Montana has seen a drastic increase in high-income households during the pandemic
Montana has seen by far the largest percentage increase in wealthy households during the pandemic compared to any other state in the United States, according to census data.
Bryce Ward, an economist and consultant from Montana, used data from the American Community Survey and found that between 2019 and 2021, the number of Montana households earning $200,000 or more per year increased by nearly 12 000, or 63%.
There were 18,918 such households before the pandemic in the state. There are now about 30,784.
“The data confirms what many Montanans have already noticed,” Ward wrote on Twitter. “A lot more ‘wealthy’ people live in Montana.”
The next closest states to see such drastic increases were Rhode Island and Vermont at 50% and Utah at 44%. Several states, such as North Dakota, Illinois and California, have seen a decline in wealthy households. In the United States as a whole, it was about 20%.
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In fact, the increase in the number of high-income households in Montana over this two-year period was the largest percentage increase of any state over a two-year period in the past decade. The previous record was Montana in 2011-13 at 59% and Idaho between 2017-19 also at 59%.
“There was kind of inflation and wage growth everywhere, but we have a lot more households earning over $200,000 than other places,” Ward explained. “Given that wages were generally not increasing here any faster than nationally during this period, this suggests to me that some high earners chose to move to Montana at disproportionately high rates during the pandemic. And this corresponds to what many people have observed with their own eyes. »
Essentially, Ward said, the data shows that Montana over the past decade has moved from one of the states with the smallest slices of wealthy households to the middle of the pack.
“In 2011, the share of Montana households earning more than $200,000 was about 2%,” he explained. “Now we are at 6.5%. In 2011, Montana was fifth from the bottom, and now we’re basically the middle state. We have disproportionately increased households at the highest income level compared to other states and the nation as a whole.
Ward said the rise in the number of affluent households is “a common thread running through many conversations” in Montana.
“It’s old Montana versus new Montana,” he said. “There was always money floating around, but over the last decade and especially the last two years it has really increased. Money is powerful in a market society. Things are shaped by these people, and people notice these changes. You see that with the whole Holland Lake discussion.
Ward was referring to a huge public outcry over a plan by the owner of Holland Lake Lodge to partner with a ski resort company to invest big money in improvements.
Montana’s increase in high-income households also coincided with a drastic increase in house prices. Between the last quarter of 2019 and the first quarter of 2022, the median sale price of homes in Montana increased by 41%. In Missoula and Kalispell, that number was 51%.
Home building in Montana has not kept up with demand over the past decade, and especially during the pandemic.
“If I’m a wealthy person or someone with a higher income from out of state, competing for the same house with a local, the out-of-state person may win,” said said Ward. “Then the person who is local feels like they’re being squeezed out. That’s why they’re all mad.
Rising house prices will also lead to higher property values, he noted, and therefore higher property taxes.
Ward said there will be more specific data released later this month that will give an indication of whether all of these new high-income households were people who moved here or people who lived in Montana who started moving here. win more. However, he said, a small sample of data from the 2022 U.S. Social and Economic Supplement shows that the odds of an out-of-state migrant household earning more than $200,000 doubled in 2020 and 2021 compared to compared to the 10 years between 2009 and 2019.
Another indication that it was nonstatutors who drove the increase is that the share of people working from home in Montana more than doubled between 2019 and 2021 and nearly tripled in Missoula, Helena and Billings. More than 15% of workers in Missoula, Bozeman and Kalispell were working from home in 2021.
“I’ll keep investigating, but I don’t think we created a bunch of jobs that paid over $200,000 in Montana,” Ward explained. “What has changed is people’s ability to live in Montana and get a better paying job.”
Along with this, however, was the opportunity for Montanans who were previously underpaid to live here and access better-paying but out-of-state based jobs. That may have pushed up salaries for incumbent Montanese, Ward said.
In July 2022, Kalispell’s Daily Inter Lake newspaper reported that Barb Wagner, the chief economist for the Montana Department of Labor and Industry, found that Montana’s GDP grew at the 7th fastest rate in the world. country in 2021.
“Montana has the 10th fastest growing (wage) state over the past year … and has grown 21% over the past two years,” Wagner said, according to the newspaper.
Before the pandemic, about 40,000 people would move to Montana each year and just under 40,000 would move. But during the pandemic, according to census data, about 45,000 people moved in a year and only about 30,000 people left.
So there hasn’t been a drastic increase in the number of people moving here, but a bit less people are deciding to leave compared to previous years.
Ward said Montana has seen a slow and steady increase in the number of high-income households each year for the past decade, but it jumped sharply once COVID hit.
“The pandemic has just taken us forward and has done so alongside other changes that have put enormous pressure on housing prices, such as historically low interest rates and rising household formation rates. “, did he declare. “And if we also attract people with money from elsewhere, and people don’t leave, that’s how you get a 63% increase in share of high-income households.”