Montana Doubles Households Earning $200,000 Or More
The number of Montana households earning over $200,000 a year has more than doubled since the start of the COVID-19 pandemic. Economist Bryce Ward, former Associate Director at the University of Montana Bureau of Business and Economic Research, shared the following graphic with the data to back it up:
In 2021 alone, Montana saw the greatest increase of all 50 states in this regard, with Vermont and Utah following but nowhere near as close. Ward, who holds a PhD in economics and also co-founded ABMJ Consulting in Oregon and Montana, breaks down how he came up with this map by using data available from the U.S. Census Bureau and its American Community Survey. It tells a familiar tale; Americans fleeing the west coast in search of housing and jobs.
HH = households
We noted in looking at the map that of the three west coast states, California was the only one experiencing a loss in this regard. We asked Dr. Ward to walk us through the numbers and what they meant. He was happy to oblige:
The $200,000 [income] is fixed, it's not adjusted for inflation so we expect the percentage to grow over time.
If you go back a decade to 2011 only 2% of Montana households earned over $200,000. That was the 5th lowest in the country. Montana now has over 6% of households earning over $200,000 and we're about the median state.
So we've been climbing the ladder in terms of the proportion of our households that are at least above this indicator of affluence. Which of course isn't perfect, but it's what we have.
The change is an impressive one, and Dr. Ward points out that this data confirms what we've been debating and arguing about for a long time:
If you've been in Montana for the past decade, there's been this tension between incumbent Montanans' love the place as it is, and the desirability of that place to people with money coming from elsewhere.
That tension of "Oh! Montana is changing! These rich people are coming! Things were better the way they used to be!" There's real material consequences that happen when people with greater means move into a community...mainly it drives up housing prices.
They have the ability to pay more for a house, and everybody experiences that effect.
Dr. Bryce Ward, PhD
However, Ward was quick to note that more well-off citizens in a community isn't inherently a bad thing; there's plenty of opportunity that we can't foresee:
But there's other stuff: when people have money, it changes the set of amenities that might be available, it changes how they (communities) approach certain things, changing things that used to be the way people like them...those are the tensions you see all across Montana.
Whether it's in the fight over changing Holland Lake Lodge or what do we do about housing in our communities, all of these are fundamentally a reflection of a change that's driven by more people with more money in Montana. Some of those changes you might like, some of those changes you might dislike. Affluent people might mean that we get better restaurants and better concerts.
How we balance those trade-offs is hard but the first step is trying to identify them. Get me information, help us process it, and then we can figure it out, this is a real thing.
I get it: change is scary. But I think it's impossible for anything as complex as markets and money staying stagnant for very long. Change begets change, and a great first step in trying to address new challenges would be looking at the numbers.