The people of Rocky Mount and New Bern made the list of 10 Cities Where Income Is Shrinking the Fastest.
Growth rates were calculated based on total real personal income — this includes compensation, income from property, minus contributions to the government — for all people in each city. Since growth rates were based on aggregate incomes, an increase in a city’s working-age population was often a major driver of growth. Nationwide, the number of working-age citizens remained essentially unchanged in 2013. In six of the cities where incomes grew the fastest, the working age population grew, contributing their incomes to those areas. In eight of the metros with shrinking incomes, on the other hand, the working-age populations remained flat or shrank.
Income growth is also strongly associated with economic expansion. Often, activity within a particular industry accounted for the bulk of the changes in total income generated in the area. With the exception of Danville, Illinois, the economies of all of the top 10 metro areas for income growth expanded faster than the nation’s 2013 GDP growth rate of 1.7%. The opposite was generally true for the cities with declining incomes….
To be sure, strong income growth is a healthy sign of the financial health of the area’s residents, just as a decline in personal income is generally a bad sign. However, strong income growth in an area did not necessarily mean incomes were very high. In fact, per capita income did not exceed the national income figure of $41,706 in seven of the 10 cities with the fastest-growing incomes.
In the six years through 2013 that the BEA has tracked regional income, annual per capita income peaked in 2013 in nine of the top 10 cities for income growth. Provo-Orem, Utah, where per capita income peaked in 2008, was the only exception. For cities with shrinking incomes, personal incomes peaked in 2011, 2012, or in New Bern, North Carolina, as early as 2008….
Despite incomes shrinking in 2013 in all of the bottom 10 cities, most of these declines were relatively recent. Only two metro areas — Anniston-Oxford-Jacksonville, Alabama, and Rocky Mount, North Carolina — posted income declines over the longer, six year period through 2013.
9. Rocky Mount, NC
> Income growth in 2013: -2.0%
> Income growth 2008-2013: -2.6%
> Per capita income: $36,307
> Annual unemployment rate: 8.6%
In many of the cities where incomes fell the most, long-term income trends were actually positive. In Rocky Mount, however, personal income dropped 2.6% from 2008 through 2013, one of the largest such declines. In contrast, incomes nationwide grew by 6.1% over that period. Like a majority of cities with shrinking incomes, the poor income growth in Rocky Mount may be tied to a relatively weak labor market — 8.6% of the area’s workforce was unemployed in 2014, one of the highest unemployment rates nationwide.
1. New Bern, NC
> Income growth in 2013: -3.1%
> Income growth 2008-2013: 0.0%
> Per capita income: $42,033
> Annual unemployment rate: 6.7%
Incomes declined faster in New Bern, North Carolina than anywhere else in the country. A New Bern resident took home an average of about $1,000 less in 2013 than in 2012. Shrinking income in New Bern was tied to a waning economy. Despite a 1.65 percentage point contribution to growth from the natural resources and mining sector, the economy shrank by 0.2%. Progress was significantly hindered by the government sector, which contributed a 1.14 percentage point drag on the economy, as well as the construction industry, which reduced the economy by nearly a quarter of a percentage point. Correspondingly, total income in the area declined by 3.1% in 2013, cancelling out all income growth from the previous five years. However, the area’s per capita income of $42,033 was still slightly higher than the corresponding national figure of $41,706.
Read more: 10 Cities Where Incomes Are Growing (and Shrinking) the Fastest - 24/7 Wall St. http://247wallst.com/special-report/2015/07/14/10-cities-where-incomes-are-growing-and-shrinking-the...