Kentucky `Micro Area' Wages War on Vestiges of Recession

(Bloomberg) -- Local leaders are fighting back in London, Kentucky, after the recession sent unemployment soaring above 10 percent -- trampling income growth.

The rich/poor gap in the London region contracted by $9,400 between 2011 and 2016 to $108,800, the sharpest contraction among a Bloomberg News ranking of the one hundred largest U.S. micropolitan areas for places with an urban core between 10,000 and 50,000 people.

The rich/poor gap measures the difference in annual income between households in the top 20 percent and those in the bottom 20 percent.

Kentucky’s London micropolitan area is surrounded by rural coalfields. When the mines shut down, the engineers and managers left town, depleting white collar ranks and tightening the rich/poor gap. Seven of 91 micro areas with data also experienced a narrowing, including Branson, Missouri; Eureka, California; and Frankfort, Kentucky. Nine micro areas lacked 2011 data for a meaningful comparison.

For local leaders like Paula Thompson, executive director of the London-Laurel County Industrial Development Authority, it was a dark time. “The phone never rang,” she said.

That changed as the national recovery took hold and London aggressively lobbied industries outside of coal, promoting among other things it’s location along busy Interstate 75, a highway Thompson calls “an absolute lifeline.”

Today, the region is home to six calling centers as well as industrial bakeries and food plants and auto parts manufacturers, Thompson said.

Staffing up wasn’t a problem as unemployed miners and others in impoverished outlying communities started commuting to jobs in the London micropolitan area -- a development that bodes well for reversing the income gap.

Over the survey period, the annual unemployment rate in Laurel County dropped from 11.5 percent in 2011 to 6.1 percent at the end of 2016, according to the U.S. Bureau of Labor Statistics. On a monthly basis, it was down to 4.9 percent at the start of 2018, the data show.

At the top of the micropolitan list, is the Minot, North Dakota, where the rich/poor gap among its 75,000 or so residents widened by $42,800 between 2011 and 2016 to $169,200.

Minot is billed as the “gateway to the energy-rick Bakken region” by the Minot Area Development Corporation as well as a logistics and agricultural hub. It’s also the site of a U.S. Air Force base and home to “a strong labor force of young professionals,” said Stephanie Hoffart, the development corporation’s executive director. The median age in Minot city was 31.9 years in 2016, according to Census data.

The divergence between the rich and poor was widest of all micropolitan areas in Key West, Florida; Glenwood Springs, Colorado; and Torrington, Connecticut -- each exceeding $200,000.

Read More: Widening Socioeconomic Gaps in Micro Areas 2011-2016

To contact the reporters on this story: Vincent Del Giudice in Denver at vdelgiudice@bloomberg.net, Wei Lu in New York at wlu30@bloomberg.net.

To contact the editor responsible for this story: Alex Tanzi at atanzi@bloomberg.net.

©2018 Bloomberg L.P.