- Q&A
With its western half nestled in the Allegheny National Forest, McKean County bills itself as a fisherman's dream and a hunter's paradise. It is home to Zippo lighters. And about a century ago, it was known as the "High-grade Oil Metropolis of the World."
Now, this county, located along the New York border in northwestern Pennsylvania, distinguishes itself in another way: its million-dollar wage earners, on average, brought home bigger paychecks than the million-dollar earners in 53 other Pennsylvania counties.
Fourteen counties had 10 or fewer million-dollar earners living in their borders. Data was not made available for those counties by the state Department of Revenue to prevent disclosure of individual tax return information. But what is apparent from the data that was shared is there was at least one million-dollar earner in every Pennsylvania county in 2011, the most recent year for which data was available.
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Why the sudden increase in wealth?
Well, the folks who spend their days spurring economic development in McKean say oil and timber are a big part of the story behind their moneyed elite. So is Zippo. But they say the natural gas boom that has led to increased wealth in nearby counties in the Marcellus shale region is not as much a factor in McKean.
Uneven income growth
Between 2009 and 2011, the number of people making $1 million or more in all 67 Pennsylvania counties rose by 25 percent, to 12,465.
The average taxable earnings of those in this top income bracket rose by 37 percent during that post-recessionary period — a time when the state’s non-million-dollar earners’ income grew by a mere 4.5 percent. Neither figure is adjusted for inflation.
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Note: Counties that are colored in white have fewer than 10 people who earned a million dollars or more. Data on average wages is not available for those counties.
This trend in the wealth pattern where the rich get richer and the less rich not so much is reflective of the income pattern across the nation, said Mark Price, a labor economist for the Harrisburg-based Keystone Research Center, a liberal-leaning policy center.
He co-authored a report on income inequality across the country for the Economic Policy Institute of Washington, D.C., that was released today.
It shows this trend, where the higher your income the more income growth you experience, has been the norm in Pennsylvania since about 1980 when the report says employers nationally became more openly hostile to union organizing among their employees. But the report indicates that trend is opposite from what occurred between 1947 and 1980 when the income growth was more evenly distributed, Price said.
What’s feeding this trend is a matter of intense debate.
Price attributes it to an erosion of the purchasing power of the minimum wage and the absence of bargaining powers to drive up wages from a decline in union membership.
On the other end of the income spectrum, Price said an increasing number of executives, particularly those in the financial services industry, are pulling in big-dollar incomes. That, in turn, has had the effect of pulling up the salaries of other CEOs who manage large organizations in the private and public sector.
“There’s been a slow upward march of their incomes while other things in the economy have changed that hurt the low- and middle-income families whose income has lost ground or tracked along with inflation or stagnated,” Price said.
Elizabeth Stelle, a senior policy analyst for the conservative-leaning Commonwealth Foundation in Harrisburg, has a different theory for the rich faring better than the bulk of Pennsylvanians.
“I think we’re seeing the rich are working around the system where those who don’t have the resources or the time or money to hire people to figure out how to make things work are really the ones who got left behind,” she said.
Nevertheless, she noted per-capita income growth for all Pennsylvanians is growing. From 2001 to 2012, per-capita income grew by 49 percent, but breaking out the growth for the post-recessionary period of 2008 to 2012, the growth fell under 6 percent.
“That is a warning sign that we need to change course,” Stelle said. “I think the answer here is to cut back on some of the government spending that is, in turn, taking more wealth out of Pennsylvanians’ paychecks.”
Wealth has its advantages
The counties that are home to most million-dollar earners are the suburban Philadelphia counties of Montgomery (2,104) and Chester (1,275) and Allegheny out in the southwest (1,530).
But a fair share of state’s million-dollar earners in 2011, 1,561 to be exact, reside outside of Pennsylvania borders. Their average earnings were $3,669,920.
Yet, most Pennsylvanians will probably be surprised to see how many million-dollar earners there are in their county and how in many instances, their incomes are growing in comparison to the average non-million-dollar earners as shown in the map at the top of this story.
Some folks in McKean County were.
Stephanie Schafer, marketing director at the luxurious hideaway resort, the Lodge at Glendorn in Bradford, where rooms go for $450 a night and up, said not a lot of the resort's clientele comes from the local area. She was astonished to hear that McKean's million-dollar earners, on average, are so much better off than those elsewhere in the state.
Nathan Muller, vice president of Smethport Chamber of Commerce, said if multi-million-dollar earners are among them in McKean County, they don’t go around bragging about it or showing it off.
“People don’t live ostentatiously up here,” he said.
But Bradford Area Chamber of Commerce’s executive director Roy Orris said the wealthy residents in his community make themselves pretty visible through their generous acts.
Take Zippo’s owner George Duke, for example. He gave a community organization that helps children with disabilities $1 million to build a new facility. Then when the local hospital’s boiler went out, he gave them $750,000 to replace it. The town’s Christmas decorations looked shabby, a $30,000 check from Duke’s mom and aunt took care of that.
Beyond those with ties to Zippo, Orris said the county still has a lot of oil people living there making money off its oil-rich land and they are generous with their wealth as well.
“We may have only 18 millionaires but I would say those people really look after the county,” Orris said. “They are always there to help when something needs to be done.”
So he said being home to the state’s wealthiest has its advantages that are far more meaningful than bragging rights.
*Staff writer Nick Malawskey contributed the graphics.