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Utah economy

Cities where incomes have struggled to keep pace with inflation

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The US economy is now a full year into a historic inflation run. Year-over-year price increases in the Consumer Price Index have exceeded 5% every month since May 2021, peaking at 8.5% in March. As the Federal Reserve began raising interest rates to cool the economy, supply chain challenges and strong consumer demand throughout the pandemic drove inflation to an all-time high level in four decades.

While countless headlines over the past year have evoked widespread worries about inflation, not all households experience rising prices in the same way. For example, homeowners who bought before the pandemic were spared the surge in housing prices, while remote workers were less sensitive to rising vehicle and gasoline costs. And amid a tight labor market and the Great Resignation, many workers saw their wage gains outpace the rate of inflation, but for those who didn’t, rising prices effectively gave them a pay cut.

Even before the current wave of inflation, many workers were already in a difficult position due to the relatively slow growth of wages relative to prices over the past decade. Average hourly earnings posted year-over-year growth of between 2% and 3% for most of the decade before the pandemic, lagging the rate of CPI growth at several points. And during this period, high earners – who may already be better equipped to withstand rising prices – have seen their wages rise much faster than low earners.

The pandemic and rising prices over the past year have changed that picture. At the start of the pandemic, year-over-year wage growth reached more than 7.5% and has remained around 5% for most of the past two years, almost double the growth rate of the previous decade. This was good news for workers initially, as wage growth far exceeded the rate of inflation. But with prices rising rapidly, the March 2022 data for year-over-year changes in the CPI exceed the year-over-year changes in hourly gains by 3 percentage points.

Changes in the cost of living have also affected workers differently by geography. More than two-thirds of states saw the cost of living decline relative to the national average in the decade before the pandemic. In contrast, coastal states like Washington, Oregon, and Massachusetts led the nation in cost of living increases over the same period.

But with wage growth in mind, the rising cost of living has not necessarily reduced the real income of the typical worker in more expensive states. Many states that have experienced faster growth in the cost of living, such as California and Colorado, have also experienced economic prosperity that has increased wages faster than in other parts of the country. The state whose workers may be the best off in recent years is Utah, which grew the nation’s fastest in real income per capita from 2010 to 2020 at 43.1% and recorded the seventh lowest change in the cost of living over this period. At the state and metro level, other places have struggled with the opposite problem: slower increases in income alongside faster increases in the cost of living. The states where incomes have grown the slowest over the past decade are Alaska, Connecticut, Oklahoma and Louisiana.

The data used in this analysis comes from the United States Bureau of Economic Analysis. Real personal income the tables. To determine where incomes have struggled to keep pace with inflation, LLC.org researchers calculated the percentage change in real per capita income between 2010 and 2020, with lower values ​​ranked higher. high. All values ​​shown are adjusted for inflation in 2020 dollars. To improve relevance, only metropolitan areas with a population of at least 100,000 have been included. Additionally, metros were grouped into cohorts based on population size.

Here are the US metro areas where incomes have struggled to keep pace with inflation.

Large metros where revenue has struggled to keep pace with inflation

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15. Dallas-Fort Worth-Arlington, TX

  • Percentage change in per capita income (2010-2020): +22.7%
  • Total change in per capita income (2010-2020): +$10,888
  • Income per capita 2020: $58,828
  • Income per capita 2010: $47,940

Photo credit: Sean Pavone/Shutterstock

14. Memphis, TN-MS-AR

  • Percentage change in per capita income (2010-2020): +22.5%
  • Total change in per capita income (2010-2020): +$10,161
  • Income per capita 2020: $55,398
  • Income per capita 2010: $45,237

Photo credit: Travellaggio / Shutterstock

13. Boston-Cambridge-Newton, MA-NH

  • Percentage change in per capita income (2010-2020): +22.4%
  • Total change in per capita income (2010-2020): +$14,273
  • Income per capita 2020: $78,095
  • Income per capita 2010: $63,822

