Income Rose Almost Everywhere in 2020

Most Counties in the Nation saw incomes rise during the pandemic.

By Nate Griffin – November 23, 2021

Key Points:

• Personal Income is up in 2020 from 2019 nationally.

• Small counties on average saw a higher growth rate.

• Much of it was due to government stimulus

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2020 was an extremely disruptive year for the economy. From the record job losses to the trillions of dollars in fiscal stimulus, it's safe to say that nearly everyone was affected in some way.

In times of crisis, national level statistics can often present an incomplete picture. Zooming into the micro scale, such as county or metropolitan level, can provide a more nuanced representation of the real economy.

A recent report by the Bureau of Economic Analysis finds that per-capita personal income rose by 6.2 percent from 2019 to 2021 at the national level. This is nearly double the the 2019 gain of 3.6 percent but, it's hard to grasp exactly what this per-capita income gain really means for the average American.

At a closer level, however, the BEA's analysis finds that income in 98% of counties rose in 2020; only 69 counties saw a decline. And, rural areas have appeared to fair even better than the metro areas.

In 2019, per-capita income grew at about the same rate in rural areas as it did in cities. In 2020, however, non-metro areas grew by 7.7 percent, a nearly two percentage point advantage over cities.

Certainly, the data shows some counties reported extreme income growth, like Clark County, SD, which apparently grew by 57 percent. But outside of the extreme growth rates, Overall, more counties seemed to have a better year in 2020 than in 2019, with 765 counties reporting higher than ten percent growth compared to only 108 counties in 2019.

Overall, smaller counties tended to see higher rates of per-capita income growth, though there is more variance in the results for those counties. Larger counties were more stable in income growth, but tended to be slower.

Smaller counties tend to have higher variability for several reasons:

• First, a county with a large population will tend to have more stable income levels over time, because the addition of a few high earners will have little impact on the overall level. Small counties are more susceptible to this phenomenon.

• Second, larger counties tend to have more economic diversity. Therefore if a factory in large county goes out of business, the workers would have more opportunity to find a new job.

But smaller counties also tend to have lower per-capita incomes as well, meaning that they were more likely to benefit from the economic stimulus payments as well as expanded unemployment benefits that were available during 2020.

Those programs were critical to help offset the spikes in unemployment and business closure that were occurring during that time. The BEA estimates that government relief payments accounted for 91 percent of the increase in personal income. And, excluding those payments, income would have actually fallen in about one-third of counties.