The 5 Metro Areas Where Personal Income Is Rising Fastest
Incomes are rising nationwide -- but at a slower rate in rural America.
Metropolitan areas continue to record notably larger gains in personal income compared to more rural regions. Last year, personal incomes grew 3.8 percent within metro areas but only 2.7 percent outside them, according to new federal data.
The U.S. Bureau of Economic Analysis (BEA) recently released updated personal income estimates covering all counties and metro areas. We’ve compiled data for each metro area and adjusted it for inflation, showing changes in personal incomes over time.
Nearly all metro areas registering the steepest increases over the past three years are in the West, along with a select few other regions across the Sun Belt. Many of these areas benefitted from either a return of their tourism sector or a rebound from particularly severe job cuts during the recession.
Nationally, the Bridgeport-Stamford-Norwalk metro area in Connecticut surpassed Midland, Texas, for the highest per capita personal income -- $106,382 in 2015. Not too far behind were the San Jose and San Francisco metro areas in California.
In addition to work-related earnings, personal income data reflect income received from ownership of homes or businesses, along with transfer receipts from business or the government, but do not include capital gains or losses.
The following five metro areas recorded the top percentage increases in per capita personal income over the three-year period ending in 2015.
The Merced, Calif., metro area has experienced the top personal income growth of any region since 2012, climbing an estimated 13.7 percent when adjusted for inflation.
One big contributing factor to the region’s growth is the expansion of the University of California’s Merced campus. The school, which opened only a decade ago, continues to add students, faculty and staff.
The expansion has further supported new developments around Merced, where long-vacant downtown retail spaces have started filling up. City officials recently announced plans to renovate one building to make way for a boutique hotel, as well as construct a new mixed-use development with more than 50 apartments.
Still, with an economy tied largely to agriculture, the metro area remains poorer than most other regions in California. Personal incomes declined only slightly in 2008 and 2009, then experienced sharp growth since 2012. The per capita personal income for the metro area of 268,000 residents was $36,185 in 2015.
Weld County, Colo., has become the epicenter for the state’s latest energy boom, fueling economic growth as oil and gas companies invested significantly across the region. The area saw its real personal income grow by 13.4 percent since 2012.
Richard Werner, president of Upstate Colorado Economic Development, said the energy industry’s expansion has further led to rapid growth in other sectors, such as small manufacturing and food processing. “There’s a diversification of industry that has really spurred the increase in household income,” he said.
More recently, declining oil and gas prices hurt the energy sector. But the region isn’t experiencing the same bust cycle as the Dakotas and parts of Texas since other sectors of the economy remain strong. Last year, with the exception of energy, all other industries in Northern Colorado continued expanding. Werner said workers who lost oil and gas jobs are finding new work in industries like construction, manufacturing and food processing without needing to relocate.
As the region’s economy expanded, an influx of new residents followed; the metro area’s population increased an impressive 8 percent over the three-year period.
An expanding tech sector has spurred significant economic growth across the Provo-Orem, Utah, metro area in recent years, helping to push up per capita personal income by 12.2 percent over the past three years.
It all started when the software giant Adobe, after acquiring an existing local company, opened a new 280,000-square foot campus in 2012, according to Ryan Clark, the city of Orem’s economic development manager. Since then, other tech firms have relocated to the region, while numerous local entrepreneurs launched smaller tech startups. The Interstate 15 corridor, stretching from Salt Lake City down to Provo, now markets itself as the “Silicon Slopes.”
The financial sector there is also expanding, and some of the ski resorts might be benefiting from increased tourism as well. “Traditionally, a lot of the graduates in this area would leave the state," Clark said, "but I think more grads are sticking around now.”
The metro area took a hit during the recession, but the downturn wasn’t as severe as other parts of the country. Clark said he suspects a massive construction project started in 2010 that expanded and rebuilt several stretches of highway helped to prop up the local economy.
The region’s inflation-adjusted incomes have steadily climbed each year since 2010, reaching $34,227 last year. While that’s still well below most other regions, it’s a long way from 2010 when personal incomes dropped to around $28,000.
Like many other regions of California and the Sun Belt, the Napa Valley took a deep hit during the Great Recession. But it has since rebounded just about as well as any other region.
The metro area’s per capita personal income -- already higher than most other regions -- jumped from $54,899 in 2012 to $61,483 last year in inflation-adjusted dollars, an increase of 12 percent.
The inland areas of California experienced much sharper declines in employment and home values than the coastal parts of the state, said Sean Randolph of the Bay Area Council Economic Institute. This meant that places like the Napa Valley had a deeper hole to climb out of, reflected in the region’s recent growth.
Wineries, hotels and other businesses in the Napa Valley benefitted from an improved tourism sector. Those with second homes in the area or others with more expendable incomes also helped to prop up the region as the economy has recovered.
Santa Rosa, Calif.
Santa Rosa, a metro area of about a half million residents, benefits from a larger, more diversified economy than Merced, Napa and other regions of California with sharp income gains. The area’s growing industries include tech, hospitality and health care. Kaiser Permanente and a casino resort serve as Sonoma County’s two largest employers.
The Bay Area Council Economic Institute’s Randolph said the region also benefits from its proximity to San Francisco as some residents commute to high-paying jobs in the city but reside further out where homes are more affordable.
Back in 2008 and 2009, the region’s personal incomes experienced sizable declines. The subsequent recovery took a few years to begin to accelerate, but real personal incomes have climbed an estimated 11.9 percent over the past three years.