William Wyckoff

The Income of the One Percent Across the United States (and in Montana)

Article-Grid, Economic Geography, Montana Atlas, North America / By

I was anticipating that yesterday’s post would conclude the current series on county-level maps of the United States, with a focus on Montana, but I came across another fascinating map that cannot be ignored. Posted on the graphics-rich Visual Capitalist webpage, this map shows the average annual income of the top one percent of residents in each U.S. county. The map, however, does have problems; note how much of California’s Bay Area – a place where the elite tend be very wealthy indeed – has been oddly erased.

Most of the patterns evident on this map are not all that surprising. But it is interesting to see the huge variations in the income level of the “one percent” at the county scale. The callouts, which point to the counties with the highest income levels, are useful. Note how the figure found in Teton County, Wyoming – the site of Jackson Hole – dwarfs all others. Many other Wyoming counties also rank quite high, yet Wyoming still has the third lowest level of income inequality in the country (as reflected in its  GINI Coefficient). I have a difficult time understanding why Wyoming, a wealthy state with an abundance of natural beauty, has avoided the recent population surge that has occurred in neighboring Idaho, Utah, Colorado and Montana. In 1980, the state had a mere 469,557 residents; in 2020, the number had increased only to 576,851.

Several other natural-amenity counties in the West are also near the top of the chart, including Summit County, Utah (Park City); Blaine County, Idaho (Sun Valley); and Pitkin County, Colorado (Aspen). (As its Wikipedia article notes, when “measured by mean income of the top 5% of earners, [Pitkin] is the wealthiest U.S. county.) A more surprising listing is Douglas County, Nevada, located just east of the Sierra Nevada crest. Scenic Douglas has seen rapid growth over recent decades, surging from fewer than 7,000 residents in 1970 to almost 50,000 in 2020. Many of its newcomers are wealthy former California residents seeking a low-tax haven.

Quite a few sparsely populated counties fall into the top tiers on this map despite having few natural or culturally amenities. Many are in energy-producing areas, but others are largely agricultural. Across the Great Plains, figures very widely. South Dakota, for example, has several counties in the second-highest tier and several in the lowest. Union County SD, with fewer than 17,000 residents, posts an elevated figure of 4.1 million. Also in the top tier is Minnehaha, two counties to the north. Minnehaha contains booming Sioux Falls, South Dakota’s largest city (population 197,000). Sioux Falls has emerged as an important financial hub, particularly for credit-card companies, owing largely to South Dakota’s relaxed usury laws. South Dakota’s extraordinarily relaxed residency and taxation laws help explain its other centers of wealth. As the South Dakota Residency Center webpage notes:

Unlike many states in the Union, which don’t make being a full-time traveler easy, South Dakota welcomes full-time travelers to its ranks. Here are some of our favorite reasons why South Dakota has become one of the most popular places for travelers to establish residency.

We don’t have state income tax, pension tax, personal property tax, or inheritance tax. 

That’s right, South Dakota is one of the lowest taxed states in the country! When you consider all the different types of taxes, South Dakota comes in well below the average. Plus, you can’t beat the 0% personal income tax.

With only 24 hours of actually being in the state, you can become a resident for at least five years before you’ll need to renew your driver’s license again.

It’s easy to license and register your vehicle.

Not only are our fees for licensing and registration low, but you can also complete your license and registration remotely. That means you don’t have to make a special trip to the state whenever you need to update your registration or register a new vehicle. Plus, you don’t have to undergo yearly vehicle inspections.

 

Most counties in the upper-interior south post relatively low income levels for their top earners. Although levels are somewhat higher in Kentucky’s storied Bluegrass region, noted for its horse breeding operations, none of its counties make the top tiers. In the Ozarks, one county does rank very high: Benton County, Arkansas, in the extreme northwestern corner of the state. Not coincidentally, Benton is the home of several major corporations: Walmart, JB Hunt Transport Services, Tyson Foods, and Simmons Foods. Unlike the rest of the state, northwestern Arkansas has been booming over the past few decades.

I find the Montana map of high earners quite surprising. The dark blue counties along the state’s eastern border are energy producers, and are thus expected to fall into a high category. But Powder River County is in a very low category even though its GINI Coefficient (see yesterday’s post) is very high and its poverty rate is moderately low. I am not sure how these figures could add up. I also find it mystifying that Gallatin County (Bozeman) would not make the top tier, and would be exceeded by Missoula County. The level of wealth among the rich people of Bozeman – and especially of Big Sky – is staggering. If the map is indeed accurate, I can only conclude that most of Gallatin’s wealthiest property owners maintain their official residences in other states. (South Dakota, perhaps?)

In conclusion to this series, I would like to thank William and Linda Wyckoff, who have been my mentors in the geography of Montana. Invaluable lessons have been given in fieldtrips and brew-pub conversations. Bill’s knowledge of the American West is unparalleled. I strongly recommend all of his books, but would like to draw special attention to How to Read the American West: A Field Guide. As noted on the book’s Amazon page:

From deserts to ghost towns, from national forests to California bungalows, many of the features of the western American landscape are well known to residents and travelers alike. But in How to Read the American West, William Wyckoff introduces readers anew to these familiar landscapes. A geographer and an accomplished photographer, Wyckoff offers a fresh perspective on the natural and human history of the American West and encourages readers to discover that history has shaped the places where people live, work, and visit.

