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Shifting Dynamics in Eighth District Cities

By

Ana Hernández Kent
Thursday, December 19, 2019

Was your city more or less populous in 2018 than in 2017? Did it become a more affordable place to live? But what about other characteristics? The St. Louis Fed’s Center for Household Financial Stability took an in-depth look at four Eighth District cities (St. Louis, Little Rock, Ark., Louisville, Ky., and Memphis, Tenn.) to explore how dynamics are shifting.

Had the city, or rather, the county in which the city is located, improved from the previous year? To answer this question I used 15 metrics, including: growth in total population, median income, median rent prices, median housing prices, homeownership rates, poverty rates, food stamp take-up, unemployment rates, health insurance coverage, commute times, racial diversity, share of college graduates and high school graduates, graduates moving into the county, and income inequality.College graduates refer to those with at least a four-year college degree. The census rates in the 2018 American Community Survey were compared to the 2017 rates. Findings are summarized in the table below.

USA St. Louis Memphis Louisville Little Rock
2018 2017 2018 2017 2018 2017 2018 2017 2018
Total population 327,167,434 308,626 302,838 936,961 935,764 771,158 770,517 393,956 392,680
Median Income $61,937 $42,270 $43,889 $50,640 $47,500 $56,145 $55,851 $53,499 $49,613
Median Gross Rent (inflation adj. 2018$) $1,058 $795 $830 $923 $902 $850 $874 $851 $827
Median House Price (inflation adj. 2018$) $229,700 $144,228 $154,800 $151,572 $157,700 $177,888 $182,500 $159,426 $164,700
Homeownership Share 66% 48.1% 48.0% 56.9% 57.0% 65.1% 63.1% 61.0% 61.9%
Poverty Share 11.8% 18.9% 18.5% 15.1% 17.8% 11.7% 13.2% 13.7% 14.0%
Share of Households on SNAP 11.3% 20.9% 18.2% 17.4% 16.3% 12.1% 10.6% 9.0% 10.5%
Income Inequality (GINI) 0.48 0.50 0.51 0.52 0.51 0.47 0.49 0.50 0.52
Unemployment 4.9% 7.0% 6.2% 7.0% 7.9% 5.6% 5.2% 5.1% 4.3%
Share without Health Insurance 8.9% 10.5% 10.4% 10.4% 12.9% 5.2% 5.4% 6.4% 6.9%
Commute Times (in minutes) 27.1 24.1 25.3 22.5 22.8 22.5 22.4 20.3 21.1
Share Four-Year Grads 30.1% 34.5% 35.5% 29.2% 28.8% 31.5% 32.2% 32.2% 31.1%
Share High School Dropout 11.8% 11.8% 10.6% 11.3% 12.3% 9.1% 10.3% 9.8% 10.6%
Grads Moved Into County 2.2% 4.3% 5.1% 1.3% 1.2% 1.8% 1.9% 1.5% 2.3%
Diversity (white share) 60.2% 43.6% 44.1% 35.8% 35.4% 67.5% 66.7% 52.2% 51.9%
SOURCE: American Community Survey 1-year estimates and author’s calculations.
NOTE: Dollar values are Consumer Price Index for all Urban Consumers adjusted to 2018 values.
Bold numbers indicate improvement from the prior year.

St. Louis City

St. Louis city, a city independent from the county, improved on many measures. Even though St. Louis’ population dropped 2%, its median household income increased 3.8% after adjusting for inflation.In this essay, dollars have been inflation adjusted to 2018 values using the Consumer Price Index for All Urban Consumers (CPI-U). In a story that parallels the national narrative, housing increases outpaced incomes. Median house prices rose 7.3% between 2017 and 2018, and median gross rent rose 4.5%. However, house price increases do not seem to have deterred potential homebuyers, as the homeownership rate remained roughly unchanged.

The median income increase in St. Louis outpaced the national increase of 0.64% (this may be related to St. Louis city attracting more college graduates and lowering its unemployment rate).ACS unemployment rate estimates tend to be higher than Current Population Survey and Local Area Unemployment Statistics unemployment estimates. The national ACS unemployment rate in 2018 was 4.9%. While the St. Louis population has decreased overall, the population of four-year college graduates increased by roughly 1,200 individuals between 2017 and 2018. Unsurprisingly, the share of adults who were college graduates also increased to 36%. An increased share of the population responded that they were college grads who had moved into the county in the past year, indicating that St. Louis may be attracting more college graduates than in the recent past.

