Wednesday, April 17, 2024

Louisiana among worst states for personal income growth since the pandemic

by BIZ Magazine

By Tim Henderson, Stateline

A new analysis of data dating back to before the COVID-19 pandemic shows Louisiana ranked among the worst states for personal income growth.

Residents of some Midwestern and Mountain states gained the most income per capita during the past four years, a Stateline analysis shows, as competition for workers drove up wages in relatively affordable places to live.

With the COVID-19 pandemic now in the nation’s rearview mirror, Stateline’s analysis offers a more complete understanding of how some states’ residents benefitted economically — and others didn’t — as policy decisions and Americans’ choices shuffled state-by-state outcomes.

The oil and gas industry boosted the per capita incomes for residents of North and South Dakota. Mountain states such as Utah saw high earners moving in from California, Oregon and Texas.

States where inflation-adjusted income declined included Alaska, where oil drilling has been in long-term decline, as well as Georgia and Maryland.

Inflation took the biggest bite out of paychecks in the West and South, with consumer prices rising about 20% in those regions between mid-2019 and mid-2023, according to U.S. Bureau of Economic Analysis figures compiled for Stateline by the Urban-Brookings Tax Policy Center in Washington, D.C. Inflation was a little lower in the Midwest, about 19%, and about 16% in the Northeast.

Stateline’s analysis calculated gains in per capita personal incomes after regional inflation between the second quarter of 2019, before the pandemic, and the second quarter of 2023, the latest available from the Bureau of Economic Analysis. Per capita personal income, which includes all kinds of income from wages to business income and pandemic support payments, often is used as a barometer of economic health for states.

As of mid-2023, the average personal income for Louisiana residents was $57,204, ranking 44th out of 50 states and Washington, D.C. Average income increased 1.7% from 2019, making Louisiana one of six states with less than 2% growth over the period. South Carolina (1.2%), Connecticut (1.1%), Delaware (0.7%), Maryland (-0.1%) and Georgia (-0.3%) were the other states on the lower end of income growth.

Many of the states in the Mountain West, Midwest and New England that experienced large income increases have scenic or affordable areas that have attracted remote workers looking for a lower cost of living and proximity to recreation.

Incomes didn’t grow as much in most of the Northeast, partly because low-wage service workers have fared better than the high earners who predominate in the region, said Lucy Dadayan, principal research associate at the Urban-Brookings Tax Policy Center. Some of the highest-income areas in the country, including Connecticut and the District of Columbia, were in the bottom 10 for income growth. New Jersey and New York weren’t far ahead.

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