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Chart: A small Texas oil city has richer households than New York

When we think about the economy of a modern city, we generally think about services: if you want to get really rich, stop making things, start consulting and move some money around. This is why, when the Globalisation & World Cities Research Network publishes its annual list of “global cities”, their most important criterion is the volume of business services operating there.

This is fair enough, as far as it goes – but there are other ways to get rich, too. This chart compares the median household incomes of two service-led cities, New York and San Francisco, with three oil-led ones. Historically, the latter have had consistently lower-incomes. But over the last couple of years, the tiny Texan city of Midland has started to get very, very rich. 

Median annual household income in oil metro areas (Midland, Houson, Dallas) and service metro areas (New York, San Francisco). Source: CityMetric Intelligence.

You’ve probably never heard of Midland, a city in Western Texas with a population of just 120,000. At some point in 2013, however, its average household income surpassed that of New York City. Forbes estimates that between 2010 and 2014, its median income climbed from $53,965 to $69,610: an increase of 29 per cent in just four years.

Midland has two things to thank for the surge in incomes. One is the Permian Basin, one of North America’s largest oil reserves; the other is the controversial process of fracking – using high pressure liquids to shake oil and gas free from the rockface – which has freed up thousands of gallons in an area once thought exhausted.

As a result of this, Midland is also the US’s fastest-growing metro area: the most recent census data shows a population increase of 4.6 per cent in a single year. In the great tradition of the rising American metropolis, the city is now considering investing in a 50-storey building, the Energy Tower, to show off its newfound wealth; at the moment its tallest structure is the Bank of America building, which stands at 24 storeys.  

Of course, Midland is a great deal smaller than New York, so adding a relatively small number of highly paid jobs can more easily move the median. That’s not possible in a city of 10m people.

In New York, indeed, income varies wildly, depending on which part of town you’re in. Median household income in Manhattan is $66,739; in Brooklyn, it’s just $44,850; in East and Central Harlem, it’s less than $20,000. This colour coded map reflecting 2012 census data gives some idea of the income range:

Source: US Census.

In Midland, there are disparities too – the eastern part of the city has a median income around $27,000 a year, while in the centre there’s an area with a median income closer to $100,000:

Source: US Census.

But Midland has fewer stretches of the ultra-pale colours that cover New York’s poorer districts. Unless someone uncovers oil under Harlem, the Big Apple may not overtake Midland again for some time.
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