Income stagnation: Stagnation by way of the Midwest

Posted: October 26, 2012 in economy
Tags: , ,

THE New York Times’ David Leonhardt wrote a nice piece a few days ago on the puzzling problem of stagnant median incomes in America. The real income of the median household peaked in 1999 at $54,932 and has since fallen back to a level first attained in about 1996—over a decade and a half without a real income gain.I thought it would be interesting to take a look at some of the geographic disparities in real income growth over that time period. At right you can see a look at the top and bottom ten states for real median household income growth for 1999-2007 and 1999-2011 (to illustrate the impact of the crisis). A few things stand out. Places that enjoyed strong real income growth over the past decade tend to either be large, sparsely populated plains states or states with a thriving energy industry (or both). Greater Boston seems to show up here quite strongly, and government appears to have buoyed Washington and Virginia. A bad real income performance seems to be strongly related to share of manufacturing in the economy. When one looks at the data as a whole, the more populous states that don’t show up here, like California, Florida, and Pennsylvania, experienced real income gains during the earlier period that were wiped out by the downturn; secular stagnation no doubt pays a role there, but the crisis clearly explains a large share of the poor income …

via Economic Crisis http://www.economist.com/blogs/freeexchange/2012/10/income-stagnation?fsrc=rss

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