The increase in median household income in Missoula last year landed the city fifth among the nation’s metros, just behind Jonesboro, Arkansas, and Laredo, Texas, according to information released by the U.S. Census Bureau.
Montana as a whole had the nation’s fastest growth in household median income, according to the data, outpacing California, ranked third, and Washington, ranked fifth.
“Montana’s wages are probably the number one reason why our household median income has increased so much,” Barb Wagner, the state’s chief economist, told the Missoula Current on Wednesday. “We’ve had very strong wage growth in the state over the past 10 years – we’re the fourth fastest growing state in the nation for wage growth.”
Last year, the average Montana wage ticked up 3.2 percent, helping drive gains in the state’s household median income, which now stands at $53,386, according to Census data.
While wages are the primary driver for gains in household income, Wagner said, other factors are at play, including income earned from retirement, investments and business ownership.
“All of that means these other types of income, specifically business income, is a very important component to our overall income picture in Montana,” Wagner said. “That entrepreneurial income has been increasing over the last few years as well.”
Despite the high marks, Montana’s average wage in 2017 was just $42,050, placing it near the bottom nationally – a trend that began more than half a century ago.
Wagner said Montana’s wages were fairly competitive with the national average until around 1950, when it began a steady decline. Not until the turn of the 21st century did it show signs of reversing course, she said.
“It was a 50-year time frame that saw us go from average to below average,” Wagner said. “Now we’ve had 17 years where the trend has reversed itself, and since the recession, Montana has had stronger wage growth than the rest of the nation. We’ve reversed the trend, and getting back to more equality with national wages, though we’re not quite there yet.”
In Missoula, new Census data places the city’s median household income at $54,311. That’s an increase of 4.7 percent and 2.5 times the national average of 1.8 percent.
Missoula Mayor John Engen was encouraged by the latest figures.
“When we invest in quality of life, education, public safety and transportation, we see results,” Engen said. “When we’re intentional in our planning and organization, we see results. A decade of intentional work to make Missoula a great place to live and do business is paying off.”
Missoula, like the rest of Montana, has diversified its economy over the last 17 years. The city was hard hit by the closing of several mills and a shift away from an economy reliant on resource extraction.
But growth in business ownership and entrepreneurial activity has helped the transition, Wagner said.
“That’s very good for our state, because it makes us more able to turn in consistent returns,” Wagner said. “Still, the state is influenced by changes in global energy and agricultural markets, but we’ve made a lot of progress in the last 20 years diversifying our economy, which helps stabilize us during downturns and adds more tools to our tool box to make sure our state has economic prosperity.”