All of us too often see what we want to see, or make assumptions on a community based on what is closest to our eyes as we drive down a shortcut to our destinations. But the shack along the road may mask the mansion down the lane.
What we need to see – and a useful measuring stick for elected officials – is how a community fares in its creation of per capita personal income.*
Let’s start with Louisiana.
By some measures, Louisiana one of the “Poorest States”
Louisiana often is called one of America’s “poorest states” based on its ranking of 3rd highest level of poverty in the U.S. (20.4% of the state’s population, 2011 Census Bureau American Community Survey, with Mississippi #1 at 22.6%).
This picture would appear to be matched by Louisiana’s position as having America’s 7th lowest median household income of $41,734 v. #1 Maryland’s highest median household income of $70,004.
This explains, on the surface, why some in the Pelican State bemoan the lack of high end retail and other day to day amenities seen in such “wealthy” states as Connecticut, Massachusetts, and New York. But looks can be deceiving.
Louisiana has made Leaps in Personal Income
An underreported figure is the growth of Louisiana’s per capita personal income. As recently as 2000, Louisiana ranked 45th among the states by personal income. By 2010 and 2011 (federal Bureau of Economic Analysis, March, 2012) Louisiana ranked 28th.
In the 12 states of the Southeastern U.S., Louisiana’s per-person personal income of $38,578 in 2011 ranked third, behind only Virginia’s $45,920 and Florida’s $39,563. (Associated Press, March 28, 2012, from federal Bureau of Economic Analysis.)
Louisiana’s growth in personal income recently has been fueled by earnings jumps in oil and gas employment, manufacturing, health care and social assistance, plus growth in professional-science-technical services.
Why such different pictures?
Income Inequality Makes the Difference in the Picture
The answer is income inequality, with obvious implications – both good and bad – for communities around the state. As well as the evolving definition of “community” itself.
While personal income as a whole in Louisiana has taken great leaps over the past decade, for those in the bottom 5th income has stagnated, or possibly even worsened. On the other hand, for the wealthiest, income has increased, mirroring a national trend. (Or, putting it in a less class-conscious way, the comparison is between the less successful and more successful.)
This accounts for Louisiana’s current ranking as having the nation’s 6th highest level of income inequality, looking at the gap between the top earners and bottom earners. (New Orleans “Times-Picayune,” November 15, 2012, highlighting a report from the Center on Budget and Policy Priorities and the Economic Policy Institute in Washington, D.C.)
In Louisiana, the wealthiest 5 percent of households have an average income more than 14 times the size of the bottom 20 percent, not a large difference between the national gap between these two groups of 13 times, but more than the “most equal state,” Iowa, where the highest earners make 5.6 times as much as those at the bottom.
Whose “Community” is doing Well, and Not So Well?
What defines “community” now? In the future?
Among Louisiana’s most successful, times have been dramatically improving over the past decade. Among those who have been struggling, the struggle hasn’t gotten much easier. Perhaps explaining why Louisiana was ranked #10 in federal aid to state and local governments per capita in 2009, not counting military spending (U. S. Census Bureau, August, 2010.)
So, before forming an opinion about how “rich” or “poor” any particular community might be on first glance when driving through, here are figures for some Louisiana metro areas.
Among Top 100 U.S. metropolitan areas, ranked by per capita personal income, 2010**:
New Orleans $42,485 #46 out of 372 metro areas.
(New Orleans has the nation’s fastest per capita income growth since 2005.)
Lafayette $41,129 #64
(Compare: Houston, $44,001, #36, Dallas, $41,282, #62. #1 is Bridgeport, Connecticut, $71,768, with San Francisco #2, Washington, D.C. #3, Pittsburgh #44, Durham – Chapel Hill #72.)
Among the Top 200 U.S. metro areas, ranked by per capita personal income:
Baton Rouge $37,254 #135
Shreveport- $36,871 #144
Alexandria $36,007 #166
Lake Charles $34,708 #199
(Compare: Birmingham #103, Huntsville #105, Little Rock #108, Memphis #127, Killeen – Ft. Hood, Texas #131, Tampa #140, Louisville #141, Jackson, Mississippi #157, Phoenix #163, Gulfport-Biloxi #186.)
Among the Top 300 U.S. metro areas, ranked by per capita personal income:
Monroe $33,942 #220
(Compare: Greenville, S.C. #221)
The Lesson – Don’t Judge an area’s River of Income by the view from only one Side of the Stream
Before judging which communities are “rich” or “poor,” consider whether one’s view takes in only those at one end of the success ladder or the other. Or whether one has seen, or even can see, the entire breadth of the river of personal income flowing through a metropolitan area.
Of course, if the absolute number of “mansions” is too low, don’t look for any Tiffany stores. But do look at what’s behind the façade of “shacks” – you might be surprised by the possible Tiffany purchases resting inside the whole community.
* “Personal income is the income received by all persons from all sources. Personal income is the sum of net earnings by place of residence, property income, and personal current transfer receipts.” (U.S. Department of Commerce, Bureau of Economic Analysis.)
** Source: Compiled by New Jersey Dept. of Labor and Workforce Development, Gov. Chris Christie
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