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Red states' income growing faster than blue states'

6:56 AM, Sep 27, 2012   |    comments
Sources: USA TODAY analysis; U.S. Bureau of Economic Analysis By Kevin Kepple and Maureen Linke, USA TODAY
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By Dennis Cauchon, USA TODAY

Income is growing much faster in Republican-leaning "red states" than in Democratic-tilting "blue states" or the pivotal swing states that will decide the 2012 presidential election, a USA TODAY analysis finds.

Personal income in 23 red states has risen 4.6% since the recession began in December 2007, after adjusting for inflation. Income is up just 0.5% in 15 blue states and Washington, D.C., during that time. In the dozen swing states identified by USA TODAY that could vote either way Nov. 6, income has inched ahead 1.4% in 4 ½ years.

The big drivers of red state income growth: energy and government benefit payments such as food stamps.

By contrast, Democratic blue states are more affluent but were hit harder by the downturn. Connecticut, dependent on the financial industry, suffered the largest income drop except swing-state Nevada. Yet Connecticut residents still make $10,000 a year more on average than people in fast-growing North Dakota.

When averaged nationally, the robust gains in red states and meager gains in blue states produced a national growth rate remarkably similar to that in the swing states.

View the map: Illinois is blue, Missouri is red

USA TODAY analyzed income data released this week by the Bureau of Economic Analysis to compare how red, blue and swing states have fared through June 30. The difference in income gains is partly because blue states are richer and more populated than red states - 42% of the nation's income vs. 30% in red states. Also, the economic recovery since the recession officially ended in June 2009 has been distributed unequally around the country.

North Dakota, a red state, tops the nation in income growth thanks to an oil boom. Other major energy states - Alaska, Louisiana, Oklahoma and Texas - are solidly Republican, polls show. Poor, southern red states depend heavily on government transfers for income and benefited from increases in Medicaid and other federal programs.

The 12 swing states are diverse, but combined, they are remarkably average. Annual income per person is closer to the U.S. average than that in red or blue states. Last year, income rose 1.5% in swing states and 1.6% in the USA. Since Obama took office, income growth is up 1.9% in swing states and 2.0% in the USA.

Michael Ettinger of the liberal Center for American Progress, says, "Polls show more people blame former president Bush for a recovery that hasn't been satisfying and Mitt Romney is very Bush-esque."

Jonathan Williams at the conservative American Legislative Exchange Council says income growth in red states shows that low taxes and business-friendly regulation produce economic growth.

Columbia University statistician Andrew Gelman, author of Red State, Blue State, Rich State, Poor State, says local conditions matter less than people think. "People vote based on what they think is good for the country, not what's good for themselves."

Key swing state findings:

•Declines. Four of the 10 slowest growing are swing states: New Hampshire, Michigan, Florida and Nevada. The Silver State's income plunge is in a class of its own, down 10.8% because of its real estate collapse.

•Gains. Eight of the top 10 states in income growth lean Republican.

•Working. Compensation has fallen 2.1% in swing states and 1.8% in blue states since December 2007. It's up 1.7% in red states. Keeping income afloat everywhere: a 25% increase in government payments nationwide.

USA TODAY

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