Times are no doubt tough, but the brokest city in America?
That’s the label slapped on Columbus by a story and photo gallery Tuesday in the online publication The Daily Beast. Criteria used were the unemployment rate, median household income and average personal debt to determine the nation’s Top 30 cities with financially struggling residents.
Columbus was No. 1 on the inauspicious list, joined by three other Georgia cities -- Augusta at 10, Macon at 14 and Savannah at 25. In Alabama, Mobile was 7, Montgomery was 19 and Birmingham was 23.
“If this data is any indication, the cities struggling the most right now -- the ones that may take the longest to recover -- are clustered in the South and along the Pacific Coast,” said The Daily Beast report, which featured a gallery of photos from each community. For Columbus, it was what appeared to be a nightclub with the words, “NO LOITERING DRUGS WEAPONS,” painted on the front.
The Daily Beast, founded in 2008 and known for its breaking national news articles and opinion pieces, did not respond to a media request sent via email through its press room.
But the “America’s Brokest Cities” feature apparently did the trick, drawing the attention and ire of Columbus Mayor Teresa Tomlinson, while leaving residents and economic experts scratching their heads.
The mayor, in an email response, called the online feature “patently absurd” and “irresponsible,” attacking what she called “incorrect” data and analysis. She cited U.S. Bureau of Labor Statistics showing a 2.6 percent job creation rate for Columbus over the last two years, compared with a national growth rate of 1.2 percent.
“The bottom line is that this Daily Beast article is irresponsible and has no bearing on the real economic circumstances in Columbus, Ga.,” Tomlinson said.
“Like most cities in America, we strive each day to create more economic parity and more economic opportunities for our citizens,” she said. “Columbus is an economic bright spot in the state and the Southeast, and we will continue to work to be a magnet for new investment and job growth.”
To achieve the “brokest city” designation, The Daily Beast cited the 9.8 percent unemployment rate for the Columbus metro area in August (later revised to 9.7 percent). It tossed in a median household income figure of $36,553, then mixed in an average personal debt statistic of $27,928. It threw in the average credit score of 721 for local residents just for good measure, although The Daily Beast said it did not count the scores in its rankings.
Credit monitoring agency Experian supplied the debt and credit information, it confirmed Tuesday, with the data coming from its recent “State of Credit” report.
“I should put it into context that sometimes can be confusing,” said Sandra Shagat, responding to comments about Experian’s role in the rankings. “This is using the VantageScore range, which runs between 501 and 990. There are a number of different scoring models. We want to call particular attention to the fact that we are using that model and that range.”
Using that formula, the average credit score for U.S. residents is 749, which would be considered a middle-of-the-pack “C” in grade-school parlance. The 721 average achieved by Columbus residents would be a lower-level C. The highest average credit score in the nation is in Wausau, Wisc., which has a 789, while the lowest is in Harlingen, Texas, at 686, considered a “D.” That city was No. 2 on the “brokest cities” list.
The types of debt included in the credit scoring, Shagat said, includes all debt excluding home mortgages -- revolving debt, such as credit and bank cards, and installment loans, like auto, personal finance, and leases.
“The average debt for Columbus of $27,928 is higher than the national average of $24,542,” Shagat wrote in a follow-up email, citing the Experian study. “The average number of late payments per account for your area is 0.54 (higher than the national average of 0.45). And consumers in your area have less of their total credit available to them: only 65.09 percent when the national average is to have 71.17 percent of credit available.”
No matter how the data was sliced, diced or crunched, it still left people who know Columbus and its economy somewhat puzzled after hearing of the rankings Tuesday.
“It’s just difficult for me to believe,” said Jeff Humphreys, an economist and director of the University of Georgia’s Selig Center for Economic Research. “It just doesn’t seem to jibe with any of the other data or analysis or information that I have. It even goes beyond just Columbus. Augusta and Savannah have done fairly well, yet they’re on the list, too.”
Humphreys said he would have to know more about the methodology used by The Daily Beast to make a more deliberate comment. Perhaps college students and military personnel from Fort Benning -- both of which can be young and have high levels of debt -- somehow skewed the statistics.
“I’ve certainly seen that in Athens with respect to some of the statistics we put out,” he said. “In some ways Athens shines and in others it looks dismal … but I just don’t know without replicating some of the analysis.”
Columbus State University business and finance professor Benjamin Blair also had a difficult time making the “brokest cities” data work. Just comparing Columbus to Harlingen, Texas, seems a stretch, he said.
“No matter what I do as far as my calculations go, I can’t get us to go worse than Harlingen,” Blair said. “We have one of the better unemployment rates overall. Looking at Harlingen, they had a 12.5 percent unemployment rate. Their income was lower, and they just had a couple of thousand dollars less debt.”
Even Rob Pitts, director of the Consumer Credit Counseling Service office in Columbus, which assists more than 3,000 residents annually, said he was somewhat surprised by the local average personal debt figure in the ranking. He would have guessed it would be around $22,000 or $23,000.
He pointed out the three pieces of data used were equally weighted and that Columbus got “dinged” for its median income. But the unemployment picture in the city is much better than many of the other cities on the list.
“In my opinion, unemployment was the most important number,” said Pitts. “You can be employed and making $20,000 a year. But if you manage your money and live within your means, you’re not broke. It’s when you’re unemployed that you’ve got problems. I thought that was a little unfair to us. There were cities on there with 14 and 15 percent unemployment rates, but they had a higher median income.”
Pitts also said the $27,000-plus debt apparently carried by the average Columbus resident is not necessarily a bad thing. Most of the other cities on the “broke” list were within $2,000 to $3,000 of each other, he noted.
“If you have the income and you budget and you can handle that debt, then you’re OK as long as you’re prepared for it,” he said. “The credit score doesn’t necessarily punish you for the amount of debt as long as you’ve demonstrated you can handle the debt.”
Nonetheless, the dubious financial rankings released Tuesday did hit some emotional chords with local residents -- particularly the less-than-flattering picture used to represent the city.
A Ledger-Enquirer Facebook reader had identified the image as a former lounge at 2102 Cusseta Road, most recently known as the Majestic Sports Bar.
Standing outside the building Tuesday, Johnny Weaver, whose father owns the property, said it was not the place pictured. He also thought the depiction of Columbus as America’s brokest city was off base.
“They need to be correct in their evaluating … and be correct about what they’re looking at, and not target one area,” he said. “Columbus has its problems. There are areas that need to be improved … but they need to look at the whole area.”
Even The Daily Beast’s own site was drawing commentary from Columbus, with a person dubbed “Georgia_Gal” wondering why the stark photo was picked by editors.
“Of all the many wonderful things we have here, you used a picture that is indicative of crime and lower class,” she wrote. “Why not the National Infantry Museum or the riverfront or our lively uptown? Columbus has a lot of wonderful things to offer, and I hope your research is as off based as I feel it is.”
Staff writers Mike Owen and Tim Chitwood contributed to this report.
