Plains states soar in national income growth

WASHINGTON (AP) — A good corn crop helped give six Plains states the best income growth in the nation last year.
By contrast, income growth in Hawaii and Alaska failed to even keep up with inflation, the Commerce Department said on Monday.
For the nation as a whole, per capita income grew 4.5 percent. That was down from 5.2 percent in 1995, but was more than double the 2.2 percent inflation rate as measured by the department’s personal consumption expenditures index.
“It was a good year on the farm. Because of the drought a year ago, prices for corn and wheat soared,” said economist Mark Zandi of Regional Financial Associates in West Chester, Pa.
As usual, the state with the highest per capita income was Connecticut, at $33,189, and the state with the lowest was Mississippi, at $17,471. That national average was $24,231. Residents of the District of Columbia, not counted as a state, actually were slightly ahead of Connecticut, at $34,932.
But the best income growth occurred mainly in the Plains: North Dakota, 11.2 percent; South Dakota, 10 percent; Iowa, 7.9 percent; Nebraska, 7.4 percent; Minnesota, 6.8 percent; and Kansas, 6.5 percent.
The four other states rounding out the top 10 were Utah, 5.4 percent; Oregon, 5.2 percent; and Delaware and Illinois, both 5.1 percent.
Income growth in the Plains states and Illinois is related to agriculture, Zandi said, while Utah and Oregon have been helped by migration of high-income Californians. Delaware incomes are growing because of the health of the credit-card industry.
Hawaii had the slowest growth, 1.7 percent, followed by Alaska at 2.1 percent. Rounding out the bottom 10 were Wyoming, 2.5 percent; Tennessee, Montana and Maryland, 3.3 percent; Maine and New Mexico, 3.4 percent; and Idaho and Michigan, 3.6 percent.
Zandi said Hawaii’s economy is hurting because the slump in Japan has reduced Japanese investment. Alaska, Wyoming, Montana, New Mexico and Idaho were hurt by slack demand for coal, copper and other mining products. Also, oil-drilling slowed on Alaska’s North Slope.
Weakness in Michigan and Tennessee reflect cutbacks early in 1996 in the auto industry. Maine suffered from weak paper and lumber prices, while Maryland has been hurt by federal cutbacks to contractors and consultants.