Deindustrialization is a phenomenon that hit the U.S. particularly hard in the years after 1950. Cities across the Northeast and Midwest hemorrhaged manufacturing and related industrial businesses, and as the jobs disappeared, so did much of the population. But in recent years, many former industrially dominated cities have been making a comeback — and bringing much wealth with them.
GOBankingRates conducted a study to determine which cities have seen the biggest increase in wealth and wealthy residents by analyzing more than 6,000 cities. The main criteria were the growth in top-earning households over a five-year period and since 2000, using U.S. Census data, as well as economic data on changes in employment by industry. Read on to find out which former industrial cities are drawing the wealthy to them.
Kalamazoo has seen the number and percentage of top-earning households more or less double since 2000. Households earning $100,000 to $149,999 rose from 1,305 to 2,121; those earning $150,000 to $199,999 rose from 316 to 675; and those earning $200,000 or more from 374 to 851 households. As these wealthier households have appeared, those on the other end have been declining. Households earning $15,000 to $24,999 once made up nearly 17 percent of households, but is now down to 13 percent; those earning less than $10,000 dropped from 15.4 percent down to 11.6 percent.
There were quite a few booming industries in Kalamazoo in the past, especially the paper industry. However, the industry began to decline, which some attribute to the environmental movement in the 1970s.
In recent years, Kalamazoo has been experiencing a major turnaround — just not in the paper industry. A big part of this transformation has been the Local Initiatives Support Corporation (LISC). LISC has poured an estimated $19 million into the area, with projects ranging from resident-led home repair and a farmer’s market to affordable housing and state-of-the-art facilities at Kalamazoo Valley Community College (KVCC). LISC’s contribution to the health care center alone included $8.5 million in tax credits. Interest in all these improvements has attracted another $193 million in public and private development, according to Next City.
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For years Bethlehem was one of America’s premier industrial cities, with companies like Bethlehem Steel once an employment giant in the greater Philadelphia region. The company prospered for years, especially thanks to military orders during World War I and World War II. Despite major attempts to diversify the company during the 1970s, however, Bethlehem Steel declined. In 2001, the company filed for bankruptcy and was dissolved two years later.
The closure of the huge Bethlehem Steel plant in 1995 was a major blow to the city. But fairly quickly, Bethlehem filled the void with diverse businesses, transforming the abandoned factory into a casino, entertainment center and cultural campus.
In the meantime, wealthy households have risen markedly. Back in 2000, only 371, or 1.3 percent of households, earned $150,000 to $199,999. Now, more than 1,200 households earn $150,000 to $199,999, accounting for 4.2 percent of all households.
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Manufacturing is still a feature of Hayward, but its dominance has receded over the years. A major, old-school industry centered on the Hunt Brothers Cannery, which employed thousands of both full-time and seasonal workers for almost a century. Twenty years after its closing in 1981, the former industrial area was approved for housing development.
The manufacturing industry once employed 10,299 people in Hayward, back in 2000, accounting for more than 16 percent of the labor force. By 2017, that had dropped down to a little over 11 percent. Meanwhile, educational, health and social services employment has really shot up, from 9,269 people representing 14.6 percent of the labor force in 2000 to 16,244 people representing 20.4 percent.
The proportion of owner-occupied homes earning $150,000 or more saw a significant increase in Hayward over the years. Five years ago, households earning $150,000 or more accounted for 16.8 percent of owner-occupied housing units. Five years later, that percentage had jumped to 25.8 percent, meaning more than a quarter of owner-occupiers bring in at least $150,000 in Hayward.
Hoboken is one of a couple of industrial cities whose bread-and-butter used to be shipbuilding. Indeed, stories of corruption and crime along Hoboken’s waterfront inspired the creation of one of Hollywood’s most critically-acclaimed films, “On the Waterfront” starring Marlon Brando. On top of that, Hoboken also was home to manufacturing and production businesses such as Lipton Tea and Maxwell House Coffee.
With the emergence of air travel and container ships in the 1950s and 1960s, Hoboken’s waterfront and shipbuilding declined. Fortunately, in the years since, Hoboken developed into a commuter city providing homes for people working in New York City. A major development that helped Hoboken emerge out of the morass of deindustrialization is real estate. According to “The Deindustrialized World,” Hoboken received a big boost by providing real estate for information-industry based businesses, resulting in an estimated 12,000 jobs in the publishing trade.
