Center on Urban & Metropolitan Policy

Eds and Meds: Cities’ Hidden Assets By Ira Harkavy and Harmon Zuckerman1

Institutions of higher learning2 (“eds”) and medical facilities (“meds”) are some of the largest “Eds and meds private employers in America’s biggest cities. A survey of the top 10 private employers in the largest 20 U.S. cities found that: are often over- I Nearly 550,000, or 35 percent, of I An ed or med is a top employer in the 1.6 million people who work every one of these cities despite their looked fixed for the top ten private employers differences in age, region, and devel- are employed by eds and meds. opment pattern.

assets that, I At least half of the employers in five I Although the District of Columbia’s of the cities—Washington, Philadel- major employer is the federal govern- phia, San Diego, Memphis, and San ment, eds and meds account for 76.7 especially dur- Jose—are eds and meds. percent of the jobs generated by the top ten private firms. I Sixty-nine out of the 200 largest ing a booming private firms, or 35 percent, are eds I In Baltimore, Detroit, and Philadel- and meds. phia, the number of eds and meds jobs in the ten largest firms make up economy, could I In four of the cities—Washington, over 10 percent of the entire city’s job Philadelphia, San Diego, and Balti- base. In half of the cities surveyed, more—eds and meds account for these jobs make up over 5 percent of help turn the more than half of the jobs generated. the city’s total employment.

tide around

The Importance of Eds and meds as one of those overlooked fixed for cities.” and Meds for Cities assets. In all the competition for new jobs and businesses, eds and meds have largely ities have been struggling over the been ignored, even though they generate a last three decades because of a substantial number of jobs and contribute to shrinking job base, loss of middle- the local economy. In a time when suburbs class families, and rising unemploy- are generating jobs considerably faster than Cment and crime rates. However, cities have central cities, eds and meds, like all employ- often overlooked fixed assets that, especially ers, are becoming increasingly important for during a booming economy, could help them turn the tide around.3 This study looks at eds continued on next page

Cent August • The Brookings Institution • Survey Series 1 The 1999 Figure 1 cities as they struggle to keep their Washington DC’s Top Private Employers share of jobs in the metropolitan area. 18,000 Eds and meds also have unique characteristics that add value above 16,000 and beyond creating jobs. Eds and 14,000 academic meds constantly conduct research and impart technical expert- 12,000 ise on their students and workers. In 10,000 an era increasingly dependent on knowledge-based industries, these 8,000 institutions contribute to a more expe- rienced and educated workforce, a 6,000

resource desirable in all cities. Fur- Number of Employees 4,000 thermore, their economic activities foster an entrepreneurial spirit and 2,000 attract additional economic growth. 0 George WashingtonGeorgetown U.Howard U.& Hospital& Hospital U.Washington & HospitalPotomac Hospital Electric WashingtonCenter PowerBell Post Co. AtlanticChildren's of Washington FederalNational National MedicalProvidence Mortgage Center Hospital Assoc. This survey looked at the 20 largest cities in America and focused on the top 10 private firms in each (see Table 1). The findings show that eds and meds employ nearly 550,000, or 35 percent, of the 1.6 million people who work for the top ten private employers in these cities. In fact, out of the 200 top private firms surveyed, 69 are eds or meds. On average, the eds and meds jobs in the top firm Figure 2 employment pool account for approx- Baltimore’s Top Private Employers imately 6 percent of a city’s employ- 25000 ment base (see Table 2). While these cities vary in age, region, and development pattern, they 20000 all have at least one ed or med among their top employers. Some cities have particularly large eds and meds repre- 15000 sentation, such as in Washington where over 76.7 percent of the jobs generated by the top ten private 10000 employers are with eds and meds.4 In

fact, the District’s top four firms are Number of Employees 5000 eds and meds, and they each employ more workers than the Washington Post, Bell Atlantic, and Federal 0 Johns HopkinsHelix HealthJohns System HopkinsNorthro-Grunman HealthBell System Atlantic Corp.Baltimore GasUniversity & Electric Giantof Maryland FoodSparrows Medical Point NationsSystem Bank National Mortgage Association (see Figure 1). Just over 8 percent of the city’s jobs are generated by eds and meds (see Table 2).

