U.S. Population Growth in Metro Areas Linked to Jobs, Federal Spending

by Mark Mather, associate vice president, Domestic Programs

The Census Bureau released new data today showing rapid population growth in some unlikely places. Many parts of the Midwest have been losing population for decades, but there are new pockets of growth emerging in the Great Plains, in an area stretching from North Dakota to Texas, where oil production is booming. Between 2000 and 2010, Midland, Texas ranked 95th in population growth among 381 metropolitan areas. But since 2010, Midland’s population has increased by more than 7 percent, making it one of the fastest-growing metro areas in the country.

Population gains are linked not only to private-sector job growth, but also the availability of government funding. The Washington, D.C. area has a high concentration of federal jobs as well as private-sector businesses that rely heavily on government contracts. Between 2010 to 2012, the U.S. population increased just 1.5 percent, while the population in the Washington, D.C. Metro Area increased by 4.2 percent. Federal spending has also helped keep the unemployment rate in the Washington, D.C. area relatively low (at around 5 percent).

The same phenomenon is occurring in other cities, but on a smaller scale. Many of the fastest-growing metro areas since 2010 have been those that rely heavily on federal dollars. The fastest-growing metropolitan areas between 2000 and 2010 received $5,336 in federal funds per capita (see table). In contrast, the fastest-growing metro areas from 2011-2012 received $8,165 in federal funds per capita—a 53 percent increase.

Federal Spending Per Capita in the Fastest-Growing U.S. Metros

Source: U.S. Census Bureau, Population Estimates Program, and State and Metropolitan Area Data Book: 2010.

This increase in federal funds per capita reflects the changing characteristics of the country’s fastest-growing metro areas. Included in the new list of fast-growing metros is Clarksville Tennessee, which neighbors the Fort Campbell Army Base, Crestview, FL (Eglin Air Force Base), Jacksonville, NC (Camp Lejeune Marine Corps Base), and Columbus, GA (Fort Benning Army Post). Recent population growth in some of these areas is linked to the federal government’s Base Realignment and Closure Initiative (BRAC), which is reorganizing and consolidating military bases around the country. However, federal investment in metro areas is not limited to the military. For example, the Kennewick-Richland Metro Area in Washington is growing rapidly and receives federal funds to help clean up the Hanford nuclear site.

Military downsizing and other cutbacks in federal spending could reduce future economic and population growth in areas that rely on federal funds. These areas may need to find new sources of revenue from the private sector or state and local government to support future growth.

Diana Lavery, research associate at PRB, assisted with data analysis for this blog.

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