The U.S. population grew by 0.7% in 2016, in line with the 2015 growth rate. In nine of the cities where incomes declined, population growth last year trailed the national growth. Six of these cities reported population declines. In all but one of the 10 metro areas with rising incomes, on the other hand, population growth outpaced the nation’s.
Income growth is also strongly associated with economic expansion. Often, activity within a particular industry accounted for the bulk of the changes in total income generated in the area. The economies of all but three of the top 10 metro areas for income growth expanded faster than the nation’s 2015 GDP growth of 2.5%. With the exception of Midland, Texas, the opposite was true in the 10 metro areas with the fastest declining incomes.
The industries that contributed most to changes in GDP varied considerably. The durable goods manufacturing industry was a drag on economic growth in nine of the 10 cities with shrinking incomes. Data was not available for the one exception. Natural resources and mining industries had relatively strong contributions to economic growth in three of the 10 metro areas, but GDP growth overall was below the national growth rate in these cases. The sector was a drag in two of the 10 cities with declining incomes.
To be sure, strong income growth is a good sign of the financial health of an area’s residents, just as a decline in personal income is generally a bad sign. However, strong income growth
in an area does not necessarily mean incomes are very high, and income declines are actually relatively common in areas with high incomes. Per capita income in 2015 exceeded the national income figure of $43,925 in only three of the 10 cities with the fastest growing incomes. By contrast, income per capita was higher than average in six of the 10 cities with shrinking incomes.
Most of these income declines are relatively recent. Only two of the metro areas reported personal income declines between 2010 and 2015. Income growth over that period in four of the 10 cities actually remains among the top 10 in the nation. On the other hand, in the cities where incomes grew fastest in 2015 the growth was generally reflective of consistent income growth over a longer period.
To identify the cities where incomes are growing (and shrinking) the fastest, 24/7 Wall St. reviewed the highest and lowest real personal income growth rates in 2015 among the nation’s 381 metropolitan statistical areas from the Bureau of Economic Analysis. Real personal income, per capita income, GDP, and industry contributions to GDP growth in each MSA also came from the BEA. The BEA’s income figures for each year starting in 2010 were reviewed as well, all adjusted for inflation, chained to 2009 dollars. The share of each MSA’s workforce employed in each area’s industry in 2014 and 2015, as well as average wages by industry for each MSA, came from the Quarterly Census of Employment and Wages, a program of the Bureau of Labor Statistics. Population growth, median household income, poverty rates, the percentage of households earning at least $200,000 and less than $10,000, and educational attainment rates also came from the American Community Survey. May unemployment rates came from the U.S. Bureau of Labor Statistics.
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