Cities where incomes are booming the most
The American workforce earned 2.9% more income in 2014 than in the previous year. As the American economy continues to recover from the Great Recession, more people are able to find jobs. While total income has been rising nationwide, income did not rise uniformly across the country in 2014. In some U.S. metro areas, total income even declined.
To identify the metropolitan areas where total personal income rose or declined the fastest in 2014, 24/7 Wall St. reviewed recently released data from the Bureau of Economic Analysis. Odessa, Texas led the nation with an 8.1% increase in total income, while total income in Danville, Illinois fell by 3.9%, the largest drop of any metro area.
These are the cities where income is growing the fastest.
1. Odessa, Texas
> Personal income growth (2013-2014): 8.1%
> Per capita personal income: $44,859
> May unemployment rate: 6.4%
> Employment chg.: 6.1%
Odessa leads the nation in total personal income growth. As is often the case in places with booming incomes, Odessa’s population — and workforce — has been growing in recent years. The number of employed people in the city grew by 6.1% in 2014, the fifth fastest employment growth rate of any metro area. The traditionally high paying finance sector added 2,377 jobs to the income pool in 2014, increasing by 124.1%.
The income rise likely explains at least in part the area’s relatively low — and declining — poverty rate. The metro area’s poverty rate fell from 14.6% in 2013 to 10.0% in 2014, one of the largest such improvements in the country.
2. Hanford-Corcoran, Calif.
> Personal income growth (2013-2014): 7.0%
> Per capita personal income: $32,102
> May unemployment rate: 9.4%
> Employment chg.: 1.6%
Total personal income in the Hanford-Corcoran metro area increased by 7.0% in 2014, trailing just Odessa for the largest income growth in the country. Per capita income also grew substantially, from $29,875 in 2013 to $32,102 in 2014, a nation-leading 7.5% per capita income growth.
The information sector was one of the largest drivers of employment growth in the area. Employment in the sector more than doubled in 2014, a faster pace than the 23.0% nationwide industry employment growth rate over the same period. Employment in the finance and insurance industry, which tends to provide relatively high paying jobs, also grew considerably faster than the nationwide growth rate, at 43.6% versus 0.5% nationally.
3. Midland, Texas
> Personal income growth (2013-2014): 7.0%
> Per capita personal income: $87,929
> May unemployment rate: 4.4%
> Employment chg.: 7.5%
Income growth in an area does not necessarily mean residents are well-off financially. However, Midland residents earn some of the highest incomes in the country. The area’s per capita income of $87,929 in 2014 was up considerably from 2013 and the highest of any U.S. metro area. The city’s employment grew by 7.5% in 2014, the second fastest growth rate in the country. The agriculture, forestry, fishing, hunting, and mining sector was one of the largest drivers of employment growth in the area. Employment in the sector grew by 24.7% in 2014, more than the 2.8% nationwide industry employment growth rate over the same period.
Midland’s unemployment rate fell from 3.6% in 2013 to 2.9% in 2014, one of the larger improvements in the country.
4. Myrtle Beach-Conway-North Myrtle Beach, S.C.-N.C.
> Personal income growth (2013-2014): 6.0%
> Per capita personal income: $33,243
> May unemployment rate: 6.0%
> Employment chg.: 2.2%
Income in the Myrtle Beach-Conway-North Myrtle Beach metro area grew at a 6.0% pace in 2014, the fourth fastest growth rate nationwide. The generally higher-paying professional, scientific, and management, and administrative and waste management services sector was one of the largest drivers of employment growth in the area. Employment in the sector grew by 43.4% in 2014, more than the 9.8% nationwide industry employment growth rate over the same period.
5. Salem, Oregon
> Personal income growth (2013-2014): 5.8%
> Per capita personal income: $34,113
> May unemployment rate: 4.8%
> Employment chg.: 3.7%
While Salem residents are not especially wealthy, total personal income in the area increased by 5.8% in 2014, trailing only four other metros in income growth. Employment growth of 3.7% — well above the national employment level growth of 1.9% — largely accounts for the income added. While several industries shed jobs, employment increased at above average rates in the information, wholesale trade, and educational and health services sectors, more than offsetting the other sectors’ lost jobs.
See other cities where income if booming, and places where it's declining:
More on cities where income is booming (or not)
Total personal income is income earned by an area’s workforce. In many cities, therefore, a growing workforce was likely the primary reason for the rise in total income. A metropolitan area that had a greater number of salaried workers in 2014 compared to 2013 was far more likely to report higher total income than the year before. In 19 of the 25 cities where total income rose the most, the workforce grew at a faster pace than the national workforce.
Similarly, all of the 25 metro areas where income grew slowly or declined had below-average or declining employment levels.
Nationwide, the industries that added the most employees to the income pool were the educational, health, and social services sector, the arts and entertainment sector, the professional and scientific sector, as well as the construction sector. In many cities where total income grew the fastest, these industries were largely responsible for the area’s employment growth.
While wages do not need to rise for the total income earned in a metropolitan area to increase, rising salaries were partially responsible for income growth in many cities. Personal income per capita increased at a faster pace than the national per capita income in all but one of the 25 cities with the fastest aggregate income growth. Per capita wages often increase when jobs are added in sectors that tend to pay more, such as the professional and scientific, information, and finance sectors. Metropolitan areas that add jobs in traditionally low-paying industries, including the manufacturing, retail, and transportation sectors, were more likely to have slower per capita income growth, or even declines.
Rising wages and a growing workforce are usually indications of economic prosperity, and certainly can be expected to lead to better outcomes down the road. However, the metro areas with rising total income include both strong economies with low unemployment, as well as weak economies with high jobless rates. Similarly, in close to half of the areas with above-average income, poverty was higher than the national rate.
To identify the cities where total personal income is rising the fastest, or is either rising the slowest or is declining, 24/7 Wall st. reviewed real personal income growth in 2014 for the nation’s 381 metropolitan statistical areas from the Bureau of Economic Analysis. Real personal income and per capita income also came from the BEA. The share of an MSA’s workforce employed by a given industry came from the U.S. Census Bureau’s 2014 American Community Survey. Population growth, median household income, poverty rates, and homeownership rates also came from the U.S. Census Bureau’s 2014 American Community Survey. Unemployment rates came from the BLS. All data are for 2013 and 2014 unless otherwise specified.
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