Lakewood Finance Task Force. 

June 28, 2017

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Article 3 - Wealth & Income Patterns

In our previous article, we discussed how our community is changing in terms of age and population. In this article, we will discuss the wealth of our residents and how it’s changing. Income patterns directly impact the quality of life of a community, and can also impact the value of homes and the quality of a community’s school system. Understanding those changes can improve how the schools can better meet the needs of the community.

 

Lakewood’s residents have experienced a notable transformation in the Total Federal Adjusted Gross Income (FAGI) over the last 10 years. According to the Ohio Department of Taxation, the average FAGI per income tax return increased to $58,060 in 2014 from $39,915 in 2004. That’s an average annual increase of 3.44%, well above the annual rate of inflation. During this same time, the district’s state FAGI ranking improved to 166th highest for 2014 from the 299th  in 2004 Considering there are 613 school districts in Ohio, Lakewood is now in the 27th percentile of the wealthiest communities in Ohio.

 

Several factors are supporting this transition. The first is the natural cycle of earnings that employed persons experience as they get older. Typically, people start to enjoy the fruits of their career efforts later in life. In many cases people see their highest earning years start around age 45 and increase steadily until retirement. Since we know Lakewood’s median age is now 45 years old, this would seem to be a likely explanation. 

 

Another factor, however, might play a part in the income shift, as well. According to the U.S. Census Bureau, Lakewood School District has experienced a 30.90% increase in residents with Bachelor (or higher) degrees since 2009. Experts commonly acknowledge that people with college degrees generally have a higher income than those without degrees. To this point, the U.S. Department of Education’s National Center for Education Statistics reported that in 2015, nationally, degree holders earned $48,500 a year, while high school diploma holders earned $23,900.

 

Why is Lakewood attracting this segment of the population? When identifying places to live, people choose to locate in affordable areas with good schools, attractive housing, safe and appealing neighborhoods, and with reasonable access to their higher paying jobs. As communities around central Ohio continue to change, it appears Lakewood is becoming an attractive alternative for people looking for these characteristics. 

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