Photo credit: f11photo / Shutterstock

12. Kansas City, MO-KS

  • Percentage change in per capita income (2010-2020): +22.4%
  • Total change in per capita income (2010-2020): +$11,249
  • Income per capita 2020: $61,555
  • Income per capita 2010: $50,306

Photo credit: Sean Pavone/Shutterstock

11. Milwaukee-Waukesha, WI

  • Percentage change in per capita income (2010-2020): +21.6%
  • Total change in per capita income (2010-2020): +$11,232
  • Income per capita 2020: $63,321
  • Income per capita 2010: $52,089

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10. Tulsa, okay

  • Percentage change in per capita income (2010-2020): +20.4%
  • Total change in per capita income (2010-2020): +$10,630
  • Income per capita 2020: $62,762
  • Income per capita 2010: $52,132

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9. Virginia Beach-Norfolk-Newport News, VA-NC

  • Percentage change in per capita income (2010-2020): +19.8%
  • Total change in per capita income (2010-2020): +$9,210
  • Income per capita 2020: $55,652
  • Income per capita 2010: $46,442

Photo credit: f11photo / Shutterstock

8. Baltimore-Columbia-Towson, MD

  • Percentage change in per capita income (2010-2020): +19.7%
  • Total change in per capita income (2010-2020): +$10,464
  • Income per capita 2020: $63,531
  • Income per capita 2010: $53,067

Photo credit: Henryk Sadura / Shutterstock

7. Tampa-St. Petersburg-Clearwater, Florida

  • Percentage change in per capita income (2010-2020): +19.3%
  • Total change in per capita income (2010-2020): +$8,574
  • Income per capita 2020: $52,981
  • Income per capita 2010: $44,407

Photo credit: Sean Pavone/Shutterstock

6. New Orleans-Metairie, LA

  • Percentage change in per capita income (2010-2020): +17.9%
  • Total change in per capita income (2010-2020): +$9,105
  • Income per capita 2020: $60,012
  • Income per capita 2010: $50,908

Photo credit: Sean Pavone/Shutterstock

5. Oklahoma City, OK

  • Percentage change in per capita income (2010-2020): +16.6%
  • Total change in per capita income (2010-2020): +$8,014
  • Income per capita 2020: $56,419
  • Income per capita 2010: $48,405

Photo credit: Sean Pavone/Shutterstock

4. San Antonio-New Braunfels, TX

  • Percentage change in per capita income (2010-2020): +16.6%
  • Total change in per capita income (2010-2020): +$7,286
  • Income per capita 2020: $51,295
  • Income per capita 2010: $44,009

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3. Washington-Arlington-Alexandria, DC-VA-MD-WV

  • Percentage change in per capita income (2010-2020): +15.6%
  • Total change in per capita income (2010-2020): +$9,348
  • Income per capita 2020: $69,115
  • Income per capita 2010: $59,766

Photo credit: Sean_Pavone / Shutterstock

2. Hartford-East Hartford-Middletown, CT

  • Percentage change in per capita income (2010-2020): +14.9%
  • Total change in per capita income (2010-2020): +$8,523
  • Income per capita 2020: $65,724
  • Income per capita 2010: $57,201

Photo credit: Sean Pavone/Shutterstock

1. Houston-The Woodlands-Sugar Land, TX

  • Percentage change in per capita income (2010-2020): +14.1%
  • Total change in per capita income (2010-2020): +$7,417
  • Income per capita 2020: $60,092
  • Income per capita 2010: $52,675

Detailed results and methodology

The data used in this analysis comes from the United States Bureau of Economic Analysis. Real personal income the tables. To determine where incomes have struggled to keep pace with inflation, the researchers calculated the percentage change in per capita income between 2010 and 2020, with lower values ​​ranked higher. In case of a tie, the place where the total change in per capita income over the same period was the lowest was ranked first. Note that all values ​​shown are adjusted for inflation in 2020 dollars. To improve relevance, only metropolitan areas with a population of at least 100,000 have been included. Additionally, metros were grouped into cohorts based on population size: small (100,000 to 349,999), medium (350,000 to 999,999), and large (1,000,000 or more).

Mary Cashion

The author Mary Cashion