Overall, St. Louis city improved on most of the metrics and did better than a few national rates.

Memphis

The population in Shelby County, Tenn., (home to Memphis) remained fairly steady. Notably, even though the median house price increased by 4%, median household income fell by more than $3,100 to $47,500. Median gross rent fell slightly, suggesting that renting may be the more affordable option, relative to 2017. Homeownership rates were roughly unchanged.

A greater share of individuals had incomes below the poverty line (up 2.7 percentage points); however, fewer households received food stamps (down 1.1 percentage points). Unemployment rates also increased, and fewer people had health insurance. While commute times increased slightly, they were still well below the national average.

The share of adults with less than a high school education increased, while the share who were four-year college grads slightly decreased, indicating that Memphis’ adult population was less educated in 2018 than in 2017. Racial diversity decreased slightly, but the county was much more diverse than the U.S. as a whole.

Overall, the city also scored less favorably than the U.S. on most measures.

Louisville

The population in Jefferson County, Ky., where Louisville resides, remained essentially unchanged, as did its median household income (dropping $300 after adjusting for inflation). Median rent increased by 2.9% and median house prices similarly increased by 2.6%. Stagnant wages and increased house prices were reflected in a drop in the share of homeowners, which decreased by 2 percentage points.

As with Memphis, the story regarding poverty was mixed. Though a larger share of individuals had incomes below the poverty line, fewer households were on food stamps (this amount dropped below the national rate). The unemployment rate also showed slight improvements. While more residents lacked health insurance than in the previous year, Louisville’s ranking was better than the national rate.

The county saw more racial diversity, as a third of the population was indicated nonwhite. The share of adults with less than a high school education increased; meanwhile, the college graduate share increased to 32.2% (adding an additional 4,600 college graduates). Unsurprisingly, the county also had increased income inequality.The Gini coefficient measures inequality, where 0 indicates perfect equality and 1 indicates perfect inequality. The U.S. Gini coefficient was 0.48 in 2018.

While Louisville’s performance weakened on many metrics from 2017, the city also performed better than the nation on more than half of the measures – housing affordability and educational attainment, in particular.

Little Rock

Pulaski County is home to the largest city in Arkansas – Little Rock. Just like the other counties on this list, its population decreased slightly. Little Rock’s median income also fell a sizeable 7.3%, or nearly $3,900 to $49,600. On the other hand, median house prices increased by 3.3%, while median rent decreased by 2.8%. Similar to Memphis, this suggests renting became more affordable relative to the previous year. Interestingly, the city saw an increase in homeownership rates.

Indicative of increased economic hardship, the share of individuals with incomes below the poverty line increased, as did the share of households on food stamps. However, the unemployment rate decreased and more people had health insurance.

Little Rock’s adult population was less educated in 2018 than in 2017. The share of adults with less than a high school education increased and the college graduate share decreased.

Little Rock decreased on some measures, but it scored better than the national rate on most of these measures, including housing affordability, education and health insurance rates.

Conclusion

From 2017 to 2018, these four Eighth District cities improved on some measures and lost ground on others. Compared to the national rates, all cities had better commute times and cheaper housing (both owning and renting). However, in 2018 these cities also had higher income inequality, lower median household incomes and lower homeownership rates.

Ana H. Kent is a policy analyst for the Center for Household Financial Stability at the Federal Reserve Bank of St. Louis.

Endnotes

  1. College graduates refer to those with at least a four-year college degree.
  2. In this essay, dollars have been inflation adjusted to 2018 values using the Consumer Price Index for All Urban Consumers (CPI-U).
  3. ACS unemployment rate estimates tend to be higher than Current Population Survey and Local Area Unemployment Statistics unemployment estimates. The national ACS unemployment rate in 2018 was 4.9%.
  4. The Gini coefficient measures inequality, where 0 indicates perfect equality and 1 indicates perfect inequality. The U.S. Gini coefficient was 0.48 in 2018.