Unless you're one of the 1%... OK, one of the 20%... you're better off in Norfolk and New York.
Dr. James V. Koch, a professor of economics and former president of Old Dominion University, is back in the news yet again, this time for making the seemingly outrageous observation that Hampton Roads is more affluent than New York City.
A few years ago, when he first discovered Hampton Roads’ relative affluence compared with New York, he told the Virginian-Pilot, he tried to interest a New York Times reporter in writing about it. The reporter declined, saying, “No one will believe it.”
Among cities in South Hampton Roads, the median household income in 2010 ranged from $42,700 in Norfolk to $67,900 in Chesapeake, according to the 13th annual State of the Region report, which Koch edited. That’s roughly comparable to $55,600 median income for New York City. (“Median” is the level at which half the population falls above that level and half above. It is not the same as the “average” or “mean,” which is skewed upward in New York by a small number of super-wealthy households.)
If you adjust incomes for the cost of living, it’s not even close: Hampton Roads stomps the Big Apple. The adjusted median is $51,600 versus $40,600. (The national, cost of living-adjusted average is $51,900.)
“This is a result that might astonish the typical Gotham resident, to say nothing of The New York Times,” write Koch, “for it directly implies that the typical (50th percentile) household in our region is significantly better off, economically speaking, than the typical household in the New York metropolitan region.”
Hampton Roads has a broader middle-class than New York, with fewer poor people and fewer rich. The percentage of households making less than $25,000 a year is 18.4% in Hampton Roads compared to 25.9% in NYC. Likewise, the percentage of households making $200,000 or more is 3.2% in Tidewater compared to 7.4% in New York.
A certain amount of income inequality is good, Koch says — high incomes are associated with wealth creation. That suggests there is a lot more wealth creation occurring in New York than in Hampton Roads. On the other hand, he noted, large gaps in income equality can undermine social cohesion, instill resentment and increase violence.
Writes the econ professor: “A small number of high incomes can push up the average income and, unless we look at the entire distribution of income, distort judgments about which state or region actually has the largest proportion of prosperous citizens. ”
Admittedly, New York City has sports teams, restaurants, museums and other cultural amenities that Hampton Roads lacks. Still, Koch says, “It is easy to support the assertion that the typical household in our region is better off, economically speaking, than the typical households in the New York City area.”
Lest those numbers “go to our heads,” Koch reminds his readers than median household income adjusted for the cost of living is 6.9% below that of Richmond and 34.3% below that of Northern Virginia. At least Hampton Roadsters can console themselves that their incomes are more equally distributed than those other areas, too.
— JAB