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Center on Urban & Metropolitan Policy August 1999 • The Brookings Institution • Survey Series 2 Figure 3 In Philadelphia, San Diego, Mem- New York City’s Top Private Employers phis, and San Jose as well, over half of 30,000 the top private employers are eds and meds. In four of the twenty largest cities—Washington, Philadelphia, San 25,000 Diego, and Baltimore—eds and meds account for more than half of the jobs 20,000 generated by the top 10 private firms.

Baltimore has more people employed 15,000 at Johns Hopkins and Helix Health System than at Baltimore Gas & Elec- tric, Giant Foods, and Nations Bank 10,000

(see Figure 2). The eds and meds jobs Number of Employees account for approximately 16.5 per- 5,000 cent of the entire city’s job base (see Table 2). 0 Chase ManhattanNYNEX Columbia UniversityCiticorp New York UniversityConsolidatedTime Edison WarnerMerrill LynchTravelers GroupBank of NY Co. While New York is internationally recognized as the center of the finance industry, two of its largest employers are eds and meds, making up nearly 20 percent of the jobs in the top 10 firms. Columbia University and New York University have more workers than recognize that their fate may be tied to See the University of Mary- some of the most well known financial the health of the community, they land’s Medical system at firms, including Merrill Lynch, Travel- invest in their neighborhoods, generat- www.umm.edu for good local ers Group and Bank of New York. ing even more beneficial effects for hiring practices. Columbia also employs more workers themselves and for their communities. than Citicorp (see Figure 3). Below are just a few of eds’ and meds’ I Research and Teaching. Uni- activities and their paybacks. versities and colleges in partic- ular can bring community to What Are the Implications? I Purchasing Power. Institu- the classroom through service tions can establish purchasing learning programs in their ot only are these firms large agreements for goods and serv- undergraduate arts and sci- job generators that con- ices with local providers, circu- ences schools, and by putting tribute to the general eco- lating wealth and supporting their professional programs nomic health of the city, other jobs within the commu- into practice such as with their Nthey are unique in that they are rooted nity. They benefit from having business schools, urban plan- to a specific place. They are essentially readily available and reliable ning programs, education immobile institutions and their iden- goods and services. MIT offers schools, and others. Polytech- tity is tied to the city and community. a good case study example. nic Institute created a univer- Yale University conducted an eco- For more information, see sity park called Metrotech to nomic assessment of its impact on web.mit.edu. implement this strategy. See New Haven and found that “Yale’s www.poly.edu/brooklyn.html strength and the health of the City, I Hiring Practices. Local job for more details. fiscally and socially, are inextricably training and placement organi- linked” (Economic Impact: Yale and zations and school-to-work pro- I Real Estate. Eds and meds New Haven, 1993). The study’s find- grams can be utilized to hire own vast tracts of land, and the ings motivated the University to com- and train the local labor force, value of that land is affected mit over $41 million to a variety of making it easy for universities when the local real estate mar- neighborhood revitalization projects and hospitals to find workers in the city. Because some eds and meds with the necessary skills. continued on next page

Center on Urban & Metropolitan Policy August 1999 • The Brookings Institution • Survey Series 3 Figure 4 ket fluctuates. When eds and Philadelphia’s Top Private Employers meds invest in their properties, put them to productive use, 30,000 and support community stabil- ity, all stakeholders benefit from increased land values and 25,000 an improved environment. For examples, see Marquette Uni- 20,000 versity’s homepage at

www.marquette.edu or Yale 15,000 University’s at www.yale.edu.

I Tax Base. Eds and meds that 10,000

help create economically viable Number of Employees communities and improve the 5,000 quality of life directly increase the local tax base. This, in 0 U. of PennsylvaniaAllegheny & U. TempleMedical & Health U. CenterThomas & System Hospital JeffersonPECO EnergyU. &CoreStates Health Co. SystemBell Financial Atlantic AramarkGroup - PA Corp.PNC Bank,Albert NA Einstein Healthcare Network turn, allows localities to rein- vest in their neighborhoods, and ultimately generate even more economic opportunities. See www.sunysb.edu for the University of New York at Stony Brook’s efforts on this.

