 acres of Opportunity Corridor would mean the creation of 6,000 jobs within the project’s area. That figure is higher than the current estimate of roughly 3,000 jobs the project is expected to create, and some if not most of the jobs would likely go to people who do not reside within a mile of the corridor. Even so, as a starting point, that figure of 6,000 jobs makes concrete the immense impact this project could have. Using Census data as context, it is clear that adding jobs to these communities on this scale would be transformational.

Findings:

  • At a bare minimum, it would take about 850 jobs.

Within a mile of the project, there are about 9,000 working-age individuals living in economically distressed areas. Based on that number, increasing the labor force participation rate from the current 56 percent level to above the 65 percent threshold would require about 850 of those people to start working or actively looking for work.[6]

  • To improve labor force participation to the regional average, it would take about 2,000 jobs.

Based on those same population estimates, increasing labor force participation from 56 percent to the regional average of 77 percent would require slightly fewer than 2,000 of those people to re-enter the labor force.

So supposing a substantial portion of the estimated 3,000 jobs this project is expected to create go to residents, it could lift these areas out of the economically distressed designation.

Just Any Job Is Not Enough

While the above analysis is cause for optimism, it is important to remember that increasing labor force participation alone is insufficient to address the range of challenges confronting these neighborhoods. The jobs created must pay a high enough wage that incomes increase, if they are to truly improve the economic conditions for the people who live within the project’s impact area. But what constitutes “high enough”? I turned once again to Census data to illustrate how the income distribution in these distressed communities would respond to higher wages.

Findings:

  • Adding only minimum-wage jobs would not meaningfully increase the median household income in these neighborhoods.

The median household income in economically distressed areas within one mile of the Opportunity Corridor project is about $15,000 a year. Around 1,600 households (or more than half) in these same areas have an annual income lower than $15,000. In Ohio, a full-time minimum wage worker makes about $16,500 a year. Supposing each of those lowest-income households got one minimum-wage job, they would be lifted above the current $15,000 median income. However, even in this scenario, our metric of median household income would not move above $20,000 because the distribution of income in these neighborhoods is skewed so low (though average income would rise considerably).[7]

  • To move the median household income of these areas above what we now consider distressed, it would take about 650 jobs that pay at least $15 per hour.

Given that minimum wage jobs are insufficient to raise our income metric, the logical next step is to ask what kind of wages would be needed to substantially increase it. Considering that being in the bottom quartile of the income distribution is one of the criteria for the Fund’s economically distressed designation, that bottom quartile threshold is a logical number to use to quantify “substantial.” In Northeast Ohio, the bottom quartile of the income distribution begins at about $30,000 per year, which works out to an hourly wage of about $15 for a full-time worker. Again using the distribution of incomes from the census, about 70 percent of households in these neighborhoods make less than that $30,000 threshold. That means 20 percent of those households need to move to the other side of that benchmark before the median income rises above $30,000. There are about 3,250 households in economically distressed areas within a mile of the project, so at minimum, about 650 of those households would need to gain at least one job that pays at least $15 per hour.

Using this analysis, it’s hard to deny that Opportunity Corridor is the kind of urban development project that comes along once in a generation. In the best case, it catalyzes a turnaround for economically distressed neighborhoods in Cleveland’s core city. But it also has the potential to fall far short of that goal. It is my hope that these numbers can provide some benchmarks for those steering development in and around Opportunity Corridor. As I head back to the University of Chicago to complete a bachelor’s degree in economics and public policy, I am grateful to have contributed to this project in some small way. As a native of Northeast Ohio, I hope to see this transformation in my lifetime.


[1] ACS 2012 data; estimates reflect population living in tracts with majority of area within specified radius

[2] ACS 2012 data and author calculations

[3] Based on Ohio minimum wage of $7.95 and a 40-hour work week

[4] Labor force participation rate is calculated at the tract level by dividing the number of people who are employed or actively seeking employment by the total population between ages 25-64. These tract-level estimates are averaged across the area in question.

[6] ACS 2012 data and author calculations

[7] ACS 2012 data and author calculations.