State personal income has grown more in the past six quarters in “red” states and states run by Republican governors than in “blue” states, a Blaze analysis finds.
Here are the top ten states where income has grown the most since Q1 2011:
“Red” and “Blue” state as defined by electoral-vote.com. All Graphics by TheBlaze.
However, this isn’t to say recent news on personal income growth is good. On the contrary, growth has slowed in the last quarter, according to a recent report from the Bureau of Economic Analysis*:
State personal income growth slowed to 1.0 percent in the second quarter of 2012, from 1.7 percent in the first quarter… Growth slowed in 39 states plus the District of Columbia, accelerated in 10, and was unchanged in Nevada.
Personal income growth ranged from 2.1 percent in North Dakota to 0.4 percent in New Mexico. Inflation, as measured by the national price index for personal consumption expenditures, slowed to 0.2 percent in the second quarter from 0.6 percent in the first quarter.
Here are the top ten states where income has grown the least since Q1 2011:
Let’s take a step back and define “personal income” before we go any further.
“Personal income is the income received by all persons from all sources. Personal income is the sum of net earnings by place of residence, property income, and personal current transfer receipts,” the report explains.
It’s important to note the BEA data includes all forms of personal income, otherwise reports that correctly show U.S. household median annual incomes have fallen from $53,508 to $50,964 since June 2009 wouldn’t make any sense.
“The estimate of personal income in the United States is derived as the sum of the state estimates and the estimate for the District of Columbia,” the report adds, “it differs from the estimate of personal income in the national income and product accounts (NIPAs) because of differences in coverage, in the methodologies used to prepare the estimates, and in the timing of the availability of source data.”
Also, keep in mind all personal income data is measured before deductions for personal income taxes and other personal taxes.
So with a better understanding of the BEA’s findings on personal income, perhaps we can ask: Why the growth in certain states?
Many of the states that have seen growth in income have energy to thank. North Dakota tops the list because of its oil boom. Likewise, Alaska, Texas, and Oklahoma all have, when compared to other states, healthy economies boosted by the energy industry. And as for the non-energy states that have seen income growth: They have fiscal restraint, business friendly environments, multi-billion dollar companies, and/or sound tax policies to thank.
But what about the top ten states with the least amount of growth? What’s their excuse?
Some analysts blame weak income growth on overpopulation (as in the case of New York [except Texas is more heavily populated]), while others rightly blame the lasting effects of the housing crash (Nevada), but almost all of them should blame the lack of growth on unfriendly business environments (Louisiana, Connecticut, and Nevada [again]).
Final Thought: Considering that, by CNN’s estimation, two of the ten states that have had poor income growth are “swing states,” how do you think their economic woes will impact the election?
Do you think the people of, say, Nevada, a state with a 12.1 unemployment rate, are ready for someone different in the White House? Or do you think they’re willing to give President Obama another shot?
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[*From the report: "Quarter-to-quarter percent changes (growth rates) are calculated from unrounded data and are not annualized (i.e. to reflect the whole year). Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise specified. Quarter-to-quarter dollar changes are differences between published estimates."]
Front page photo source courtesy the AP. A earlier version of this story incorrectly included Colorado and New Hampshire on the map of states with the least growth. We have since corrected this.