Nashville’s health care industry accounted for $10.996 billion in value-added to Davidson County’s gross domestic product (GDP) in 2018, according to my analysis of BEA’s data, or about $1.50 out of every $10 in total economic value. Health care is 15.3% of total GDP in Davidson County, which ranks first among the largest 100 county economies in the U.S., followed by Bronx (15.1%), Nassau (14.8%), and Kings (13.0%) in New York.
Health care’s inflation-adjusted growth rate of 2.8% in 2018 trailed the Nashville economy overall (4.6%), but the industry’s real value has more than doubled since 2001. Of counties with a health care industry valued at $10 billion or more, only Maricopa, AZ (Phoenix), and Santa Clara, CA, surpassed Davidson’s real growth rate (105%) during 2001-2018.
County-level GDP data is an important milestone for federal statistics programs, especially for counties, like Davidson, belonging to very large metropolitan statistical areas (MSAs), where parsing county-level trends is difficult. Jobs data has been available at the county level for a long time but provides only one indicator of local economic activity. Analysts have been lobbying for publicly available, county-level GDP data for quite some time.
So, on behalf of local analysts and economic developers everywhere, thanks to BEA for this important contribution to our understanding of local economies.
San Francisco is approaching a milestone, and not everybody is going to be happy about it: Average wages in San Francisco are approaching parity with Silicon Valley.
Average weekly wages in San Francisco grew by double-digits for the third quarter in a row on a year-over-year (YoY) basis in 2019Q2, according to data released yesterday by the U.S. Bureau of Labor Statistics. The average weekly wage in San Francisco was $2,430 in Q2, up 15.5% (nominal) from a year earlier, which led all large counties by a mile (Seattle was next among counties with at least 500,000 jobs at 6.6%). In fact, San Francisco has now achieved that feat for two quarters in a row. It was the only large county to reach double-digit average weekly wage growth on a YoY basis in Q1 (10.2%); Hamilton/Cincinnati was next at 5.9%.
Wage growth in the Bay Area and Silicon Valley is hardly breaking news. We got the latest reminder just last week with the release of 2018 per capita income data. But yesterday was noteworthy because we could look back when we have more data available and realize that the first half of 2019 was the start of a new chapter in the story about economic geography in the Bay Area and Silicon Valley, one in which the center of gravity for higher earnings shifts from Santa Clara to San Francisco. Citylab followers and their favorite economists have speculated about that for some time. The evidence might be tilting in their favor.
The gap between the average weekly wage in Silicon Valley and San Francisco narrowed to about 7% in 2019Q2, a difference of less than $200. That’s the first time the wage gap in Q2 has been in the single-digits since at least 2001. Why is Q2 significant? It’s not surprising to see the average weekly wage in San Francisco approach or even slightly exceed the average weekly wage in Silicon Valley in Q1, or occasionally Q4, due to the timing of bonuses paid in finance. There are larger numbers of finance jobs in southern California given the size of those counties, but San Francisco has the most significant finance cluster on the West Coast (a jobs LQ of 1.44 and wages LQ of 1.59, for the economists). But the numbers quickly flip back in favor of Silicon Valley in Q2, Q3, and usually Q4. The last notable narrowing of the wage gap in spring or summer was in 2009, and before that in 2002–but not to single-digits.
To understand how quickly things have shifted in the Bay Area labor market, consider how San Francisco compares to New York, historically where you would find the nation’s most highly compensated workers, on average. San Francisco’s recent track record of ludicrous speed wage growth resulted in wage parity, at the average, with New York for the first time in 2016Q3. Less than three years later the gap was 15% in favor of San Francisco.
Will 2019Q3 be the turning point in the story when San Francisco surpasses Silicon Valley? We will find out on February 20.
1) Income growth in Silicon Valley and the Bay Area continued at a mind-boggling pace. Among large counties with 500,000 or more in population five of the top ten ranked by real (inflation-adjusted) per capita income growth in 2018 are in California, led by Santa Clara and San Mateo at 4.5%. A reference point to the U.S. can help make the point in a different way. Real per capita income (PCI) in the U.S. was up about 1.9% in 2018. Nine large counties experienced real PCI growth that was more than double the U.S. rate–five were in Silicon Valley or the Bay Area.
