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Useful Stats: Real personal income by state, 2012-2016

June 28, 2018
By: Jonathan Dworin & Jason Rittenberg

Real personal income — a measure of purchasing power that connects income to costs — has grown within states at an average rate of 1.5 percent per person since 2012, according to data from the Bureau of Economic Analysis. The average American’s experienced income growth, however, appears to vary wildly depending on location. A person’s state could mean experiencing as little as a 0.0 percent or as much as a 2.8 percent annual increase, while living in a metro area could mean losing 1.0 percent in annual income growth or gaining 3.4 percent relative to in-state peers living in non-metro areas. In terms of 2016 dollars, living in an average state’s metro area means an additional $4,169 in real person income.

 

The above figure displays these average year-over-year growth rates in real per capita income from 2012-2016. (The picklist at the top left controls the data displayed for the states, while options on the top right controls the data displayed for the top 100 metros.)

Metro versus non-metro real income

The differences in annual real income growth for metro and non-metro areas speaks to concerns about opportunities that have received significant attention in tech-based economic development circles, and American society more broadly, in recent years. 

Non-metro areas are doing comparatively well in many parts of the country. In 19 states, 2016 real personal income is actually higher in non-metro areas, and in 15 states, annual growth is higher in these regions. For Alaska, Massachusetts, Maryland and Nevada, both real incomes and growth are better in rural areas.

Region Type 5-Yr. Avg. Growth 5-Yr. Avg. Growth Range 2016 RPI
Statewide 1.5% 0.0% - 2.8% $44,654
Metro areas 1.7% 0.2% - 2.9% $45,591
Non-metro areas 1.2% -1.7% - 3.2% $41,100
Metro/Non-metro 0.5% -1.0% - 3.4% $4,169

A few states stand out in their discrepant growth for metro and non-metro areas. South Dakota has experienced net average real income growth of approximately 0.0 percent, but this is due to a growth rate of 1.6 percent in metro areas and -1.7 percent in non-metro areas. Illinois has the highest metro growth rates (2.9 percent), but non-metro purchasing power in the state has experienced just 0.2 percent average annual growth. Arkansas is seeing relatively strong non-metro increases in real incomes (1.4 percent), but these are being outclassed by robust metro growth rates (2.6 percent) in a state that has one of the largest differences in real income at nearly $9,800 per person in 2016. 

Several states stand out in their balance between metro and non-metro areas. California and Colorado are both experiencing higher rates of real income growth in non-metro areas (0.2 percent and 1.0 percent higher, respectively) and have below average differences in 2016 purchasing power. Nevada is achieving parity in regional growth, with a 2.1 percent statewide average, and 2016 real income that favors non-metro regions.

Variance among cities

The map also displays varying growth rates for the 100 largest metropolitan statistical areas, which varied greatly from each other. People living in Provo, Utah, since 2012 have experienced an average growth in purchasing power of 4.5 percent, while Lakeland, Florida, has experienced growth of 0.2 percent. Among larger cities, Washington, D.C. (0.2 percent), Houston (0.5 percent) and Miami (1.4 percent) are all experiencing below average growth in incomes relative to costs. Meanwhile, San Jose (3.8 percent), San Francisco (3.5 percent), Chicago (3.3 percent) and Seattle (3.0 percent) are all seeing robust income growth — despite frequent concerns about costs in many of those cities.

 

useful stats