Magazine article State Legislatures

Recession Hits Far West and New England Hardest

Magazine article State Legislatures

Recession Hits Far West and New England Hardest

Article excerpt

Personal income statistics released by the Census Bureau in February further illustrate the recession's uneven impact on regions of the country. In what the Southwestern and Rocky Mountain states may consider poetic justice, the regions whose economies grew the fastest during the 1983-1990 economic expansion are now deeply mired in recession.

New England has been hit the hardest. After growing by an average annual rate of 8.2 percent between 1983 and 1990, personal income in New England grew just 0.7 percent in the 12 months ending Sept. 30, 1991. The Mideast states of Delaware, Pennsylvania, Maryland, New York and New Jersey and the District of Columbia were the next hardest hit: Personal income in the region grew at an annual rate of 2 percent in the third quarter of 1991, compared to 7.4 percent during the expansion.

On the other hand, the Rocky Mountain states are weathering the recession well. Personal income grew at an annual rate of 5.1 percent in the third quarter of 1991, only slightly lower than the 5.9 percent annual rate during the expansion. Southwestern and Plains states are also experiencing personal income growth well above the national average of 2.8 percent.

Personal income statistics provide a good barometer of economic performance, but because they include government transfer payments and unearned income they may provide too rosy a picture of state economic conditions. The growing elderly population receives Social Security payments that are indexed to inflation, which accounts for a significant portion of the increase in personal income figures. And although falling interest rates have soured fixed income investments, the stock market has performed well.

The bottom line: Personal income numbers overestimate the growth of taxable wages and salaries, which are critical to state revenues. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.