Between 2000 and 2010, was there income growth in the United States? If so, how much? And where did the most growth take place, compared to the United States in general? This post takes a stab at answering these questions and highlights the differences in income growth between the Washington, DC region and the rest of the United States. You will see that income growth in the richest counties surrounding the nation’s capitol (from 2000 – 2010, recession included) is about twice that than the national average. In short, what this article finds is:
Growth in Median Household Income between 2000 and 2010
- United States – 16.09%
- 5 Richest DC-area counties (plus DC) – 31.1%
- Other 5 rich counties – 17.85%
Growth in Median Family Income between 2000 and 2010
- United States – 17.43%
- 5 Richest DC-area counties (plus DC) – 30.98%
- Other 5 rich counties – 19.88%
The following graph is based on income numbers I pulled from the U.S. Census American FactFinder. It shows the differences in income and income growth between the richest counties in the United States. Specifically, it looks at the richest counties surrounding Washington, DC, compared to that of the entire United States and five of the richest U.S. counties not surrounding Washington. This article explains these numbers in full, so keep reading if you don’t want to make sense of the graph. Click graph for larger image.
In several posts I reference an April 2012 Forbes article that lists and describes the richest counties in the United States. This top 10 list contains five Washington, DC-area counties, including the top three richest on the list. I use this article not because of its academic rigor (which I will address), but because it is the top Google search return for the topic. A recent Washington Post article also addresses the issue, and has the count at 7 of the 10 richest counties.
This post will take that Forbes article a few steps further and compare the differences in median income between these 10 counties and the rest of the United States, in addition to looking at income growth over a ten year period, 2000 – 2010. All of the data that I use comes from the U.S. Census website.
Here’s the Forbes list, and the measure (median annual household income) the author (Nathan Vardi) uses to define wealth (I will explain this measure):
- Loudon County, Virginia ($115,574)
- Falls Church City, Virginia ($114,409)
- Fairfax County, Virginia ($105,416.)
- Los Alamos County, New Mexico ($103,643)
- Howard County, Maryland($103,273)
- Hunterdon County, New Jersey ($100,980)
- Douglas County, Colorado ($99,198)
- Fairfax City, Virginia ($97,900)
- Somerset County, New Jersey ($97,440)
- Morris County, New Jersey ($96, 747)
**Note** Skip the next few sections if you have a solid grasp on the statistics used to measure population demographics.
What the Forbes article is using to measure wealth – First, it should be clear that the Forbes article—and this post—use a median number, not an average. A median measure is the “middle score in a list of scores; it is the point at which half the scores are above and half the scores are below” (from here).
An average, or mean, is just that—the mathematical average of a group of numbers. Averages’ validity can be subject to extreme values (in our case really poor versus really rich people) and can sometimes not provide a clear description of reality. For example: would the average of 15 people living below the U.S. Poverty line averaged with 3 people worth $1million be accurate? No. With various debates regarding income equality and inequality in the United States, a more neutral approach is to use median income.
So the median value in this post takes an entire range of a number set, in this case income, and gives the number value at which half of the population (for each defined geographic region) lies on either side of the middle point. And we will be using two different median income measures—median household income and median family income. Let’s get some definitions out of the way.
Definitions from the U.S. Census:
median household income – “income of the householder and all other individuals 15 years old and over in the household, whether they are related to the householder or not”.
median family income – The total income of a family, defined by the Census as: “a family consists of two or more people (one of whom is the householder) related by birth, marriage, or adoption residing in the same housing unit.”
As you will see, the median family income is higher than households because a family—as defined by the U.S. Census above—is more likely to have a dual-income, married couple using the Census definition. If you are interested, the end of this article has a good explanation of the difference between median family and household incomes.
Now the Forbes article uses the following summary of its methods to create its list: “To determine America’s richest counties, we looked at median annual household income estimates from 2006 to 2010 in each county in the nation, provided by the U.S. Census’ American Community Survey. The estimates are in 2010 inflation-adjusted U.S. Dollars.”
