Geographic Inequality

The Willie Sutton Theory of Marketing is that you “go where the money is.” For those who don’t know the story, Sutton was a famed bank robber in the early to mid-1900s. When interviewed by a newspaper reported, and asked the rather dumb question as to why he chose to rob banks, that was his reported explanation.

It makes sense. Trying to sell to people who can’t afford what you have is a good way to go out of business — as a lot of small businesses are finding out.

Where is the money in the US?

There are 3,142 counties or city-equivalents in the 50 US states plus the District of Columbia. However, 31 of these account for 32.3% of US Gross Domestic Product (GDP). That is, roughly 1/3 of what the US makes is produced in these 31 counties.

Highlights from the newly released 2019 numbers:

  1. Los Angeles County has the largest GDP in the US. The Bureau of Economic Analysis reports GDP for LA County to be $711 billion. That figure places it between Saudi Arabia (18th) and Switzerland (19th) among all countries. (Country data is from the International Monetary Fund, published earlier this year.)
  2. New York County (Manhattan) is second with a reported GDP of $600 billion, roughly the same as the GDP for the State of Ohio. That places Manhattan (and Ohio) between Taiwan (21st) and Poland (22nd).
  3. Cook County (Chicago) is third, with a GDP of $362 billion. That places Chicago in size between South Africa (37th) and the Philippines (38th).
  4. Harris County (Houston) is just behind Chicago at $361 billion, and is larger than the Philippines.
  5. At $316 billion, Santa Clara County, California, is next. Santa Clara is also the fastest growing County in the US in terms of GDP, with a rate exceeding 10%.
  6. King County (Seattle) has a GDP of $277 billion.
  7. Dallas County (Texas) has a GDP of $241 billion.
  8. Orange County (California) has a GDP of $230 billion.
  9. Maricopa County (Arizona) has a GDP of $221 billion.
  10. Rounding out the Top 10 is San Diego County (California) with a GDP of $210 billion.

At the other extreme, the smallest states in the US in terms of GDP are

  • Vermont, $30 billion
  • Wyoming, $38 billion
  • Montana and South Dakota, each at $46 billion
  • North Dakota and Alaska, each at $53 billion
  • Rhode Island, $54 billion
  • Maine, $57 billion
  • Delaware, $63 billion
  • Idaho and West Virginia, each at $71 billion

The GDP for the top three states are

  • California, $2.7 trillion (yes, not billions, but larger)
  • Texas, $1.7 trillion
  • New York, $1.4 trillion

If you combine the numbers for the eleven smaller states listed above, the total GDP is 10% less than for Manhattan.

It’s not clear why many smaller counties exist. There are 23 counties in the US with GDPs of less than $50 million. How the small income base justifies the cost of the government infrastructure isn’t obvious.

Incidentally, the smallest country in the world in terms of current GDP is Tuvalu at $49 million. Tuvalu has a population of less than 12,000. (There are 20 countries for which current GDP estimates aren’t available, including North Korea and Syria.)

Bottom line, production isn’t evenly distributed across the US, and neither are personal wealth, healthcare, education and life expectancy. If you want to live well, you have to think about going where the money is. It’s not going to move to you.



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