Income Trends

The U.S. Department of Commerce’s Bureau of Economic Analysis recently released the state personal income levels for 2012. Based on this data, average state personal income growth slowed to 3.5 percent in 2012 from 5.2 percent in 2011. While North Dakota demonstrated the largest increase in state personal income growth (12.4 percent) among all the states, South Dakota’s -0.2 percent was the most anemic. In terms of inflation, as measured by the national price index for personal consumption expenditures, the rate fell to 1.8 percent in 2012 from 2.4 percent in 2011.

Legislators in several states are considering raising the minimum wage this year, but the issue is controversial. Proponents of raising state minimum wages argue that while the federal rate has remained stagnant—it hasn’t increased since 2009—the costs for housing, food, utilities and health care have continued to climb. This leaves those earning minimum wage with less money to afford the basics, which in turn puts downward pressure on the demand for goods and services. Opponents warn that raising the wage now would have a negative impact on businesses—especially during anemic economic times—and that a minimum wage hike actually hurts those that it intends to help by forcing employers to cut jobs at the low end of the pay scale.

The Great Recession has had a far-reaching and prolonged impact on poverty rates and income across the country with some places – like Greenwood County, South Carolina – seeing their poverty rates double and median household income drop by nearly $12,000, according to the New York Times. From 2007 to 2010, poverty rates increased in every state except five. The same is true for median household income – all states but five experienced decreases.  In 2010, poverty rates ranged from a low of 6.6 percent in New Hampshire to a high of 22.7 percent in Mississippi.  Check out The State of Poverty 2010 to learn more. 

Per capita personal income often is used to evaluate the economic well-being of a state’s residents. Nationally in 2010, inflation-adjusted per capita personal income grew by $780 after dropping more than $1,000 in 2009 and falling $541 in 2008. 

The number of poor children has been on the rise for the past 10 years, although those increases vary across state and racial and ethnic lines.  Higher childhood poverty rates mean bigger costs to states, including future health and criminal justice expenses.  

Chapter 10 of the 2011 Book of the States contains the following articles and tables:

The Great Recession hit rural areas hard as median incomes fell, poverty rates increased and the metropolitan-nonmetropolitan wage gap continued to grow.  In addition, nonmetro areas continue to lose young adults through out-migration, and rural populations are increasingly relying more heavily on transfer payments due to rising medical costs and an aging population.

Approximately 40 million Americans received monthly food stamp benefits in 2010, up from about 26 million in 2007. Increased unemployment during the recession was a major contributing factor to the growth in the number of Americans depending upon SNAP. 
 

The national recession didn’t strike every part of the United States with equal force, and it appears the Great Lakes region got the worst of the severe economic blow.

Long-term unemployment and a depressed economy drove the number of Americans living in poverty up in a majority of states in 2009.  Poverty levels continue to vary significantly across regions, states and age groups.

 

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