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.
“The prosperity of recent years has disproportionately benefited people with higher incomes, who own property, and who have technical or higher-level skills.”
“Meanwhile, wages have stagnated or fallen for long-term lower-skilled workers who have struggled to keep up, especially people of color.”
I’ve heard different versions of those points made many times since I arrived in Nashville two years ago. Anecdotal evidence abounds about where the benefits of “New Nashville” are accruing, and how growth is exacerbating the gaps between newcomers and existing residents, the “haves” and the “have nots.” But what does the data say? Are those claims accurate? And do they tell the entire story?
To be clear, I hope that Plazas and advocates continue to push our elected leaders to keep equity front and center of debate about economic development in Nashville. When Metro and its various stakeholder groups decide they are ready to have a serious policy, and not just tinker around the edges, I hope that equity will be its cornerstone. There are many good examples from other cities to draw from, including what we adopted in Austin.
But if and when that day comes we’ll need more than testimonials and anecdotal evidence. Clearly articulating goals, developing strategies, and evaluating progress will require data and a serious commitment to open dialogue, transparency, and accountability. As with any public endeavor, everybody gets a say; all experiences are valid. But Very Serious People should not go unchallenged publicly because of what I’ve heard described as “Nashville Nice” or some distorted view of defining “politics” as one’s inalienable right to dissemble when facts are readily accessible. This was part of our motivation behind launching the resident survey and publishing the data on Metro’s open data portal. I hope the Cooper administration and new Metro Council continue down that path.
So, in that spirit, let’s take a look at Plazas’s points. We’ll combine them here since they are somewhat related and restate the issue as follows: Are the benefits of Nashville’s economic growth disproportionately accruing to people equipped with the tools (i.e. education, skills, etc.) to take advantage of it? And, if so, is that exacerbating inequality? I can’t say for sure how Plazas would define or measure “benefit[ed],” but since he used terms such as income and skills it’s probably safe to assume that he was thinking, at least in part, about workers. Which means the question becomes: Have wages “stagnated or fallen” for workers with lower levels of educational attainment compared to those with higher levels?
Here’s a table showing growth in inflation-adjusted (real) average earnings for workers age 25+ in Davidson County by educational attainment and race/ethnicity for 2011-18. The data is from the Census Bureau’s Longitudinal Employer-Household Dynamics program.
Average earnings for workers in Davidson County with no postsecondary education grew faster than any other cohort during that time period. In fact, average earnings for workers with no high school diploma or GED grew about three times faster than average earnings for workers with a bachelor’s or advanced degree, according to Census estimates. Clearly, Nashville’s recent period of economic growth has produced gains for workers across the spectrum of education and skills, not just at the top of it.
But I don’t think that’s what Plazas was really trying to say. I think his point was directed more toward issues of equity and affordability–and, in that context, he’s absolutely right. Housing experts tell us that we should spend no more than 30% of earnings on housing costs to be considered affordable. Do that calculation using the 2018 figures in the table above and Plazas’s argument comes into focus. For example, average earnings for Black workers in Davidson County are equivalent to about $1,000 in total monthly affordable housing costs. The average rent in Nashville now exceeds $1,400 per month.
It’s the same story for Hispanic workers in Davidson County, as well as workers with no completed postsecondary education, on average. And the gaps are growing. Inflation-adjusted average rent in Nashville increased by 40% in 2011-18, compared to average earnings growth of only 5% for Black workers in Davidson County.
As any of my former students can attest, I feel very strongly–and very likely annoyingly so–about the importance of a call to action when developing a strategy. It’s an often overlooked feature in practice. But if you don’t have a compelling call to action it can be really difficult to get people engaged and participating in a serious way.
I’ll offer this for Plazas’s next one:
In 1998, when Nashville was a much different place, Black workers in Davidson County earned, on average, about 66% that of White workers. Today, despite twenty years of economic growth and opportunity, it’s 59%.
First, when it comes to priority setting, luckily they don’t have to rely on my objectivity. In 2018 we launched Nashville’s first recurring, random-sample resident survey, a performance management tool most communities of this size have had in place for a long time. The survey collects data from 400+ households each quarter (MOE +/- 5 on a quarterly basis and +/- 2.5 on an annual basis) and results are posted on Metro’s open data portal for public use.
The usual suspects–public education, police, affordable housing, streets and sidewalks, and public transportation–are consistently represented as high priorities, but note some of the differences in rank order and value across groups. For example, respondents who have lived in Nashville for less than five years are nearly twice as likely to say that public transportation should be Metro’s highest priority compared to respondents who have lived here for twenty or more years. Despite making up the majority of WeGo ridership, only 6.0% of low-income (< $30,000) respondents and 4.7% of black respondents think that public transportation should be Metro’s highest priority. Affordable housing, by contrast, gets 26.6% and 32.6%, respectively.
None of that likely comes as a surprise to transit advocates or political candidates and campaign staff with access to expensive polling data. But polling data isn’t usually in the public domain and open to scrutiny; thus it can’t provide the common set of facts needed to openly debate and reach consensus on controversial issues. I’m hoping Mayor-elect Cooper is serious about pushing Metro, and the city, in this direction. Increasing Metro’s investment in the resident survey to get a large enough sample for council district breakouts would be a good start.
Second, there needs to be more public engagement in Metro’s budget process. There’s a question on the resident survey about satisfaction with Metro’s budgeting and stewardship of public funds. The campaign rhetoric from Cooper’s side painted a dire picture of majority, widespread discontent on that front. In reality, 41% of respondents are dissatisfied with Metro’s management of public funds, according to the survey. Now, while 41% is not a majority, it is significantly higher than the 19% of respondents who are satisfied, so, you know, well-played and all. But that leaves 40% who say they either don’t know or are neutral on Metro’s financial management–and that’s an information gap that shouldn’t be wide enough for politicians to exploit. But it was a smart strategy. The column in the table above marked Highly Engaged includes respondents who have contacted a Metro elected official and attended a public meeting in the last year. This gets to the difference between political polling focused on voters and performance management surveys focused on all residents, but it’s probably safe to assume that the Highly Engaged crowd generally maps to voters. They are 20% of the survey sample and 58% of them are dissatisfied with Metro’s financial management.
Finally, Metro and the city of Nashville need an economic development strategy. We touched on this in our meetings of the Tax Increment Financing Study and Formulating Committee, but it was a bit outside the narrow scope of that effort. To be clear, Metro’s economic development staff is, and has been, top-notch. They are professionals in every sense of that word. But we are deploying subsidies–the “tools in the toolbox”–without a clearly articulated, consensus position on what we are trying to accomplish. In strategic planning terminology, we are deploying strategies (the how) without clearly defined goals (the what), and we’ve entirely skipped over the call to action (the why).
We have to fix that by engaging the community to help develop clearly defined, measurable goals for inclusive, equitable economic development that improves living standards for residents. That should be the goal. I’d encourage Mayor-elect Cooper to check out Austin’s economic development policy. We revamped it about ten years ago to include a publicly available cost-benefit analysis of every proposed deal–a common set of facts–and multiple opportunities for the community to weigh in before a contract was approved. It even earned an award for transparency from a leading anti-subsidy advocacy group, Good Jobs First. Restoring trust starts with transparency.
Congratulations, again, to Mayor-elect Cooper and his team. Here’s to a more data-driven Nashville.
“Thanks to a surging economy and an onrushing hot-city rep, the Music City has been gaining about 100 new residents a day.”
The “100 people per day” is a wonderful talking point for realtors and others leveraging growth to serve a special interest or to support a political argument. But it’s not true, or, to be more accurate, it’s not defensible using publicly available data. Ditto, Austin.