The number of top-earning households has boomed since the turn-of-the-millennium. The number of households earning $150,000 to $199,999 jumped from 1,211 in 2000 (6.2 percent), to 3,056 in 2017 (12.3 percent). The growth in $200,000-plus earners is much greater. From 1,316 households (6.8 percent) in 2000, the number of households earning $200,000 or more soared to 7,596 households (30.6 percent).
Minneapolis used to be a bigger city back in the day. In 1950, the U.S. Census reported the population as 521,718, compared to a current population of 422,331. The good news is the population is on the upswing after peaking in 1950.
Minneapolis previously had a variety of heavy industry and production businesses. For nearly 50 years beginning in 1880, Minneapolis was known as the “Flour Milling Capital of the World,” before it began its long decline around 1920. More and more flour milling businesses left Minneapolis, leading to the Washburn A Mill closing in 1965, and the Pillsbury A Mill finally shut down in 2003. But like a handful of other industrial cities, including Pittsburgh and Raleigh, Minneapolis has revived its economy thanks to its top-ranked universities; collaboration between campus labs, startups and large businesses; and coordination between government, private and education sectors.
Minneapolis’ manufacturing industry fell from 10.8 percent of the labor force in 2000, to 8.6 percent by 2017. Minneapolis is home to several prominent colleges, including the University of Minnesota – Twin Cities, as well as the world’s No. 1 health technology cluster. Over the years since 2000, educational, health and social services gained significantly, employing 63,507 people and more than a quarter of the workforce.
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Quincy has been undergoing redevelopment and diversification. Shipbuilding for a long time was a substantial industry, and the city’s former Fore River Shipyard built its first ship in 1904 for the U.S. Navy. But by 1986, the industry had declined and the 20-year-long tenant General Dynamics closed operations at the shipyard, unable to make it financially successful.
Other industries emerged since then, creating a much broader economy and attracting greater wealth. For instance, educational and health services went from employing 9,596 people in 2000, up to 13,217 by 2017, accounting for about a quarter of the workforce. Professional, scientific and management services also grew, from 11.8 percent to just more than 15 percent of the labor force.
Meanwhile, the number of top-earning households has soared. In 2000, only 914 (2.4 percent of households) earned $150,000 to $199,999, and 622 (1.6 percent of households) earned $200,000 or more. By 2017, those figures had jumped to 3,441 (8.6 percent of households) and 2,808 (7.1 percent), respectively.
Cambridge has long been home to high-caliber schools such as Harvard University and Massachusetts Institute of Technology. But it also used to be far more industrial before most of its manufacturing industry declined by the late 20th century. In its place, various tech-related businesses such as software, electronics and biotechnology emerged.
The growth of wealth in Cambridge is readily apparent in the increase in high-earning households. Back in 2007, households earning $150,000 or more accounted for 28.2 percent of owner-occupied housing. Though large, by 2012 that percentage had jumped to 36.6 percent, and then by 2017, a full 43.8 percent of owner-occupied housing were earning $150,000 or more.
Situated on San Francisco Bay, Oakland emerged as a prominent industrial city thanks in large part to the Port of Oakland, one of the busiest ports in the world. This made Oakland an appealing spot for heavy industry, which could import supplies and export products. However, during the 1980s and 1990s, Oakland suffered from several plant closures, including General Electric, National Lead, Gerber Products and Transamerican Delaval, its largest manufacturing plant.
With the technology boom of the late 1990s and the Bay Area’s location next to Silicon Valley, Oakland began to attract new high-tech businesses. The growth in wealthy residents in Oakland is staggering. In 2000, households earning $200,000 or more made up only 3 percent of the city, 4,473 households out of 150,971 in total. By 2017, that had quadrupled to 16,519, or 10.4 percent of households.
Over that same period, the manufacturing industry fell relatively and absolutely, from 8.9 percent and 15,507 workers, down to 6.4 percent and 13,633 workers.
Oregon City, Ore.
