Fargo or Bust: The State Income Numbers

Fargo or Bust: The State Income Numbers

Last Thursday, the Census Bureau released the American Community Survey (ACS) estimates of poverty and income. Based on a much larger survey sample than the older Current Population Survey (the CPS numbers were released at the beginning of last week), the ACS affords a closer look at state, regional, and local income patterns.  It is not a pretty picture.

A scroll through the annual income numbers (see map below), underscores a familiar pattern: those states with incomes below (and sometimes substantially below) the national median clustered in the Deep South and upper Midwest, those with higher incomes on the coasts and across the Sunbelt.  The Rustbelt states, especially after 2007, tumble into the lower-income tier with each dip in the business cycle.

But more remarkable than the relative position of the rich states and poor states are the measures of change across the last twelve years.  Between 2000 and 2012, real (inflation-adjusted) median income grew in only nine states.   Indeed, the only defense against stagnant or falling incomes across this span was the happy accident of a commodity or energy boom—which yielded modest income growth in states like West Virginia, Louisiana, Montana, Wyoming, Iowa, Nebraska, and the Dakotas.

Between 2007 and 2012 (across the last recession and recovery), median income grew in only two states: North and South Dakota. In the latter, the growth was barely half a percentage point.  Every other state saw median incomes fall, in thirty-four states by more than 5 percent, in eight states by more than 10 percent.

Even more troubling, the recovery phase of that business cycle (since 2009) has yielded real income gains in only five states: the Dakotas (again), West Virginia, Nebraska, and the District of Columbia.  By contrast, fifteen states saw median income fall more than five percent even as the national economy recovered.

Colin Gordon is a professor of history at the University of Iowa. He writes widely on the history of American public policy and is the author, most recently, of Growing Apart: A Political History of American Inequality, published by the Institute for Policy Studies at www.inequality.org