Morton Marcus: Snail’s pace of income progress

Somehow we learned that Caesar wrote “Gaul is divided into three parts.” So too the United States is divided by the federal Office of Management and Budget (OMB) into three classes of counties.

Those counties with a city of 50,000 or more persons, or a strong commuting relationship to such a county, are in Metropolitan Statistical Areas (Metros).

Secondarily, OMB created Micropolitan Statistical Areas (Micros), counties with cities of 10,000 or more inhabitants.

Third, if with a population smaller than a Micro, and without a significant commuting relationship with a Micro or Metro, then you don’t get a special name. However, I’ll label you as a Rural county.

Metro areas dominate the nation with 86% of the population. They are the focus of employment, entertainment, and environmental damage. In addition, the federal government puts aside beaucoup bucks for their projects, which are often more expensive than they would be in less densely populated areas.

Between Metro and Rural counties stand 543 struggling Micro areas, which receive less funding and very little attention. U.S. Metro areas’ populations grew by 8.3% between 2009 and 2019, just ahead of the nation’s 7.0% increase. Micro areas, however, advanced a mere 0.7%.

Indiana, as expected, was somewhat different. In the Hoosier Holyland, 45 metro counties contained only 78%, not 86% of our population. Metro counties grew by 5.4% or 291,000 persons, but the state showed growth of 273,000. The difference: a 9,200 decline in 27 Micro counties and an 8,800-person loss in 20 Rural counties. Because of tradition and powerful lobbying, Rural America is gifted with funds and grief for its decline.

In Hoosier Micros, with city populations of 10,000 to 50,000 residents, the population declined in 15 areas. The biggest decline was a loss of 4,400 in Marion (Grant County). In 11 gaining Micros, the biggest advance, 2,400, was in Seymour (Jackson County). In percentage terms the highest rate of growth (6.3%) was realized in the Washington Micro (Daviess County), while the sharpest decline (-6.3%) was in Marion once again.

Some folks will tell you, “It isn’t the number of persons gained or lost that matters as much as the change in relative Per Capita Personal Income (PCPI).” That’s relative to the state’s PCPI. In Indiana, Metro areas’ PCPI shrank slightly from 3.6% ahead of the state’s $34,102 in 2009 to 3.3% above the statewide $48,678 in 2019.

In Micro and Rural areas there were slight improvements as Rural areas’ PCPI deficit was reduced from -14.3% to -14.0%. Likewise, the difference between the statewide PCPI and the Micro PCPI declined from -11.4% to -11.1%.

This small convergence toward the state average PCPI might be seen in a positive light by some. Others would find moving up toward a state average that is itself 13% below the national PCPI, is not cause for rejoicing.