You might notice that the numbers in their list—and provided earlier in this post—vary from the numbers I use. I have no idea if the article’s author(s) means he averaged the numbers from 2006 – 2010—I’m not going to the trouble to check. They should have been more clear about this. But their numbers differ from the 2010 numbers found on the Census website, which are the most up-to-date statistics publicly available. Since the Forbes crew was shady about their methods it’s almost impossible to double-check their work without guessing at how they conducted their study.
For the following graphs, I clustered the Top 10 Forbes Counties into the following groups, and averaged their income numbers:
Counties that surround Washington, DC (map). Note that I also included Arlington County because, using 2010 Census numbers, its income is actually higher than Fairfax County, which is #2 on the Forbes list. And, I included DC, because it just makes sense to use the epicenter of the region’s wealth. I’ll address any issues regarding sample-size and averaging at the end of this post.
- Loudon County, VA
- Fairfax County, VA
- Arlington County, VA
- Falls Church City, VA
- District of Columbia
- Howard County, MD
The Other Five Forbes List Counties not in the Washington, DC-area.
- Los Alamos County, NM
- Hunterdon County, NJ
- Douglas County, CO
- Somerset County, NJ
- Morris County, NJ
United States total
- Everyone in the U.S., including the residents of the above counties
Click graph for larger image.
Now the rest of this post could be spent talking about about the differences in total incomes between these counties and the U.S., but what I think is very interesting is the differences in growth between 2000 and 2010 for each cluster of counties. These growth percentages are located on the bars of the 2010 numbers, but I will list them here, just to be clear.
Growth in Median Household Income between 2000 and 2010
- United States – 16.09%
- 5 Richest DC-area counties (plus DC) – 31.1%
- Other 5 rich counties – 17.85%
Growth in Median Family Income between 2000 and 2010
- United States – 17.43%
- 5 Richest DC-area counties (plus DC) – 30.98%
- Other 5 rich counties – 19.88%
What is interesting (to me) is that, despite their enormous wealth, the 5 richest U.S. Counties not surrounding Washington, DC grew at about the same rate as the rest of the country from 2000 – 2010. Note, when I remove Los Alamos County from the non-DC counties, their average growth rates look much for like those of the rest of the country (household income, 16.23%; family income, 18.98%). Since Los Alamos’ County’s economy is based heavily on federal spending, it resembles that of the DC-area counties, and I thought it would be of merit to take a look with it removed.
To emphasize the difference in the DC Counties’ income growth and that of the rest of the United States from 2000 – 2010, here’s another graph showing the difference.
Click graph for larger image.
Income growth for Washington, DC’s richest counties, using both measures, is about twice that of the rest of the United States, from 2000 – 2010. The next step is to dig out the 1990 numbers and look at these numbers across two decades instead of only one. But I am pretty tired of formatting graphs right now so that will have to wait for another post.
Factors influencing DC-area growth
Total federal government is probably the biggest factor in income growth for the region. The income growth rates in the (rich) DC-area counties (and Washington itself) are, again, approximately twice those for the rest of the country; the DC-area growth rates are still 10%+ higher than the non-DC rich U.S. Counties. The percentage of total federal government spending growth in the years examined here, 2000 – 2010, correspond closely to the percentage growth in median incomes in the DC area’s richest counties compared to the rest of the United States–it also (approximately) doubles:
Click graph for larger image.
Conclusion – In conclusion I conclude that if you are reading this and don’t live—or are not making plans to live—in the counties examined in this article (especially Washington) perhaps you are not interested in your income growing. If you know anyone else who likes graphs please share this post with them (copy and paste the link to Facebook, email it, or tweet it).
Statistics and More Boring Stuff
I ran these numbers through an OLS regression analysis using the extremely free R Statistics Software and was returned some awesome coefficients. Since the ACS started in 2005, I had a fairly complete dataset for each year from 2005 – 2010, including some other population statistics/variables I pulled out when collection the median income data. But, in general, all of the variables I looked at in this post, and the regression coefficients, all go up in a positive and linear fashion. So the coefficients tell us little more than a percent change does. If you are interested in seeing these numbers, just ask. But the regular rules regarding smarminess, sass, amount of academic jargon used, and whether or not I like your tone apply and will determine whether or not you get a legitimate response from me.
