Wealth rises in USA's heartland

11 26, 2012 by USA Today

The nation's oil and gas boom is driving up income so fast in a few hundred small towns and rural areas that it's shifting prosperity to the nation's heartland, a USA TODAY analysis of government data shows.

The 261 million people who live in cities and suburbs still haven't recovered earning power lost in the economic downturn. Average income per person fell 3.5% in metropolitan areas between 2007 and 2011 after adjusting for inflation, according to data released Monday by the federal Bureau of Economic Analysis.

By contrast, small-town America is better off than before: Inflation-adjusted income is up 3.8% per person since 2007 for the 51 million in small cities, towns and rural areas.

The energy boom and strong farm prices have reversed, at least temporarily, a long-term trend of money flowing to cities. Last year, small places saw a 3% growth in income per person vs. 1.8% in urban areas.

Small-town prosperity is most noticeable in North Dakota, now the nation's No. 2 oil-producing state. Six of the top 10 counties are above the state's Bakken oil field.

"Give us a little shale, and we'll show some pretty good income growth, too," says Bill Connors, president of the Boise Metro Chamber of Commerce in neighboring Idaho.

The Boise area's rank in income per person plummeted from 139th to 251st among metro areas from 2007 to 2011, the biggest drop of any place except Las Vegas, which suffered largely because of high-tech layoffs and a real estate price collapse.

Other findings:

-- Richest. The Bridgeport-Stamford, Conn., metro area had income of $78,504 per person in 2011, making the New York suburb the most affluent place in the USA for the past decade. The oil community of Midland, Texas, was next, followed by the high-tech metro areas of San Francisco and San Jose.

-- Poorest. Three Texas metro pockets were poorest: McAllen, Brownsville and Laredo. Income per person in McAllen: $21,260. Lake Charles, La., was poorest among metro areas having 200,000 or more residents.

-- Surprising. Rochester, N.Y., moved up faster in the income rankings than any big metro area, despite suffering layoffs when hometown company Kodak went bankrupt. Rochester ranked No. 43 in income among the 102 metro areas of 500,000 or more, climbing 21 positions since 2007.

-- High-paying jobs. The oil county of Sutton, Texas, saw wages and benefits double to $115,775 per job from 2007 to 2011, BEA reports. Only New York City's Manhattan had higher-paying jobs last year.

-- Benefits. Three Kentucky counties â?? Owsley, McCreary and Wolfe â?? are the only places that rely on government programs such as Social Security, food stamps and Medicaid for more than half of income.

The BEA's data is the government's most comprehensive report on income in the nation's 3,000 counties. It includes wages, benefits and investment income, plus government programs such as Medicare, Medicaid and food stamps. The Census Bureau does not county benefits, food stamps, Medicare or Medicaid as income.