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Income growth slower in Plains states, statistics show
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SIOUX FALLS, S.D. -- Personal income in the Plains states grew at a slower pace than the national rate, and lower farm income was a contributing factor, a federal economist said Tuesday.
While total personal income grew 6.3 percent in the U.S. from 2005 to 2006, it increased by 5.3 percent in the region including South Dakota, North Dakota, Nebraska, Minnesota, Iowa, Kansas and Missouri, according to preliminary estimates from the U.S. Bureau of Economic Analysis in Washington.
The income figures include both pay and other factors such as dividends, interest, rent and transfers. Those other factors are on par with the national economy, so the real difference is what's happening in the labor market, said David Lenze, a bureau economist.
"The one thing that stands out is the farm sector, and that sector was subtracting from growth last year," he said. "It knocked off about a half percentage point from earnings growth in the Plains region."
The farm sector also subtracted from growth in 2005, but at a lower pace 0.39 percentage points, he added.
Income growth in Minnesota was 3.8 percent, or 46th in the nation and less than the 4.3 percent in neighboring Wisconsin. Per-capita income in Minnesota is now $38,712, ranking Minnesota at No. 12 in the nation, down two from 2005.
"For us to be 46th in the nation in terms of something as important a measure as per-capita income growth doesn't bode well," Steve Hine, Minnesota director of labor market research, told the St. Paul Pioneer Press. "Ever since the recession hit, we have not been persistently outperforming the nation as we often had in the previous decades."
South Dakota's personal income growth last year was 5 percent, which was 38th among the nation's 50 states.
The Southwest region saw the fastest growth for the third consecutive year, 8.3 percent, thanks to a boom in the mining sector. The Great Lakes region saw the slowest growth, 4.8 percent, due to job cuts in the auto industry.
South Dakota lost more than 1.5 percentage points to farm income, but growth in finance and insurance, construction and nondurable goods manufacturing surpassed national averages. The state's farm sector gave up 1 percentage point the previous year, Lenze said.
In the category of per capita income, the nation grew 5.2 percent to $36,276 in 2006. Connecticut led all states with a per capita income of $49,852, 37 percent above the national average. Mississippi workers earned the least on average, $26,535.
The bureau's estimates are preliminary and will be revised later in the year.
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