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State income ranked 48th, rate of growth well below national average Wednesday, Mar 29, 2006 By Wesley Brown Arkansas News Bureau LITTLE ROCK - Per capita personal income in Arkansas grew by a modest 4.1 percent to $26,874 in fiscal 2005, five-tenths of a percentage point below the national rate and 48th among the states, federal Commerce Department statistics released Tuesday showed. Arkansas' per capita income ranked just ahead of hurricane-wracked Louisiana and Mississippi. "You want to grow at a faster percentage to gain on the national average," Katherine Deck of the University of Arkansas in Fayetteville said. "We like to see progress, and that's not progress." Deck, associate director of the university's Center for Business and Economic Research at the Sam M. Walton College of Business, said that of particular concern was that Arkansas' per capita income growth fell below the national rate for 2005 after hitting 6.1 percent the year before, well above the 5 percent national rate. Overall, U.S. per capita personal income averaged $34,586 in 2005. Connecticut led the nation with a per capita income of $47,819, while Louisiana's per capita income of $24,820 put it last among the states and 28 percent below the national average. The decline in Louisiana was a "consequence of Hurricanes Katrina and Rita," said David Lenze, a spokesman for federal Bureau of Economic Analysis, a division of the Commerce Department. Last year, Louisiana ranked 42th and had per capita personal income of $27,297. The loss in personal income for the Gulf Coast state was reduced by $26.8 billion to reflect uninsured losses by homeowners, Commerce Department statistics show. The 10 states with the lowest per capita income in 2005, with the exception of Alabama, all were ranked in the bottom 10 the year before. The 10 states with the highest per capita income in 2005 were all ranked in the top 10 the year before, although some of the states traded places. For Arkansas, the low ranking continued a trend that has kept the state near the bottom in personal income growth for more than two decades. Between 1984 and 1989, Arkansas was 48th, ahead of West Virginia and Mississippi. In 1990 and 1991, Arkansas fell to 49th, ahead of only Mississippi. Arkansas improved to 46th in 1992 but fell to 48th in 1993 and remained there for five years. Arkansas was 47th in per capita income for 1999 and 2000, besting New Mexico, West Virginia and Mississippi, but ranked 49th for 2001 and was 49th in 2002 and 2003, ahead of only Mississippi. "Arkansas has just been behind for so long that we need more than steady growth," Deck said. "We need extraordinary growth rates in order to just be average." Ashvin Vibhakar, director of the University of Arkansas at Little Rock's Institute for Economic Advancement, said the slow growth in personal income is linked to the lack of educational progress. "Until we do close the educational gap, we will continue to see this problem," the UALR economist said. Deck said while the 2005 figures don't break down regions of the state, such as fast-growing northwest Arkansas, the numbers still tell a story of the state population's overall financial health. "What this tells us is even the strides being made in areas of active growth is not enough to counteract some of the downward pressures in the rest of the state," she said, citing the continued loss of manufacturing jobs and workers in the eastern Arkansas Delta. The BEA compiles per capita income information for each state by dividing a state's total personal income by the current resident population from the latest Census Bureau statistics. Overall, total personal income for Arkansas in 2005 amounted to $74.6 billion, up 5.2 percent from $70.9 billion in the previous year. Census data from July 1, 2005, shows the state's current population at nearly 2.8 million. ----- Lana Flowers of The Morning News contributed to this article. |
