The mainstream media commonly assumes that affluent Americans like to cluster in the dense cores of cities. This impression has been heightened by some eye-catching recent announcements by big companies of plans to move their headquarters from the ‘burbs to big cities, like General Electric to Boston and McDonald’s to Chicago.
Yet a thorough examination of Census data shows something quite different. In our 53 largest metro areas, barely 3% of full-time employed high earners (over $75,000 a year) live downtown, according to Wendell Cox’s City Sector Model, while another 11.4% live in inner ring neighborhoods around the core. In contrast, about as many (14.1%) live in exurbs while suburbs, both older and new ones, are home to 71.5% of such high earners.
New county-level research by Chapman University researcher Erika Nicole Orejola also sheds light on the geography of wealth. Orejola ranked the nation’s 136 largest counties by the proportion of full-time workers in the population who earned over $75,000 in 2015, which represented the 77th percentile of incomes then, and by the share of households earning over $200,000.
She found that 16 of the 20 counties with the largest share of full-time employed residents earning over $75,000 were functionally suburban, with most people driving to work and living in low to moderate density environments. The other four, interestingly enough, are among the most urbanized parts of the country, including Manhattan and San Francisco.
Where The High-Wage Earners Are
The very top of this pyramid consists largely of two archetypes, elite “superstar” cities, but more so well-located suburbs, often near the most dynamic cores. Many are areas that have benefited the most from the post-Great Recession boom in technology as well as in the much larger business and professional services sector.
Ranking first is New York County, otherwise known as Manhattan, where a remarkable 49.2% of all full-time workers earn over $75,000. That’s up from 40.2% in 2006. Other big counties with high concentrations of high earners include No. 3 San Francisco (49.1%), No. 7 Washington, D.C. (44.9%, up sharply from 29.5% in ’06), and No. 14 King County, Wash. (41.3%), which includes Seattle and its closer in suburbs.
Virtually all the rest are counties that are primarily suburban, usually close to high-wage core cities. These include, not surprisingly, the California counties of Santa Clara (fourth place) and San Mateo (ninth), which make up Silicon Valley. (In Santa Clara, a whopping 21% of households have annual incomes over $200,000, tops in the country.) Several New York suburbs make the top 20, including Monmouth, N.J. (eighth), Westchester, N.Y. (10th), Fairfield, Conn. (11th), and Nassau County, N.Y. (Long Island) (13th).
There are also strong pockets of high-wage workers in suburban counties surrounding Boston, including Norfolk (fifth) and Middlesex (12th). Washington, D.C., is flanked by wealthy suburban Fairfax County, which ties with Manhattan for the highest percentage of resident full-time workers making over $75,000 (49.2%) – we gave Manhattan the top ranking for its greater population (1.63 million vs. 1.13 million for Fairfax). Another D.C. suburb, Montgomery County, Md., ranks sixth. And outside Philadelphia, Chester County ranks 17th.
The pattern holds away from the East and West coasts. The Houston suburb of Fort Bend County ranks 18th and the Dallas suburb of Colin County ranks 19th. Near Chicago, DuPage County ranks 24th and Lake County 27th. Oakland County outside of Detroit ranks 25th, and 29th-ranked Johnson County, Kan., is the most dynamic part of the Kansas City regional economy.
Counties housing some of the nation’s largest cities don’t fare well in this ranking, but that isn’t necessarily because the wealthy aren’t there. The nation’s largest county, Los Angeles, ranks a mere 74th, with 24% of the full-time employed population earning over $75,000; in nearby suburban Orange County the proportion is 33.8%. But that’s because L.A. is much larger– L.A. County has more than double the number of high earners as Orange Country, 808,000 vs. 360,000. Similarly Cook County in Illinois, which includes Chicago and its closer in suburbs, places 55th with a 27.7% share of high earners, but it’s still home to 499,350 people making over $75,000, 2.3 times as many as live in higher-ranked DuPage and Lake County combined, and the high earner population in Cook County has been growing faster. Kings County, N.Y., aka Brooklyn, comes in 66th with 25.4% of the full-time working population making over $75k, but that’s still 221,000 high earners, and it’s had the second fastest growth rate in its high earner population of any large county since 2006.
The Bronx, long a poster child for urban poverty, clocks in 132nd, fourth from the bottom, but it ranks 11th for the growth rate in the proportion of its population that earns high incomes, up from 7.2% in 2006 to 12.3% in 2015.
Households Over $200,000 Income: The Suburban Connection
Much the same pattern applies to households with incomes over $200,000 annually. The same four urban core counties rank highly: San Francisco is third with 20.4% of households making over $200,000 a year, more than double the proportion in 2006, New York County is fifth, Washington, D.C., ranks 16th and the mixed suburban-urban core of the Seattle area, King County, Wash., places 20th. All the rest of the top 20 are firmly suburban, led by Santa Clara, where 21% of households earn $200,000 a year, followed closely by the D.C. suburb of Fairfax County, Va.
So what gives here? The Center for Demographics and Policy at Chapman University just completed a national survey, fielded and tabulated by The Cicero Group, of 1,191 professionals aged 25-64 with household incomes greater than $80,000, and who work in education, healthcare, information technology, finance or other professional services jobs. What we found may help us understand what high income professionals are looking for in terms of location.
The survey found priorities for actual high-end workers do not largely follow the “hip and cool” agenda so promoted by some urban pundits and inner city developers. In fact, the biggest factors influencing location, the respondents told us, are such prosaic factors as housing costs -- generally the number one issue -- jobs for a spouse, commute times, proximity to family, and K-12 quality.
Features commonly cited as reasons for an urban revival, like cultural amenities and nightlife, are not so critical with this demographic. In our survey, nearly 40% cited housing costs and 30% commute times as reasons why they would choose not to move to a place. In contrast, barely 5% prioritized “access to culture” or “nightlife.”
The needs of families seem paramount. There are certain factors that are “must haves , such as affordable housing, jobs for spouses and reasonable commute times,” notes the survey’s designer, Chapman University analytics expert Marshall Toplansky.
The message for cities and counties seeking to lure professionals may be, think parks and playgrounds rather than edgy music venues -- focus on the basics that shape quality of life for families.
The Future
Where are these folks likely to go in the coming years?
There may be some good news here for central cities. Some of the biggest increases in the proportion of high earners in the population took place in places like Kings (Brooklyn) and Queens counties, which have been prime areas for gentrification over the past decade as Manhattan has become extraordinarily pricey. Since 2006, Kings has seen its number of high income earners soar by almost 94% while Queens saw a jump of 78%.
Other urban core counties have seen some impressive gains, although from a low base, including Baltimore and Philadelphia counties. But here too some suburban areas have shown strong increases, notably Snohomish County, Wash., just outside Seattle, which saw its $75k cohort grow by over 90%. Other suburban areas with strong growth trajectories including Utah County, south of Salt Lake City, Ft. Bend and Montgomery counties outside Houston, as well as several suburban counties outside Boston.
What appears to be occurring are two things at the same time. There’s a strong concentration of affluent households both in select suburbs of major cities and another one, far more urban, that is beginning to spread, but in many older cities although still at a much lower concentration. Other hotspots appear to be in the newer suburbs of the Sun Belt. The geography of affluence is changing, but in ways that are as diverse as the country as a whole.
This piece originally appeared on Forbes.com.
Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book is The Human City: Urbanism for the rest of us. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.
Photo: About Fairfax County website.
Email this Story
