Friday, September 28, 2012

Red States' Income Growing Faster Than Blue States'

Some of the income gains were due to an increase in transfer payments in Republican states, but the key is that in a number of red states the rise in income is driven by energy-friendly economic development, and the differences between the Democrat states are dramatic.

At USA Today:
Income is growing much faster in Republican-leaning "red states" than in Democratic-tilting "blue states" or the pivotal swing states that will decide the 2012 presidential election, a USA TODAY analysis finds.

Personal income in 23 red states has risen 4.6% since the recession began in December 2007, after adjusting for inflation. Income is up just 0.5% in 15 blue states and Washington, D.C., during that time. In the dozen swing states identified by USA TODAY that could vote either way Nov. 6, income has inched ahead 1.4% in 4 ½ years. The big drivers of red state income growth: energy and government benefit payments such as food stamps.

By contrast, Democratic blue states are more affluent but were hit harder by the downturn. Connecticut, dependent on the financial industry, suffered the largest income drop except swing-state Nevada. Yet Connecticut residents still make $10,000 a year more on average than people in fast-growing North Dakota.

When averaged nationally, the robust gains in red states and meager gains in blue states produced a national growth rate remarkably similar to that in the swing states.

USA TODAY analyzed income data released this week by the Bureau of Economic Analysis to compare how red, blue and swing states have fared through June 30. The difference in income gains is partly because blue states are richer and more populated than red states — 42% of the nation's income vs. 30% in red states. Also, the economic recovery since the recession officially ended in June 2009 has been distributed unequally around the country.

North Dakota, a red state, tops the nation in income growth thanks to an oil boom. Other major energy states — Alaska, Louisiana, Oklahoma and Texas — are solidly Republican, polls show. Poor, southern red states depend heavily on government transfers for income and benefited from increases in Medicaid and other federal programs.
There's more at the link, including a very cool graphic.