SILVER SPRING, MD – Median household incomes in Montgomery County dropped 4.8 percent in the last few years, reflecting the impacts of the worst national recession in decades, according to the U.S. Census Bureau’s 2010 American Community Survey.
Yet, Montgomery County, with a median income of $89,155 in 2010, continues to see relatively high wealth and has the second highest household income in Maryland behind Howard County.
Throughout most of the last decade, Montgomery County retained its high income status. The county’s median household income peaked in 2007 at $96,422, in inflation-adjusted dollars, and remained relatively unchanged through 2009. Its stability throughout most of the decade shows resiliency as other areas declined economically starting mid-decade. But between 2009 and 2010, the county’s median income dropped more than $7,000.
Fairfax County, Va., to which Montgomery County is often compared because of its size and proximity to Washington, D.C., also saw household incomes peak in 2007. Fairfax County’s median income has been more than $100,000 for the last decade. However, while Montgomery County retained its household wealth into 2009, Fairfax’s median income began declining annually as soon as the recession hit; since 2007, median income in both counties dropped from their peaks – a 7.5 percent decline in Montgomery County, 6.6 percent in Fairfax.
The American Community Survey takes a comprehensive look at economic, social and demographic trends. Demographers at the Planning Department analyze Census data to better understand community needs as Montgomery County changes from decade to decade.
Montgomery County is not alone in seeing declining incomes. The Wall Street Journal reported that the top 10 highest-earning U.S. cities saw median incomes fall an average of 6.5 percent in the decade. Overall, the Washington region, including Loudoun, Fairfax, Prince William, Howard, and Montgomery counties, ranks as the wealthiest of 1 million-plus metropolitan areas.
Montgomery County’s population grew 11.3 percent in the decade to 971,777 residents. In that time, the county saw significant demographic shifts, including growth in the elderly population (more than 12 percent of residents are 65 and older, many with shrinking retirement income) and a significant increase in the number of unemployed young adults. Finally, Montgomery County had the highest rate of attracting foreign-born immigrants, who typically are younger and experience a period of earning less as they become established in a new place.
“Montgomery County continues to attract immigrants and diversify, which positions the county well for future economic recovery,” said Planning Director Rollin Stanley.
Minorities are creating more new businesses in Montgomery County than other groups, and a diverse workforce also is better for businesses, which typically need a range of workers. It can be challenging for wealthy communities to attract large employers because they cannot fill jobs on each end of the spectrum.
The decrease in the county’s household income spans all levels. Households with incomes of $200,000 or higher fell from 16.5 percent in 2007 to 14.9 percent in 2010. Declining incomes for the wealthy likely contributes to swelling public school populations, planners say, because families are pulling children from expensive private schools. Fairfax County had 18 percent of households in 2010 earning more than $200,000.
Meanwhile, families were more likely to become impoverished. In 2007, 2.8 percent of Montgomery County families were identified as living in poverty in 2007; in 2010, that increased to 4.9 percent. The percentage of female-headed households experiencing poverty increased even more, from 9.5 percent in 2007 to 19 percent in 2010. About 5.8 percent of Fairfax County residents live in poverty, with female-headed households making up 14.5 percent.
The Census shows an increase in households renting, from 29 percent in 2006 to 33 percent in 2010. Nearly half of those renter households paid more than $1,500 per month in rent.
The median income drop affirms the need for planners to create more diverse housing options for residents. With declining incomes, some households will opt for more affordable attached housing and multi-family housing. Others will locate nearer to jobs to reduce commuting costs.
Planners are working to develop opportunities for diverse housing in current master plans.