2) Tulsa ranked #1 among large counties. It was the only one to reach 5% in real PCI growth in 2018. In fact, most of the state of Oklahoma appears to be doing well, at least according to PCI growth as a measure of economic well-being. The state’s two large counties ranked in the top twelve nationally (OKC was 12th at 3.4%) and real PCI grew in every one of the state’s larger counties with 50,000 or more residents, led by Washington at 8.3%.
3) The number of very high-income counties is growing, and the geographic concentration of those counties is shifting. In 2010 there were only five counties with PCI of $100,000 or more (in 2018 dollars). None were in California. Marin was the only CA county in the top ten; Santa Clara ranked 42nd. The number of counties with PCI of $100,000 or more grew from five in 2010 to nineteen in 2018. Three of the top ten were in California; Santa Clara went from 42nd to 15th. We now have one county with PCI of $250,000+ (Teton, WY), and New York may become the first large county to reach $200,000 when 2019 data is out.
4) I made this point over at the Capital of Texas Media Foundation research blog, where I write about Austin, but it’s worth repeating here. The pace of per capita income growth in some communities since the end of the last recession is astonishing. Twenty-two counties have seen real per capita income growth of at least 50% since 2010. Most of those counties have relatively few residents and are found in energy-driven local economies–10 of the 22 are in Texas and have fewer than 20,000 residents–but several large counties are on or are approaching that list as well, including Santa Clara (52%), San Mateo (48%), and SF (47%). Places like Denver (40%), New York (39%), and Seattle (38%) are not far behind.
5) It’s interesting how closely Los Angeles and Chicago are tracking. In 2018 PCI was about $62,000 in Los Angeles and Cook County, and it also grew at about the same rate that year (2.3%). In fact, it’s been very close since 2010, about 23% in Los Angeles and 22% in Cook. Both counties also experienced slight declines in population in 2018.
The latest round of charitable contribution statistics, as well as a wide range of other useful data generated from 2017 tax returns, are now available from the IRS Statistics of Income (SOI) program. This annual data set is extremely useful for academic purposes, including studies of income inequality, concentration of wealth, and tax incidence. But there are also important practical uses, especially for non-profits and others engaged in fundraising. Zip code data is available, which can be used to target areas where taxpaying households are reporting greater levels of charitable giving (data is also available for states, metro/micro areas, counties, and congressional districts).
Here’s a summary of charitable contributions for Tennessee’s largest counties:
Summary data can be calculated in several ways. Here I’ve ranked large counties (100,000+ in population) by the share of tax returns reporting deductions for charitable contributions. For example, 38.1% of taxpaying households in Williamson County reported deductions for charitable contributions in 2017, which is by far the highest rate among all counties in TN and more than twice the statewide rate (16.8%). That shouldn’t be too surprising given the median household income in Williamson County of $103,543, which is also, by far, highest among counties in the state (Wilson is second highest at $66,123). Charitable contributions, calculated as a share of tax returns (.85) or as a share of total income (.53), and household income are positively correlated, as you might expect.
Here’s a look at which counties of any size exceed the statewide rate (16.8%) of tax returns with charitable contributions:
I’ve bolded two smaller counties, Fayette and Loudon, that join many of the largest counties in the state on this list. Fayette County, in particular, stands out at 25.8%, the second highest share of taxpaying households reporting charitable contributions.
Same idea here, but ranked by charitable contributions as a share of total income:
Shelby County tops this list at 3.6%, compared to the statewide rate of 2.4%. In other words, deductions for charitable contributions reported by taxpaying households in Shelby County in 2017 were equivalent to 3.6% of total income reported.
Finally, statistics are also available by income bracket. Here’s a look at counties that exceed the statewide rate (75.5%) of returns reporting charitable contributions among households with $200,000 or more in total income reported:
Shelby County tops that list at 82.4%, slightly ahead of Williamson County. Shelby County also ranks highly on charitable contributions as a share of total income among $200,000+ households that exceed the statewide rate of 3.7%:
Of course, not all charitable contributions (or income) are reported on tax returns. Further, tax deductions do not adequately reflect all charitable activity performed by residents of a community. Significant contributions are made in non-monetary ways.
That said, which county is the most charitable in Tennessee, based on this newly published data for 2017? I’m giving the nod to Shelby County, but its highest-income households need to step it up a bit to catch Hamilton. My second overall goes to Williamson, but I’m curious about its absence from that last table on high-income giving.