Oregon City, located along the Willamette River, made its name as a timber and logging industrial city. Directly connected to this was the paper industry, which operated several paper mills turning wood pulp into paper. Beginning in the 1980s, the logging industry in the Pacific Northwest started declining, affecting the paper industry as well. After 128 years, Oregon City’s oldest and last remaining industrial business, West Linn Paper company, closed down in 2017.
The increase in wealthy households has been very substantial in Oregon City. At the turn of the millennium, only 63 households — or 0.7 percent — earned $200,000 or more. By 2012, that number had more than doubled to 175 $200,000-earning households, or 1.5 percent of households. Five years later, the number of top-earners doubled again, reaching 416 households or 3.2 percent of all households. At the same time, households earning $100,000 to $149,999 soared from just 6.3 percent in 2000, to 20.2 percent by 2017.
Odessa is an interesting case because it does have a significant primary industry, namely the oil and gas industry. However, in recent years, Odessa has diversified a lot, enabling its economy to recover from sharp downturns in 2014-2015 and pushing revenue back into the general economy, rather than solely back into oil and gas industry, according to the Midland Reporter-Telegram.
As diversification has progressed, the manufacturing industry has declined in its centrality. In 2000, manufacturing employed 3,817 people, comprising 10.1 percent of the workforce. By 2017, the manufacturing labor force was down to 3,094, but more importantly, now accounts for just 5.5 percent of the civilian labor force.
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In the past, manufacturing played a much more central role in providing employment. In the 1930s, the poultry industry, specifically the production of chicken broilers, began to take off. In the aftermath of World War II, the poultry industry was joined by plants operated by the likes of Kraft, Farm Bureau Poultry Processing, the Bentonville Casting Company, Wendt-Sonis and Munsingwear Incorporated.
Back in 2000, 14.3 percent of the labor force was employed in manufacturing, the second highest percentage behind only retail trade. By 2017, manufacturing’s share of employment was down by nearly half, to 7.5 percent. Bentonville is notable for being the corporate headquarters of Walmart. Besides bringing executives and other employees to the city, the presence of such a prominent corporation stimulates the region in general.
The influx of wealth can be seen in the growth of owner-occupied housing. Ten years ago, owned households earning $150,000 or more comprised just under 16 percent of owner-occupied housing. Ten years later, that percentage had grown to 30.9 percent, making households that earn $150,000 or more the largest proportion of owner-occupied homes.
Midland’s experience has been very similar to Odessa’s. Like that city, the energy industry — namely, oil and gas — is a crucial pillar of Midland’s economy today. But thanks to diversification, the city is undergoing an economic boom, distancing itself from over-dependence and the downturn in 2014-2015 caused by falling oil prices.
Top-earning households have exploded over the years since 2000. That year, only 894 households earned $150,000 to $199,999, and 797 earned $200,000 or more. By 2017, those figures had quadrupled for those earning $150,000 to $199,999 (3,754 households), and increased by six-times for those earning $200,000 or more (5,097 households).
Somerville is near Cambridge and has experienced an even greater influx of wealth and economic diversity. Once nicknamed “Slummerville,” according to Fast Company, several of Somerville’s former industrial sites are prime for redevelopment and Mayor Joe Curtatone has been cultivating the growth in tech firms.
With its proximity to Boston’s many universities and their supporting hospital systems, educational, healthcare and social services have increased employment substantially. In 2000, it accounted for a little over a quarter of the labor force. By 2017, the education and healthcare industries accounted for close to a third.
Once again, the increase in wealthy households is remarkable. From 684 households earning $150,000 to $199,999 in 2000 (2.2 percent), Somerville now boasts 3,574 households (11 percent). Households earning $200,000 or more ballooned from 503 (1.6 percent) to 3,515 households (10.8 percent).
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Methodology: GOBankingRates analyzed more than 6,000 U.S. cities using data sourced from the U.S. Census Bureau’s 2017 American Community Survey along the following factors: (1) five-year increase in the percentage of households earning $100,000 to $149,999; (2) five-year increase in the percentage of households earning $150,000 to $199,999; (3) five-year increase in the percentage of households earning $200,000 or more; (4) five-year increase in median household income. In order to be considered, cities had to have a minimum population of 25,000.
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