Bloomberg News

Washington Joins Energy-Rich States That Boomed Amid Bust

December 06, 2012

Median household incomes have fallen in more than two-thirds of U.S. counties since 1999, with few areas emerging unscathed from the lost decade except those where energy is produced or government contracts awarded.

Figures released today by the Census Bureau highlight the geographic scope of the worst slump since the Great Depression. Even in counties where earnings increased, typical households in most of them made less than the $52,762 national median income figure, according to data from the census’s 2007-11 American Community Survey analyzed by Bloomberg.

“Employment has picked up over the last couple of years; people are getting jobs,” said Edward Wolff, a New York University economics professor. “The real issue is the jobs they’re getting and how much those jobs pay. It’s pretty dismal.”

It’s not all dismal. Thirty-eight of the 50 counties with the highest-percentage income growth during the decade were in the energy-rich states of the Dakotas, Texas, Colorado, Wyoming and Oklahoma. Slope County, North Dakota, registered a 69.6 percent median household income jump to $55,625.

North Dakota was boosted by the largest domestic oil find since the 1968 Prudhoe Bay discovery in Alaska. The state’s jobless rate has fallen to 3.1 percent, thousands of oilfield workers are living in temporary camps or motels, and McDonald’s restaurants resorted to offering $300 signing bonuses to new employees. Forty-four of the state (STOND1:US)’s 53 counties had increases in median household incomes since 1999, census figures show.

Capital Wealth

A growing number of high-end enclaves have sprouted around the nation’s capital, too, courtesy of the $144 billion the federal government spent in Virginia, Maryland and the District of Columbia during the 2012 fiscal year, according to the White House budget office. That includes $88 billion in contracts with private companies.

Median household incomes in Falls Church, Virginia, rose 20.8 percent to $120,332 since 1999, the last year that comparable figures were available. Arlington County incomes increased 18.9 percent to $99,651. In Loudoun County, a fast- growing northern Virginia exurb, incomes climbed 12 percent to $120,096.

Still, nationwide, inflation-adjusted median household fell 5.5 percent since 1999, the Census Bureau said, a result of the dot-com bust, two recessions, two wars, and then the collapse of the housing market and auto industry.

Automotive Fallout

In Livingston County, Michigan, a Detroit exurb tied to the automotive industry, inflation-adjusted income fell 20 percent to $71,694. Inflation-adjusted median household income in Livingston, a predominantly white county about halfway between Detroit and Lansing, was $89,642 in 1999, the 24th highest in the nation at the time, according to the Census Bureau.

Income dropped 8.3 percent to $101,193 in Douglas County, Colorado, one of the fastest-growing areas in the U.S. It plunged 26.6 percent to $21,798 in Noxubee County, Mississippi, already among the poorest places on the map. Even wealthy Fairfield County, Connecticut, lost 4.9 percent.

Michigan counties accounted for a dozen of the 50 hardest- hit places for income loss during the decade, according to the data. Oakland County, adjacent to Livingston, saw a 19.3 percent drop to $66,456 in median household income. Incomes in Macomb County fell 21.9 percent to $54,087.

Detroit’s Blues

Households in Wayne County, which includes downtown Detroit, lost almost as much of their income as their neighbors. As the city’s population shrank 25 percent during the decade, households in Wayne County lost 22.8 percent of their incomes, falling to a median of $41,886.

The state’s fortunes were built largely on the auto industry, and the bankruptcies of General Motors Co. (GM:US) and Chrysler Group LLC were responsible for 230,000 lost jobs in 2009 alone, according to a University of Michigan study. Since employment peaked in April 2000, the state has lost 718,400 jobs.

“The auto industry was doing great, and Michigan was doing great,” said Donald Grimes, senior research specialist at the University of Michigan’s Institute for Research on Labor, Employment, and the Economy. “But our world turned upside- down.”

The decade’s economic misery wasn’t confined to places relying on the auto industry. Median household incomes fell 25.6 percent to $33,533 in Rabun County, Georgia, the location for much of the 1972 film “Deliverance.” The area has seen a decline in textile manufacturing.

Death Valley

Losses extended West to Esmeralda County, Nevada, where median household incomes fell 33.3 percent to $29,438. One in 12 people in the county, which includes part of Death Valley National Park, have suffered from major depression, according to U.S. Department of Health and Human Services figures analyzed by Bloomberg.

Sun Belt cities weren’t immune. Incomes fell 16.8 percent in Mecklenburg County, North Carolina, to $55,994, driven in part by the decline of the banking and construction industries. The county includes Charlotte.

Households in Travis County, Texas, which includes Austin, lost 10.8 percent of income to $55,452, largely because of the burst of the housing and technology bubbles. In Santa Clara, California, home to Apple Inc. (AAPL:US), incomes declined 9.9 percent to $89,064.

“We got hit hard by this recession,” said John Connaughton, a financial economics professor at the University of North Carolina-Charlotte. “But it gets even better with the fiscal cliff,” he said, referring to the more than $600 billion in federal tax increases and automatic spending cuts scheduled to begin in January. “Just wait three weeks, and we’re going to really start having fun.”

To contact the reporter on this story: Frank Bass in New York at fbass1@bloomberg.

To contact the editors responsible for this story: Mark McQuillan in Washington at mmcquillan@bloomberg.net; Flynn McRoberts in Chicago at fmcroberts1@bloomberg.net.


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