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.
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.
> Personal income growth (2013-2014): 4.3%
> Per capita personal income: 45,385
> May unemployment rate: 3.7%
> Employment growth: 3.5%
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.