Montana’s Changing Population Geography

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(Note: The next several posts will focus on the geography of Montana.)

As noted in previous posts, Montana is experiencing a population boom. Three decades ago, however, there was widespread worry about population stagnation and possible decline. Since becoming a state in 1889, Montana has experienced several demographic cycles, each marked by different geographical patterns. Geographer William Wyckoff has extensively documented these changes. In particular, I recommend his essay “Peopling the Last Best Place, 1870-1990,”* published by the Burton K. Wheeler Center at Montana State University at the time of lagging growth and concern about the state’s future. I will briefly summarize some of Wyckoff’s arguments before considering the more recent era of population growth.

The early cycles of boom and bust, Wyckoff argues, were linked to economies of natural resource development, governmental investments, and climatic fluctuations. Prior to 1890, the non-native population was heavily focused in the southwestern part of the state, particularly in a handful of mining districts. As Wyckoff’s map of settlement in 1870 shows, southwest Montana at the time was linked most closely to Utah. A decade before the turn of the century, however, the settlement of the Great Plains in the east accelerated, propelled by railroad development, a series of relatively wet years, and high wheat prices.

But as the map shows, Montana’s population in 1900 was still concentrated in the west, particularly in the four labeled counties. Far above the others was Silver Bow, containing the extraordinarily productive and profitable copper mines of Butte. Neighboring Deer Lodge, a copper-smelting hub, also stands out (its shuttered Anaconda Smelter Stack, at 585 feet, is the tallest surviving masonry structure in the world). Relatively large population clusters were also found in Lewis & Clark County, another mining center, and Cascade County, an emerging energy (hydropower) and transportation hub. Helena, in the former county, boasted of having the world’s highest concentration of millionaires (50 in a population of 12,000 in 1888). Cascade’s county seat of Great Falls exploded from 3,979 residents in 1890 to 14,930 in 1900. Gallatin County in southwest, with 9,533 residents, was the main agricultural region supporting the mining economy. As can be seen in Wyckoff’s second map, the Butte mining district had become the state’s demographic core by 1890.

 

In the first two decades of the twentieth century, agricultural expansion transformed the Great Plains, at least in areas accessible to the rapidly growing rail network. World War I was an especially promising time. As a result, many eastern Montana counties were subdivided. Ironically,  the demographic cycle went into reverse just as new counties were proliferating. Drought struck in the late teens and returned periodically in the 1920s, a decade that did not roar in Montana; the state’s population dropped by 2.1 percent during this period. As Wyckoff notes, over half of Montana’s banks failed between 1920 and 1926.

The agricultural boom of the period from 1890 to 1920 resulted in a far more geographically balanced population structure for the state as a whole. As can be seen on the 1930 population map, the mining district of the southwest were no longer dominant. We also see the rise of Yellowstone County and its key city of Billings, an emerging agricultural, energy, and transportation hub. Billings would surpass Great Falls as Montana’s largest city around 1970, and today has almost twice Great Fall’s population.

Moderate population growth returned to Montana in the post WWII period, with the 1950s and 1970s posting strong gains. With the exceptions of Cascade and Yellowstone countries, however, the Great Plains continued to stagnate. Agricultural mechanization reduced the need for labor, and the region’s harsh climate and remote location discouraged settlement. As Wyckoff notes, population growth in the post-war period was propelled by the forestry industries in the northwest, energy in the greater Billings and Great Falls area, and the early emergence of natural-amenities development in some of the more scenic valleys in the mountainous west.

In the 1980s, Montana’s population growth rate fell to 1.6 percent. As Wyckoff writes, “More than two-thirds of Montana’s 56 counties lost population, and the state’s struggling economy since 1980 prompted over 50,000 residents to leave.” Stagnation in a time of national economic growth generated concern, leading Montana State University to commission the study in which Wyckoff’s essay appears. But the situation would soon turn around. Montana’s population grew by almost 13 percent in the 1990s and by almost 10 percent in each of the first two decades of the new century. Much of this growth was focused on amenity-rich areas in the west. Of particular note are the two college towns of Missoula and Bozeman, home, respectively, of the University of Montana and Montana State University. Missoula County grew by almost 22 percent in the 1990s, while Gallatin County, where Bozeman is located, posted a gain of more than 34 percent. As Montana State University increasingly emphasized science and engineering, Bozeman emerged as a regional tech hub, contributing to population gains of more than 30 percent in Gallatin County during both the 2000-2010 and 2010-2020 periods.

The 2020 map of population by county again reveals a stark demographic divide, especially when contrasted with the map of 1930. With the exceptions of Yellowstone (Billings) and Cascade (Great Falls) counties, the Great Plains remains very sparsely settled. Most of its counties had larger populations in 1920 than they do today, and several have fallen below 1,000 residents. Population is now concentrated in the west, but even in western Montana most countries have small populations and have experienced little growth. That situation is perhaps changing, however, as exorbitant real estate costs lead many people to seek housing outside of the region’s booming cities, especially Bozeman. Many other parts of western and central Montana have excellent natural amenities, and thus appeal to those who value outdoor experiences.

*In “Population Decline in Montana,” by Patrick C. Jobes, Craig Wilson, and William Wyckoff. Published by the Burton K,. Wheeler Center, Montana State University, Bozeman, Montana. April 30 and May 1, 1991