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Merced climbs list of ‘best-performing cities,’ research firm says

The tower atop the old Merced County Courthouse is viewed from the Shannon Parcade, backed by moving storm clouds, on Tuesday, Dec. 22, 2015, in Merced. The city ranked No. 47, up from No. 71 last year, on the Santa Monica-based Milken Institute’s 2015 list of Best Performing Cities. Milken uses a formula incorporating job growth, wage growth and improvements in high-tech industries, among other factors.
The tower atop the old Merced County Courthouse is viewed from the Shannon Parcade, backed by moving storm clouds, on Tuesday, Dec. 22, 2015, in Merced. The city ranked No. 47, up from No. 71 last year, on the Santa Monica-based Milken Institute’s 2015 list of Best Performing Cities. Milken uses a formula incorporating job growth, wage growth and improvements in high-tech industries, among other factors. cwinterfeldt@mercedsunstar.com

In a ranking of 200 large cities across the country, Merced sits as the 47th best-performing city, topping all of its Central Valley neighbors, according to a research firm.

The city ranked 24 spots higher than last year, according to the Santa Monica-based Milken Institute, which reported 2015’s Best Performing Cities using a formula incorporating job growth, wage growth and improvements in high-tech industries, among other factors.

The institute, founded more than two decades ago, is a nonprofit think tank that aims to study “finance, business, philanthropy and policy to determine how public and private investment can drive progress.”

Milken used a year-over-year ranking as well as a five-year comparison to determine each city’s prosperity. The numbers came from 2009 to 2014.

Minoli Ratnatunga, a Milken Institute research economist who focuses on regional economic development and competitiveness, said most Valley cities have improved their standing from last year.

Merced’s improvement in wage and job growth weighed heavily in its ranking, she said, supplemented by increases in high-tech industry. Merced is also working to return to prerecession numbers.

“To some extent the growth rates will capture recovery,” she said. “Just getting back to previous levels of employment might constitute some of that growth.”

Merced was 29th in job growth for 2013-14 as it added 1,500 jobs in food manufacturing alone. The city’s year-over-year wage growth ranked eighth, Ratnatunga said, because it was 3 percent better than the national average.

The city’s location in the state makes it prime for warehouse and transportation growth, she said. UC Merced is also a driver in the city’s improvement.

Merced’s high-tech growth was also above the national average, she said, but the region’s technology industries are below the national average to begin with.

“Obviously, it’s possible to grow much more off a small base than off a large base,” Ratnatunga said. “I wouldn’t attribute too much to the high-tech growth in the last five years.”

A liability in Merced remains its low attainment in education, she said, because that makes the area less desirable to technology companies. About 33 percent of Merced County adults have not finished high school, and 12 percent have earned a bachelor’s degree, according to a report this year from Measure America, a project of the Social Science Research Council.

City leaders said the long-standing institute’s ranking is more meaningful than those of upstart firms that often shine a less positive light on Merced when ranking it among other cities. For example, in November, Wallet Hub, a website started in 2012, ranked Merced at 1,247 out of 1,268 on its list of 2015’s Best & Worst Small Cities in America.

City Manager John Bramble said “it’s exciting news” to move up on the Milken ranking. “There are a lot of metropolitan-designated cities that would like to be on there,” he said.

Valley towns Fresno, Bakersfield, Visalia and Modesto ranked 54, 64, 79 and 85, respectively. Bakersfield fell several dozen slots, but the other cities all moved up on the list compared with last year.

Merced’s rank of 47 is the best it has seen since the recession. It ranked 184 in 2009, its low point in recent years, according to Milken.

San Jose, San Francisco and Provo, Utah, top the list in that order for the national ranking.

Thaddeus Miller: 209-385-2453, @thaddeusmiller

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