Since WWII the American population has grown by about 2.5 million people a year, but despite the healthy increase in the general population some cities are facing major population declines. Some people are trading the city life for the suburbs. According to a story by USA Today, more African Americans are heading to the suburbs; recent immigrants are also moving straight to the suburbs. America's recent recession and current economic problems have slowed urban development. Although many cities across America have experienced an urban decline, there are four cities where the population decreases have been the most severe.

SEE: Demographic Trends And The Implications For Investment

The automotive industry often experiences ebbs and flows, and Detroit has taken much of the brunt. For 30 years, from 1920 to 1950, it was the fourth largest city in America. Now its population is smaller than Jacksonville, Fla. Overall, Detroit's population is down 25% over the last decade. According to a New York Times article, Detroit's population is the lowest it's been since 1910 and it's the only city where the population has gone above 1 million and then fallen below 1 million.

SEE: The Industry Handbook: Automobiles

Flint, Mich.
Another city hit hard by the auto industry is Flint, Mich. The city has experienced at least a 10% decrease in population each year since the 1980s when the American auto industry began its decline. According to an article by 24/7 Wall Street, the city received money from the federal Neighborhood Stabilization Program to demolish abandoned houses because of the amount of neighborhoods with empty homes. The vacancy rate for housing in the city is over 22%. Based on the statistics, the city's population outcome doesn't seem to be changing.

Once the headquarters of John D. Rockefeller's Standard Oil Company, Cleveland's population is a far cry from what it was in its heyday. Many of the large companies that once fueled the city, like Peerless and Winton, simply don't exist anymore. The city used to be a hub for trade and manufacturing, but America's overall industrial decline has had a hugely negative impact on the city. Today, Cleveland has a population half the size it had in 1948.

New Orleans
Out of all the cities that have experienced population decline, none have a sadder story than New Orleans. Hurricane Katrina covered 80% of the city with flooding and left many homes vacant. Then the Great Recession hit America on top of that. According to the Daily Beast, New Orleans had a 26.8% decrease in population from 2000 to 2009. Devastated homes, crime, poverty and America's economic downturn have made it difficult for New Orleans to bounce back. Recently, the city has attracted entrepreneurs who are looking to start new businesses in the city and invest big dollars.

SEE: Do You Need Casualty Insurance?

The Bottom Line
One of the problems with the decline in city populations isn't just that there aren't enough people, it's that property values begin to fall and tax revenues drop when people move away. Cities are left with underfunded police and fire departments and public services suffer from the lack of resources. Abandoned neighborhoods contribute to more crime and drive down housing values.
Some cities see manufacturing jobs dwindle away because of lack of product demand, others slowly fade out because new ways of shipping, trading or producing are created. No matter what the reason for the decline in some American city populations, the country's overall economic instability is a contributing factor.

Related Articles
  1. Economics

    A History Of U.S. Monopolies

    Here are a few of the most notorious monopolies in U.S. history.
  2. Taxes

    Don't Miss These Tax Deductions

    Knowing the tax deductions you're entitled to can make or break your bank account. Do you know about all these insurance-related deductions?
  3. Entrepreneurship

    Creating a Risk Management Plan for Your Small Business

    Learn how a complete risk management plan can minimize or eliminate your financial exposure through insurance and prevention solutions.
  4. Entrepreneurship

    Identifying And Managing Business Risks

    There are a lot of risks associated with running a business, but there are an equal number of ways to prepare for and manage them.
  5. Home & Auto

    Make This The Year You Get Vacation Insurance

    With a few simple policy additions you can protect your holiday plans from being ruined.
  6. Home & Auto

    How To Choose The Right Bond For You

    Bond investing is a stable and low-risk way to diversify a portfolio. However, knowing which types of bonds are right for you is not always easy.
  7. Personal Finance

    Insure Your Future with a Career as an Actuary

    If you've got excellent math skills, they can add up to a lucrative career as an actuary.
  8. Personal Finance

    How To Avoid Getting Sued On Halloween

    Halloween can actually be a very dangerous holiday; learn about the pitfalls and legal liabilities.
  9. Stock Analysis

    Why Did Tokio Marine Buy HCC Holdings for $7.5 Billion? (TKOMY, HCC)

    Learn about the main reasons Tokio Marine paid $7.5 billion for HCC Holdings, including the strength of the company and a declining Japanese population.
  10. Investing Basics

    Understanding Brokerage Fees

    Agents charge brokerage fees for facilitating transactions between buyers and sellers.
  1. What is the usual profit margin for a company in the insurance sector?

    The best estimates of the average insurance company net profit margin are between 3 and 8%, with a likely median average ... Read Full Answer >>
  2. How does an insurance broker make money?

    An insurance broker makes money off commissions from selling insurance to individuals or businesses. Most commissions are ... Read Full Answer >>
  3. What impact have terrorist attacks had on the insurance industry?

    Terrorism has led to massive losses for the insurance industry. The attacks on Sept. 11, 2001 totaled $31.6 billion in costs ... Read Full Answer >>
  4. Why some insurance policies are more expensive than others?

    There are several reasons that an insurance policy can cost more or less at different agencies. Some of the more common reasons ... Read Full Answer >>
  5. Why should I keep track of my insurance policy?

    The number one thing to remember about insurance is that, just like everything else, it changes over time. The top-of-the-line ... Read Full Answer >>
  6. Should I be worried about my insurance company?

    Yes, policyholders should always take a serious look at the financial stability of their current insurance company especially ... Read Full Answer >>
Hot Definitions
  1. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  2. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  3. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  4. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  5. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  6. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
Trading Center