Where is the richest county in the nation in terms of average gross income? For a long time now if you’d have guessed one of the collar counties around the nation’s capitol you’d have been correct. You’d also likely be forgiven for suggesting one of the bedroom communities around the Big Apple in Connecticut and New York. They’re traditional magnets for money. But according to Time Magazine, the latest figures show that wealth has begun to aggregate somewhere new and it’s far, far to the west. One county in Texas is now at the top of the heap and it’s all thanks to a boom in domestic energy exploration.
Ten years ago, you probably could have predicted the richest counties in America, as measured by adjusted gross income. Fairfield County, Conn., topped the list in 2005, followed by Teton County in Wyoming (home of wealthy enclave Jackson Hole), and they were subsequently in the top 5 for the next few years, according to the Transactional Records Access Clearinghouse (TRAC), which collects data from the IRS.
But as of 2015, the most recent year for which data is available, only one of them is still in the top 5: Teton County, where the average adjusted gross income was $248,949. What’s most surprising is that a state that used to never figure in at the top now dominates the top 10 — including the overall #1 spot on the list.
According to TRAC, McMullen County, Texas, which lies in the heart of the Eagle Ford shale patch south of San Antonio, now has the highest average adjusted gross income in the U.S.: $303,717. At #4 is Texas’s Glasscock County ($181,375), which sits in the equally productive Barnett shale patch in West Texas.
That’s pretty remarkable. Two other Texas counties rich in shale oil are also near the top of the list. And as the report indicates, only ten years ago not a single county in Texas was in the top 30. Oh what a difference a few years of drill baby drill can produce.
When you look at locations such as McMullen County, this dominating average gross income isn’t just the result of a few large landowners cashing in on leasing deals. That’s great for those with the resources, but not enough to drive up the overall numbers that far. What we’re seeing here is the secondary benefits of this surge in productivity. More people in the area now have very lucrative jobs working in the industry, driving up their income. And in turn, they buy more houses and luxury goods, creating additional jobs in construction and other sectors. It’s the trickle down theory on steroids.
We’ve seen other such surges around the country. Pennsylvania has been a major benefactor of this type of development, seeing significant increases in average income in areas where fracking has been embraced while their neighbors a few miles to the north in New York continue to endure stagnant job numbers and declining population as people flee the area. But it’s not just the bulls working the oil rigs who are doing better. Just this month the Governor of Pennsylvania announced that the industry was stretching out even further, with new opportunities in petrochemical and plastics manufacturing arising as a direct result of all the resources being developed locally. Just as in Texas, this represents opportunities for greater wealth in a variety of occupations well beyond just the people leasing land to the energy companies.
We’re strengthening our hand in the international market as well. Bloomberg reported this weekend that OPEC’s efforts to counter the surge in American energy production have simply fallen flat, giving us the upper hand for the foreseeable future.
OPEC’s plan to balance the global oil market with production cuts has been derailed by a stronger-than-expected US shale revival, driven by rapid progress, technological advances and higher price expectations. Increased shale activity has caused US crude production to surge by 550,000 barrels per day since OPEC announced in November that it would cut supplies, with production seen rising by 860,000 barrels per day by the end of this year, according to the Energy Information Administration.
This is the type of surging economic activity which is the only real path to returned prosperity in America. It doesn’t come from some sort of short term sugar high produced by government intervention and “stimulation” via taxpayer funded giveaways. It’s sustainable growth which produces actual wealth and adds to the GDP. And it creates wealth for individuals as well, returning economic power to the rest of the country rather than concentrating it around the Beltway. It’s just a shame that you don’t hear the critics on CNN and MSNBC admitting it.