I Homeownership. Eds and environment and support busi- University of Pennsylvania: In addi- meds can help rebuild their ness that provide goods and tion to local purchasing contracts and surrounding neighborhood by services for residents and visi- job training programs, the University giving their employees afford- tors alike. The University of has a multitude of programs that able homeownership opportu- California at Berkeley has been invest in the school’s adjacent neigh- nities there. This can be done recognized for similar activi- borhoods. For one, Penn works with through the purchase, rehabili- ties. See www.berkeley.edu. local organizations to support pro- tation, and resale of adjacent grams that promote cleanliness and homes or through subsidies for public safety. For example, the Uni- local home purchases. Home- Building the Institution versity might contribute public trash ownership is a proven strategy and the Community: receptacles and light posts along for improving the neighbor- A Profile of Philadelphia neighborhood retail nodes. This is hood quality of life. See Trinity complemented with a homeownership College’s website at www.trin- pproximately 70 percent of initiative that includes the purchase, coll.edu for more information the jobs generated by rehabilitation, and resale of dilapi- on such practices. Philadelphia’s largest private dated homes. Homeownership incen- employers are in the ed and tives are also provided for faculty and I Good Neighbor. Helping keep Amed sectors. The University of Penn- staff. In addition to housing, the uni- the community clean, safe, and sylvania and its medical center, and versity has funded mixed-use develop- economically viable creates a Drexel University’s Graduate Hospital ments in the neighborhood, including positive environment for resi- are the two largest private employers a new hotel and retail. All of these dents, students, patients and in the city. In fact, the first, second, efforts are shored up by a newly estab- workers. Universities and hos- third, fourth and tenth largest employ- lished business association that the pitals can support their local ers in Philadelphia are eds or meds school helped organize. neighborhood organizations in (see Figure 4). their efforts to maintain a good continued on next page

Center on Urban & Metropolitan Policy August 1999 • The Brookings Institution • Survey Series 4 The impact of such investments is Graduate Hospital: Over the past eight years. To help maintain the substantial. On average, the univer- three years, Graduate Hospital has area’s new homes, the hospital pro- sity spends over $2 billion a year on been part of two mergers. In 1996, vided an annual donation of $80,000 purchasing contracts for goods and it was made part of the Allegheny to a neighborhood association to hire a services. Penn’s spending in West University Hospital System and in full-time worker who organizes jobless Philadelphia quadrupled from $10 1998 it was acquired by Tenet Health- residents to keep the area clean and million in 1993 to $42 million in care corporation. Despite these safe. In the last few years, Graduate 1998. More than three-quarters of changes in ownership, the hospital has Hospital has expanded its program by the university’s construction con- retained its community redevelopment including plans to revitalize the South tracts in 1997 went to local busi- program and stepped up its partner- Street commercial corridor, renovate nesses that employed city residents. ship with local organizations. Part of affordable homes and a nearby school, The new retail and commercial activ- its redevelopment program includes and facilitate homeownership in the ity alone is creating nearly 400 new the rehabilitation of derelict row- area. See www.graduatehospital.com construction jobs and 4,250 long- houses in the neighborhood. Between for additional information. term jobs. More information can be 20 to 50 homes are reconstructed found at www.upenn.edu. each year and have been for the past

