Changing Regional Fortunes

A few weeks ago, we examined the changes to the patterns of manufacturing employment and a natural follow-up is to consider the impacts on regional income. Income is particularly difficult to study over time since the geographic study areas change over time as does the meaning of the dollar itself.

In order to compare income over time, we indexed the median household income for each geographic area for 1980 and 2022, then created a ratio between the current and historical index values. The result is that we are looking at the relative shifts in income rather than the absolute income values over time.

We started with a map showing the median income for five-mile radius areas around each block group centroid. The use of radius areas acts as a spatial smoothing device that eliminates some of the noise and permits broad regional analysis:

The metropolitan area map is useful for clarification, but at the cost of understanding that relative incomes have been steadily increasing in the upper Midwest states as financial sector jobs have flocked to North and South Dakota because of state banking laws. The main patterns of income change are:

• The continued decline of income in the traditional automobile and heavy industry areas from Missouri to Pennsylvania. Detroit fell from 19^th rank in income across metro areas to 198^th and Cleveland fell from 56^th to 396^th. Other areas like Pittsburgh and Cincinnati have declined far less as other industries have taken hold.
• A surprising decline in relative income along the western gulf coast – as these areas have grown in population, the oil industry is less of a defining factor and the traditionally high wages of the sector have been diluted.
• The urbanization of many areas of the inland valleys of the western states has improved relative income from the central valley of California to the Willamette valley of Oregon.
• On the eastern side of the country, growth in income has been largely found in the growing smaller markets from Tampa through Portland Maine as many high income jobs have been moved from large, expensive metropolitan areas to smaller emerging markets.