Income: Looking up at Mississippi

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income.001The last few posts laid out the age and education demographics of Warren, and showed what they have done to the workforce participation rate. Therefore, it will come as no surprise that these shifts have had a profound impact on the income of Warren citizens.

The numbers here are based on median household incomes. This is probably the most common way business and government looks at the affluence level of a community. For those of you who may not be familiar with the term, this refers to the total income, from all sources, of all the people residing in one household; that might be one person, but it might also be 2, 3 or more. The income being measured might come from a job, but it also includes investment income, any income from public assistance, or any other income of any type.

Median” means that half the people in the measured area, (in this case the city of Warren, the U.S. as a whole, and several other states) have income above the number, and half have income below. (This is different than the “average,” or “mean” point.)

pov lev.001Comparing Warren to the U.S. in the first chart shows that our median household income of $29,376 is more than 45% lower than the U.S, median of $53,889. Look closely at the trajectory of the lines in the first chart and you will see that we are falling farther behind with time. The rest of the country rebounded nicely from the 2008 recession, but the slope of Warren’s line turned south for the first time in the 2015 Census, dropping about $1500 per household since 2010.

Moreover, 30.8% of Warren’s population is living below the Federal poverty line, which is more than double the national average.

To put this in some perspective, Warren’s median household income is not only far behind that found in the state of Ohio, it is lower than those in Mississippi, Alabama and West Virginia, the three lowest income states in the Union.mississippi.001

Comparing a city like Warren to any state is not an apples-to-apples comparison, but it probably means more to most people than looking at the numbers for some random small cities you’ve never heard of in far away states.

If you want to know why Warren leads the nation in Dollar Stores per capita, one only need to look at our income numbers and trend.

Next: Home values

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2 + 2 = 3

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workforce.001What do you get when you add an older population to a poorly educated population? You get very low levels of workforce participation. The chart on this page shows the percentage of the population, over the age of 16, who are active in the workforce, for Warren, nine other Ohio cities, and for the U.S. as a whole.

Just under half of our population is working. I probably looked at 20 Ohio cities and Warren’s was the lowest participation number I saw. I selected these cities as examples of some comparably sized cities, plus a few that are larger larger.

The U.S. participation rate of 63.7% is 28% greater than the Warren number. It is particularly painful to report that Massillon is nearly at the national index and far ahead of Warren. We even lag behind Youngstown, which, believe me, is no demographer’s dream city.

Lower workforce participation means not only lower tax receipts, but lower retail spending as well.

Next: Income

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Back to school

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Untitled3.001The education level of Warren’s population is a little like the age issue. Taken just as the overall median, we are 2.4 percentage points below the national composition of 86.7% of the population having at least a high school diploma, and this is a big improvement since 1990 when we were more than 7 percentage points behind.

But it is important to look deeper, which, unfortunately, reveals that Warren’s youngest residents have fallen very far behind the nation. The gap is nearly 10 full points in the 18-24 age group, and 7.6 points in the 25-34 group. Statistically, these are enormous gaps.

Untitled.001Why is this? Again, the census provides no answers, but I think it is safe to say that we did not suddenly start producing less motivated students 30 years ago; it is far more likely that the gap is there because so many of our high school graduates leave Warren at an early age to look for opportunity.

This brain drain is no doubt part of the reason we fall even farther behind when the bar is raised to look at the composition of our population who are college graduates. Warren’s residents are less than 40% as likely to be college graduates compared to the national average. And unfortunately, in this category we are falling farther behind as times goes on, rather than catching up. If the good jobs of the future are truly reserved for the better educated, we are very poorly positioned for the future.Untitled2.001

A recent article in the New York Times by J.D. Vance, who wrote the current best seller, “Hillbilly Elegy” talks about this phenomena, which is another story I heard countless times when I was knocking on doors. So many older people were proud to tell me how well their sons and daughters are doing in Arizona or South Carolina, but there was always a note of sadness in their voices because their children, and grandchildren, are so far away and they know they are never coming back.

Next: Workforce participation

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Warren: The Gray Garden

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age1.001When you look at the first chart in this post (right) it appears that Warren tracks the national median age pretty closely. We are a little older (38.5 v 37.6 years), but not much. Digging a little deeper reveals the important insight.

The second chart (below) segments the population by age groups. We hold on to people < 20 years of age; they represent 26% of Warren’s population, the same as the country as a whole. But once people hit 25 we start losing them. The Census data can’t tell us why that is, but most people would agree that this is about the time many people give up on Warren and move elsewhere in search of opportunity.

age2.001This shortfall holds all the way up to the age of 60 — the prime working years for most people. These are also the prime years for marriage and having children, which is necessary to replace those who die. We aren’t keeping up, which is part of the reason Warren continues to shrink.

People in this age group are also the biggest spenders. They form families, buy houses, furniture, children’s clothes and toys. They buy minivans and SUVs. These are the people most prized by marketers. If you want to know why we don’t have a Trader Joe’s in Warren, here is half the reason. It isn’t just a matter of income.

The differential in the mix of people 25-60 between Warren and the U.S. is enormous. A nine percentage point lag sticks out as a large red flag.

Unfortunately, the age mix is also a major factor companies look at when considering a potential new location for a business. They want to know if the available workforce is adequate to the task, and we do not present an ideal profile. In this case, younger is better.

Next up: Education

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Where did everyone go?

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population.001Any discussion of Warren’s demographics has to begin with the severe drop in population we have experienced since 1970. The chart to the right show both Warren’s population, and the population of the United States, expressed as an index over time. Both have an index of 100 for the year 1970 when Warren’s population was about 63,500. By 2015 our population had dropped to 40,700 — a loss of 36% in 45 years.

During that same period the population of the United States rose from about 203 million to more than 316 million, an increase of 56%. So Warren has become a much smaller slice of a much bigger pie. (More on that later.)

Warren was hardly alone in suffering such a population loss, especially among Midwestern, industrial cities. Detroit lost more than half of its population in the same period, as did nearby Youngstown. But their worse misfortune doesn’t help us.

The point is that every one of those 23,000 who used to live here, but no longer do, represents a job that no longer exists, taxes no longer paid, a house with no occupant, a store with fewer shoppers, a town with less talent and energy.

Some will say, “well, a lot of those people just moved to Howland or Cortland or Champion.” And they are correct, but many of them took their business or their law or medical practice with them; which means they no longer pay taxes here and have even less reason to shop here. That’s money lost to pay for government services.

Unfortunately, the government services don’t necessarily shrink in proportion to the population. We have 185 miles of city streets that must be paved, plowed and patrolled, just as we did 50 years ago. The WPD and the WFD must cover the same geography as they did back in the day.

Unfortunately the pace of population change has not lessened. Warren loses about 10 people per week; that’s 500 people per year or more than 1% of the total population. And as the U.S. continues to grow, we look smaller and smaller to both the State and Federal governments, and become less likely to receive help.

In fact Warren is already too small to receive traditional HUD-CDBG grants but is grandfathered into the program for about $1.5 million per year, although the first Trump budget may eliminate the program altogether.

Next up: Our aging population.

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