In any American city — on this list or not — declines in overall wages or employment in a single industry can have far reaching economic implications. The effects can be especially profound when a suffering industry is the backbone of the local economy.
The United States is the world’s largest oil producer, churning out an average of 14.5 million barrels per day. When oil prices plummeted in 2014 and 2015, reaching their lowest level in over a decade in 2016, dozens of American cities felt the pinch — and many of them are on this list.
In over half of the cities where income per capita fell the most in 2016, the concentration of workers employed in mining or oil and gas extraction is more than double the concentration nationwide. And in each of those metro areas, the oil and gas extraction sector reported considerable employment and wage declines from 2015 to 2016.
In Casper, Wyoming, for example, employment in mining, quarrying, and oil and gas extraction fell by 40.1%, and industry wages fell by 46.8% from 2015 to 2016. Partially as a result, income per capita in the metro area fell by 5.3% in 2016.
For many of the cities on this list in Louisiana, Texas, and Wyoming, where falling per capita income is attributable to declines in the oil and gas industry, the decline has had serious implications for large shares of residents. For example, SNAP benefit recipiency increased in nine of the 14 metro areas with relatively large oil and gas extraction industries in 2016.
Encouragingly, oil prices have rebounded since 2016, and unemployment rates in many of the same cities have declined through 2017 and 2018. Whether or not climbing oil prices and improved unemployment translates to higher per capita income in these areas remains to be seen.
Another common explanation for falling per capita income in the cities on this list is rapid population growth — particularly among Florida metro areas. Five metro areas on this list are located in the Sunshine State, and each of them reported population growth more than double the 0.5% national population growth from 2015 to 2016 — and in some cases eight times the national growth rate.
Even though most of these cities reported positive overall income growth, population growth was enough in these places to outpace climbing total personal income. Indeed, older, likely retired populations accounted for much of that growth. In four of the five Florida metro areas on this list, the 65 and older population grew faster than the 4.7% growth rate in 2016 for the cohort nationwide.
In places like these, the falling income per capita does not necessarily mean residents are worse off financially than in years past. To be sure, the poverty rate declined in four of the five Florida metro areas on this list in 2016.
To identify the cities where incomes are shrinking the fastest, 24/7 Wall St. reviewed the largest real personal income per capita declines in 2016 among the nation’s 382 metropolitan statistical areas with data from the Bureau of Economic Analysis. Real personal income also came from the BEA. The BEA’s income figures for each year starting in 2008 were reviewed as well, all adjusted for inflation, chained to 2009 dollars. The share of each MSA’s workforce employed in each industry in 2015, 2016, and 2017 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. Unemployment rates also came from the BLS. Population growth, median household income, poverty rates, the percentage of households earning at least $200,000 and less than $10,000, and SNAP recipiency came from the American Community Survey.
Sponsored: Find a Qualified Financial Advisor
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.