Table 1: Share of Eds and Meds Employment in Top Ten Firms

City Number of Eds Total Number Number Percent Of Eds and Meds of Jobs of Jobs and Meds Jobs Among Largest In Largest in Higher Eds in Top 10 Firms 10 Firms 10 Firms and Meds Washington, DC 6 55,243 42,395 76.7 Philadelphia 5 86,530 60,549 70.0 San Diego 5 68,639 41,841 61.0 Baltimore 4 84,928 48,532 57.1 Detroit 4 63,780 31,529 49.4 Milwaukee 3 62,288 28,085 45.1 San Francisco 4 57,817 25,101 43.4 Memphis 6 56,799 24,199 42.6 Indianapolis 4 61,760 26,250 42.5 Columbus 3 78,050 30,299 38.8 San Jose 5 29,827 10,595 35.5 San Antonio 4 58,666 18,794 32.0 Dallas 3 89,357 28,008 31.3 El Paso 3 23,462 6,859 29.2 Los Angeles 2 130,711 30,753 23.5 New York City 2 148,391 28,973 19.5 Houston 2 107,385 18,557 17.3 Chicago 2 183,219 31,315 17.1 Jacksonville 1 55,302 7,400 13.4 Phoenix 1 172,570 11,786 13.1 TOTAL 69 1,592,197 551,820 34.7

Center on Urban & Metropolitan Policy August 1999 • The Brookings Institution • Survey Series 5 Table 2: Share of Eds and Meds Employment Sources and Methodology in Total City Employment

here is no national clearing- house where employment City Number Number Percent data is collected and stored. of Jobs of Eds of 10 Firms’ As a result, obtaining the in city, and Meds Jobs Eds and Meds Temployment figures for the top 20 1995* in 10 Largest Jobs in City cities was difficult and involved multi- Firms ple sources. In the course of the study, Baltimore 294,757 48,532 16.47 virtually all public and private sources Detroit 266,148 31,529 11.85 that house or report employment Philadelphia 593,603 60,549 10.20 information—chambers of commerce, Milwaukee 282,587 28,085 9.94 local and area business journals, eco- Columbus 354,153 30,299 8.56 nomic development agencies, newspa- San Diego 500,414 41,841 8.36 pers, websites, municipal and Washington, DC 524,735 42,395 8.08 university libraries, individual firms, Memphis 338,720 24,199 7.14 colleges and universities, mayor’s Indianapolis 475,535 26,250 5.52 offices, and others—were tapped. As a San Francisco 484,349 25,101 5.18 baseline for comparison, general data San Antonio 429,136 18,794 4.38 from the U.S. Census was also used. El Paso 178,039 6,859 3.85 This data collection was completed in Dallas 746,846 28,008 3.75 June of 1998. San Jose 290,271 10,595 3.65 Chicago 1,179,610 31,315 2.65 Jacksonville 348,395 7,400 2.12 For More Information: Los Angeles 1,492,377 30,753 2.06 Ira Harkavy Phoenix 669,120 11,786 1.76 The University of Pennsylvania Houston 1,167,030 18,557 1.59 Center for Community Partnerships New York 2,916,660 28,973 0.99 133 South 36th Street, Suite 519 Philadelphia, PA 19104-3246 TOTAL 13,532,485 551,820 5.91 Phone: 215-898-5351 (average) Fax: 215-573-2799 *Source: Edward Hill, Cleveland State University, forthcoming paper. [email protected] Harmon Zuckerman The University of Pennsylvania Center for Community Partnerships 133 South 36th Street, Suite 519 Philadelphia, PA 19104-3246 Endnotes Phone: 215-543-1793 Fax: 215-573-2799 [email protected] 1 The University of Pennsylvania Cen- 4 The private sector represents a rela- Dao Nguyen ter for Community Partnerships tively small portion of Washington’s Center on Urban and employment base. So, while eds and Metropolitan Policy 2 Publicly supported institutions are meds show a high employment rate The Brookings Institution 1775 Massachusetts Avenue, NW also included in this definition. in the city, the figures are relative to Washington, DC 20036 other private sector employers, and Phone: 202-797-6143 3 While universities are rooted to only represents a fairly small fraction Fax: 202-797-2965 [email protected] place, massive shifts in the health of the overall employment in the care industry are changing the way District. For General Information: Brookings Center on Urban health services are being delivered, & Metropolitan Policy and in some cases forcing urban Phone: (202) 797-6139 hospitals to downsize and relocate. Website: www.brook.edu It remains unclear what the impact of these shifts will mean for cities.

Center on Urban & Metropolitan Policy August 1999 • The Brookings Institution • Survey Series 6