In U.S., Income Growth Dispersing to More Places

Jed Kolko takes a closer look at geographic inequality in the United States and says the picture is more complicated than just high per-person income concentrated in certain metropolitan areas.

The income gap has increased between rich and poor areas, but the dominance of a small group of places with high total income levels has decreased over time. "In fact, economic activity — as measured by total income — is less concentrated in a handful of top metro areas today than it has been during most of the past half-century," says Kolko.

In addition, metros where income is rising are not the same places where populations are increasing, he notes. “In other words, in almost all cases, economically successful places in America have gotten bigger or richer but not both.”

In rich places, the lack of population growth is due largely to a lack of housing and high costs, which push out households unable to take on the financial burdens. "But these constraints in rich places may also help spread the wealth, by shifting growth to a wider set of more affordable places where a lower cost of living more than offsets lower salaries for most occupations," writes Kolko.