Des Moines had the fifth-steepest decline in the Milken Institute’s Best-Performing Cities list, in part because of slow wage growth in high-tech industries, an author of the report said.

The report, “Best-Performing Cities 2021: Foundation for Growth and Recovery,” shows that Des Moines fell 54 spots from 79 in 2020 to 133 this year in the large city category for metropolitan areas with populations at or above 270,000.

“I think the key question for Des Moines is the quality and the wage of the jobs that are being created, and what do they pay, and if they’re not where we want them to be, how do we get there?” said Misael Galdamez, one of authors of the report from the nonpartisan think tank and its Center for Regional Economics.

The Provo-Orem, Utah, region ranked as the No. 1 best-performing large city in 2021, while Idaho Falls, Idaho, was the No. 1 best-performing small city for those metropolitan areas of fewer than 270,000 people, according to the report.

The report looks at growth in wages and jobs from 2014 to 2019, and a one-year measure of job growth from 2018 to 2019. It also measures short-term job growth with the most recent year of data, which was from October 2019 to October 2020 and captures some of the effects of the coronavirus pandemic.

Galdamez said the Milken Institute looks at gross domestic product growth in 20 high-tech industries in determining the rankings for best performing cities.

“We believe … jobs in these 20 high-tech industries are more likely to provide a meaningful, substantive wage, and also foster greater job creation overall in the economy,” he said.

Des Moines ranked above the national average in job growth, placing 93rd out of 200 large cities included in the survey. Last year, it ranked 77th. But it came in near the bottom of the rankings in wage growth, Galdamez said.

“One of the challenges is wage growth in the region, and if you look at the index rankings for Des Moines … it ranked 193rd this year, and that’s particularly challenging to its placement on the index because that’s one of the more heavily weighted indicators,” Galdamez said. “So it’s true there’s that job creation that’s going on, but the question is, are the wages of those jobs being created quality wages?”

According to data provided by the Milken Institute, wages paid in 2014 in the Des Moines metro were about $17.76 billion. That increased to about $18.7 billion in 2015, $19.5 billion in 2016, $20.4 billion in 2017, about $21.2 billion in 2018 and about $21.5 billion in 2019.

For the corresponding years, nonfarm employment was 323,000 in 2014, 349,000 in 2015, 359,000 in 2016, 365,000 in 2017; 370,000 in 2018 and 373,000 in 2019.

Doing the math, the average wages paid in the Des Moines area were about $51,700 in 2014; $53,600 in 2015, $54,200 in 2016, $55,700 in 2017, $57,200 in 2018 and about $57,800 in 2019, according to data from the Milken Institute.

For the report, the Des Moines metro area includes Polk, Dallas, Warren, Madison, Guthrie and Jasper counties.

New elements added this year include household access to high-speed internet and household affordability over the same five year periods, Galdemez said.

He said Des Moines ranked below average — 116 out of 200 — for broadband access, but that’s not as strong a factor as wage and job growth in the index. The Des Moines area also ranks in the bottom half in the high-tech industry indicators.

“For our methodology, Des Moines has only one, which is commercial and service industry and machinery manufacturing,” Galdamez said. “Des Moines doesn’t have a particular high-tech industry or cluster that is either leading or helping to produce growth around it.”

Data processing is close, but not quite to the level of being considered a cluster, according to the methodology used in the report, he said.

Galdamez said Des Moines ranks high in some categories, such as housing affordability, where it ranked 20th in the one-year indicator and 18th in the five-year indicator.

“That’s a great bright spot for Des Moines,” he said.

He also said data showed professional and business services, construction and real estate were strong in the past decade.

“To me that tells a story that there’s population growth in Des Moines, people are moving to Des Moines and that a lot of that recent growth has been demand-driven,” Galdamez said.

He said although there has been some growth in some industries, such as construction, that growth has been flat in the past few years.

“So that starts to ask the question, what is next, what industries are going to produce that sustained lasting growth?” Galdamez said. “What are the assets Des Moines has, population being one of them, that it can capitalize on to create that sustained growth?”

Additional challenges the region faces are the loss of about 2,500 jobs in information technology, and the loss of about 1,000 jobs in financial activities from 2018 to 2019, he said.

“Des Moines, priding itself in being that financial hub and a hub in professional services, those are both challenges that Des Moines will have to think about very critically,” Galdamez said.

Jay Byers, president and CEO of the Greater Des Moines Partnership, said there are “a number ofrecent data points that show Greater Des Moines’ economy is in a good position and poised for strong growth in economic recovery.”

“As a region, we are investing in major placemaking projects, supporting further building out of broadband infrastructure, cultivating an environment where major tech companies as well as agtech, insurtech and other startups can thrive, and doing it all with a focus on diversity, equity and inclusion to ensure this is a welcoming community for people of all backgrounds,” Byers said in a statement responding to the Milken report.

Galdamez said the report is about developing and diversifying a quality job base, and not that things are necessarily bleak for any particular region.

“Sometimes cities take the index and think it paints an ugly portrait of them, but really it’s meant to be an opportunity for self-reflection and continue growing and have sustained growth,” he said. “It really is a long-term gain, not a short-term question.”

Davenport came in at No. 179 on the big city list, down seven spots from 2020, and Omaha was No. 102, up from 127 last year.

On the small city list, Sioux Falls, S.D., ranked No. 7 (up from 24 in 2020), Sioux City was ranked No. 79 (up from 122), Ames was No. 109 (down from 55), Dubuque was No. 121 (down from 120), Iowa City was No. 150 (down from 160) and Waterloo was ranked 183 (down from 162).