They say it takes money to make money. A lot of folks in the Seattle area know this to be true from firsthand experience.

According to a new report, a big chunk of income earned by King County residents doesn’t come directly from their labor — it comes from their assets. On a per capita basis, income generated from assets penciled out to the tune of $24,100 here in 2019. Among the 100 largest U.S. counties, that ranks as the eighth highest. King County’s asset income is more than double the national average, which was $11,400 per capita.

In my column, I’ve written many times about the fast-rising incomes in the Seattle area. I think, though, that we tend to think of the word “income” as synonymous with earnings. This new report is a reminder that income is actually much more than that — it includes nonlabor sources as well. And for the most affluent people, assets can generate a large amount of income.

Asset income comes from three sources: stock dividends, which are cash payments to shareholders; interest, which includes payouts from money deposited in a bank, invested in government bonds or loaned in some other way; and rental income from investment properties (excluding the income of people primarily engaged in the real estate business).

Among the 10 large counties with the highest per capita asset incomes, three are in the San Francisco Bay Area and three are in the New York City area. New York County (Manhattan) is in a league of its own among large counties, at $64,200 per capita. Remarkably, the large county with the second-lowest asset income — $4,800 per capita — is in the same city: the Bronx (each of New York City’s five boroughs are also U.S. counties).

The lowest asset income among the 100 largest U.S. counties is $3,200 per capita, in Hidalgo County, Texas.


According to the report, King County is one of the few places in the U.S. (along with Manhattan and San Francisco) where incomes both from earnings and assets are extremely high. Some places with very high earnings, like Washington, D.C., have lower asset incomes than you might expect. And other places with very high asset incomes, like Palm Beach County, Florida, do not have very high earnings.

The report comes from the Economic Innovation Group, a Washington, D.C.-based think tank whose mission is to help forge more dynamic, entrepreneurial and inclusive economy across the U.S. Researchers analyzed personal-income tables published by the Bureau of Economic Analysis, which are based on IRS data, for this report.

If you’re one of the many people in King County not earning much or any of your income from assets, that $24,100 per capita figure may seem bewildering. It was calculated by taking the total dollar amount of asset income earned in King County and dividing it by the total number of residents — about 2.25 million people. Since a lot of those 2.25 million folks don’t earn anywhere near $24,100 in asset income, it means that a bunch of other folks in King County earn much more than that from their assets.

The data used in the report is at the county level, so we can’t see the gaps in asset income that exist between cities and neighborhoods in King County. But we know those gaps exist, and when we look at the national data, it’s clear that there is a massive gulf between those Americans who earn nonlabor income each year and those who solely depend on their paycheck.

“The divide between those who get to supplement their labor-earned income with capital income and investment income, and those who don’t, is a real big dividing line today, and one that the pandemic put in even starker relief,” said Kenan Fikri, research director at the Economic Innovation Group. “We’ve seen the performance of assets divorced from the performance of the real economy for more than a decade, but especially since the onset of the pandemic.”

Asset income today makes up one-fifth of all income earned by Americans, up from 15% in 1969, according to the report. Income from assets has also grown significantly faster in the past decade than income from earnings.


The gap between those who have assets that generate income and those who do not has grown over the past few decades. About one quarter of all U.S. counties make less than half the national average for per capita asset income in 2019, up from 10% in 1990.

“The top 10% of counties are garnering a larger and larger share of the country’s wealth income,” Fikri said.

The report shows a clear urban-rural divide, with asset income largely concentrated in coastal hubs of technology and finance. There are also number of mining regions and recreational destinations for the ultrawealthy with tremendous amounts of asset wealth — Teton County, Wyoming, where the Jackson Hole ski resort is located, stands out. But people across the heartland report much lower amounts of asset income, and in Appalachia and the Deep South, asset income is negligible.

Everyone in Seattle knows that our local tech workers receive nice, healthy paychecks. These other sources of income may be less apparent.

“We know that these superstar cities are full of legions of highly paid workers,” Fikri said, “but to see that the position of these workers is bolstered by so much wealth income in addition is quite stark.”

An interesting finding in the data is that the areas of the country that are growing the fastest haven’t benefited from the growth in asset income.

“Boomtowns in the Sunbelt — Orlando, Phoenix, Las Vegas — some of these communities where growth isn’t necessarily driven by the knowledge economy like you see in the Pacific Northwest or California … many of them actually saw asset income decline over the past couple decades, even though they’re boomtowns,” Fikri said.

The report is meant to shine a light on how many communities have little ownership stake in the wealth created by the U.S. economy, and to motivate new policy ideas for building wealth for a greater number of Americans.