Short answer
Businesses run on spending, not head count. What matters is how many dollars people have, what share they spend in town, and how much visitors add. A town with fewer residents but more income, or many visitors, can support more than its size suggests. Retirees’ and investors’ income can carry a small economy, but a town also needs working households to staff its businesses and fill its school.
Last reviewed November 3, 2026 by McKenzie Community Partnership. Applies to small towns, especially in tourist and retirement areas. Part of the Small-Town Economics series.
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Why does income matter as much as population?
Households with more income spend more in every category. In 2024 the lowest-income fifth of U.S. households spent about $35,000 a year, and the highest fifth about $150,000. A town of 400 well-off retired households can outspend a town of 600 struggling ones.
The U.S. averages in Guide 1 come from households averaging about $104,000 a year before taxes. If your area’s income is lower, scale the spending down. The Bureau of Labor Statistics publishes spending by income group, so you can pick the row that matches your town.
What is “leakage” and why does it matter?
Leakage is money residents spend outside town: the Costco run, the online order, the dinner in the city. A small town will always leak some spending. The goal is to keep the everyday purchases (gas, groceries, coffee, a meal out) local.
Businesses and chains measure leakage before they move in. When Bi-Mart opened in Caldwell, Idaho, a consultant had estimated that residents spent $150 million a year outside town. A local store doesn’t need that scale, but the same idea applies: count what already leaves.
How do I count visitors?
Visitors are part-time residents who spend more than locals on meals and lodging. A simple way to count them:
- Estimate overnight visitor-nights per year (lodging and short-term rental counts, campground use, or lodging-tax revenue).
- Divide by 365. The result is the number of year-round residents those visitors equal. For example, 36,500 visitor-nights equals about 100 full-time residents.
- Note the season. If most visits fall from May to October, a business has to survive the winter on locals.
In Lane County, Oregon, visitors spent about $1.4 billion in 2024. About 29% went to restaurants and about 10% to grocery and food stores. Every $114,000 of visitor spending supported about one job.
What about retirees and second-home owners?
In the rural West, money from investments, retirement and Social Security (called non-labor income) is a big part of the economy. In 2016 it made up about 48% of all personal income in rural western counties.
This income doesn’t depend on local jobs, which steadies the economy. Its risk: when well-off newcomers bid up housing, people who work locally can’t afford to live there. Second homes and short-term rentals add spending in season but leave fewer year-round neighbors.
What income mix does a town need?
No single number exists, but a healthy small town usually has three groups:
- Working households who staff the store, the café and the fire district, and whose children keep the school open.
- Retirees and remote workers whose outside income supports local spending (see Guide 5).
- Visitors who add seasonal demand, especially for restaurants and lodging.
If one group is missing, check what breaks. With no working households, businesses can’t hire. With no visitors or outside income, there may not be enough spending.
On the McKenzie River
- ZIP code 97413 (Blue River and McKenzie Bridge) had a median household income of about $63,500 in the 2023 Census estimates, below the U.S. average.
- Blue River has many seasonal homes and short-term rentals, which support restaurants and recreation businesses at a level its population alone couldn’t.
- MCP is requesting McKenzie River lodging-tax figures from Travel Lane County and will add them here.
Outside Oregon
Your state tourism office usually publishes county visitor-spending reports. The Census American Community Survey gives household income by ZIP code. Headwaters Economics’ free Economic Profile System shows non-labor income for any U.S. county.
Frequently asked questions
Is tourism enough to support a year-round town?
Rarely on its own. Tourism is seasonal, and its jobs often pay less, so a town also needs year-round residents and outside income.
Do short-term rentals help or hurt local businesses?
Both. Their guests spend money in town, but each home rented to visitors is a home not lived in year-round by a worker or a family.
Where do I find my town’s income figures?
Use the Census Bureau’s data.census.gov and search your ZIP code for table DP03 (income and employment).
The Small-Town Economics series
- How many people does it take to support a grocery store or restaurant?
- What income and spending does a small town need? (this guide)
- Where do jobs come from in a small rural town?
- Workforce housing vs. low-income housing: what’s the difference?
- What brings remote workers to a rural town?
Sources
- U.S. Bureau of Labor Statistics: Consumer Expenditures, 2024
- Idaho Business Review: Bi-Mart in Caldwell
- Oregon Employment Department: Lane County travel spending increased in 2024
- Dean Runyan Associates: Lane County travel impacts, 2024
- Headwaters Economics: Non-Labor Income in the Rural West
- Population Review: ZIP 97413 (Census ACS 2023)
- KLCC: Blue River rebuilds (2025)
This guide is general information, not financial, legal or planning advice. McKenzie Community Partnership doesn’t sell anything; we explain your options. Free to copy and adapt; please credit McKenzie Community Partnership.