Where the wealth is
If you live in, say, Boulder, Napa or San Jose, and you feel like your neighbors are wealthier than you are, it's probably not paranoia. They really do have more money than you. That's the takeaway from the map of the week, released Feb. 11 by the U.S. Census Bureau, that shows which counties have the highest concentration of high-income households -- in this case those belonging to the top five percent.
Western metro areas that made the top ten list include (rank, metro, concentration of high-income households):
2. San Jose-Sunnyvale-Santa Clara, Calif. 15.9%
4. San Francisco-Oakland-Fremont, Calif. 13.0%
7. Oxnard-Thousand Oaks-Ventura, Calif. 9.7%
9. Boulder, Colo. 9.4%
10. Napa, Calif. 9.3%
Missing from that list are rural areas with high concentrations of wealth (because the Census folks decided to only break out the metro areas). But the map shows some patterns: Outside of cities, wealth tends to concentrate in mountainous areas (i.e. resort/second home sorts of places, like Pitkin, Eagle and San Miguel Counties in Colorado, and Teton County, Wyo.); Los Alamos County in New Mexico (because of all those well-paid physicists); and in major extraction economies (e.g. a handful of coal/natural gas/oil rich counties in Wyoming, North Dakota, Western Colorado).
So it would seem that big swaths of the West are doing quite well. After all, if a place has more rich folks, it also has more money, which equals more spending, which creates a better economy, right? Not exactly. In fact, the same places that have the most high-income households also tend to have the highest rates of income inequality. Boulder, Colo., along with its cousin Aspen, have long been near the top of the nation's list on the Gini Index, which rates income inequality. As far as sustainable economies go, that's bad news: Economists generally agree that a more even distribution of wealth, i.e. a bigger middle class of consumers, makes for a healthier economy.
Here's another map -- a bit outdated, but you get the idea -- ranking counties by Gini Index scores. The higher the score, the less the wealth is spread out (i.e. the bigger the gap between rich and poor):
Notice that the correlation between high concentrations of wealth and income inequality, while widespread, isn't universal. Some counties with a lot of wealthy households actually have low Gini scores, meaning they spread the wealth around pretty well. Campbell County in Wyoming, for example, home of Gillette and the Powder River Basin coal mines and coalbed methane boom, has a lot of wealthy people (in one Gillette Census tract, more than 50 percent of households make more than $100,000 per year), but also has a low Gini score. Same goes for that state's Carbon, Converse and Sweetwater Counties and Colorado's Garfield County, all heavily reliant on extraction booms.
The news isn't so good for those of us who have pushed the so-called creative economy, one built on high-tech, cottage manufacturing, the arts, education and tourism. Indeed, the creative hubs -- the Boulders, San Joses, and so on -- are the very places where the success of those buying the cappuccinos isn't filtering down to those who are making them. Instead, the creative success, if you will, is raising the cost of living, which in turn drains away the precious wages of those below a certain income level, leaving them little in the way of disposable wealth. This drags down the economy as a whole (and tends to result in a massive commuter class that collectively climbs into its worn-out cars each morning and drives a lot of miles, bringing down their own quality of life and that of everyone else with all that extra exhaust).
Even Richard Florida, the urbanist and creative-class booster, is now admitting that creative economies are not balanced economies. It's not exactly a new problem, but it's becoming more and more exacerbated. One only need to experience the line of traffic going out of Boulder on a workday afternoon, or into Aspen on a Monday morning, to realize how unsustainable it all is. The question now is what to do about it. The West's many economies are relying on the answer.
Jonathan Thompson is a senior editor for High Country News. He has returned to his hometown after many years away only to find a grossly inflated housing market and a barely-scraping-by working class. His Twitter handle is @jonnypeace.