States post uneven gains in income

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The Wall Street Journal
By: Neil Shah
March 28, 2012

States post uneven gains in income

Many Americans saw their incomes rise faster in 2011 than the year before, but a lot depended on which state you lived in.

The Commerce Department's latest tally of personal income by state, meaning all types of income for residents in a particular state, jumped 5.1% on average in 2011, compared with a 3.7% rise in 2010. While that shows income growth is showing improvement as the U.S. recovers from its worst recession in decades, not all states are enjoying the renaissance equally.

Total personal income rose just 3.4% in Maine, below the 5.1% average across states, while North Dakotans' income leaped 8.1%-thanks in large part to the state's oil boom and unusually strong labor market. (North Dakota has the lowest unemployment rate in the country.) Indeed, wages and salaries related to the mining sector soared a whopping 9% in the fourth quarter of last year, faster than any other industry--fueling income growth not just in North Dakota but also Wyoming, Oklahoma, Texas, Louisiana and West Virginia.

Several states remain laggards. Forty-five states have now seen their overall earnings (wages and salaries, less government help) return to prerecession levels, but five others are dragging behind: Arizona, Florida, Michigan, Nevada and Oklahoma.

States like Arizona, Florida and Nevada were hard hit by the bursting of the U.S.'s housing bubble, which is likely acting as drag on these states' economic activity and income levels. And while there are signs of a potential bottom in the housing market on the horizon, few expect a return to the kind of boom-era construction activity that fueled incomes in these states for so long.

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This page contains a single entry by CFED published on March 29, 2012 4:15 PM.

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